Oppenheimer Met With Lululemon Management; Here's What Happened

In a report published Wednesday, Oppenheimer analysts maintained an Outperform rating for Lululemon Athletica Inc LULU, with a price target of $70, after a meeting with the company's CFO Stuart Haselden and IR Jodi Regts. In the report Oppenheimer noted, "Historically as a growth retailer, LULU's focus internally top-line driven; more rigorous inventory management/focus on processes is new under Haselden. One strength of J Crew (Haselden spent 8 years) strong expense management, in procurement especially—new opportunity for LULU." Lululemon Athletica now has a new team and is poised to start reaping the results of its investments in infrastructure and processes in 2H15. Moreover, the company has big category opportunity (product extensions in women's, men's, ivivva). With these positives in place, the company is expected to consistently post high teens revenue growth "for years to come" as well as "$3.5-4B in sales opportunity (from $1.8B in sales currently); $3.50-4.00 in earnings power," the analyst said, while adding, "LULU remains one of our top ideas in '15 - we think important Easter weekend was strong as company was able to allocate spring product on time despite port delays." Barring port delays, the analysts expect the company to be able to meet the 2Q15 consensus of $0.34.