Lululemon Athletica Inc. (NASDAQ:LULU) is hitting the brakes on its latest innovation, the Breezethrough collection.
JPMorgan analyst Matthew R. Boss has slashed his 2024 earnings estimates and removed the stock from his Analyst Focus List. The company's stock, currently priced at $272.06, faces a revised price target of $338.00 for December 2025, down from a previous $457.00.
Lululemon has pulled its Breezethrough collection from both online and in-store sales just weeks after its launch. The Breezethrough collection, aimed at hot, low-impact workouts, faced criticism over its design, with a 3.1-star rating from 112 reviews highlighting issues like unflattering seams and discomfort.
Lululemon's Innovation 'Pause' Raises Concerns
Lululemon's Breezethrough collection, launched on July 9, is experiencing significant pushback.
According to Boss's fieldwork, "LULU has now paused sales on the recently launched Breezethrough collection" after receiving "guest feedback" that highlighted design flaws.
The collection, intended for hot, low-impact workouts, has been criticized for its "V" shaped back seam and "U" shaped front seam, which customers found unflattering.
'Execution Concerns'
The Breezethrough line was expected to drive growth in Lululemon's women's leggings category through the second half of 2024.
However, the pause in sales "compounds recent in-stock/color palette 'execution' concerns," Boss notes.
The innovation was a key driver behind the company's revenue growth expectations for the latter part of the year. As a result, JPMorgan has lowered its 2H24 revenue growth estimate to 8%, below the street's forecast of 13%.
Op Margins Expected To Drop
The halted innovation has led to a revision in earnings projections. Boss now models a decrease in 2H24 U.S. revenue growth to flat year-over-year, with international growth expected to moderate. This adjustment contributes to a lowered full-year EPS forecast of $13.90, versus the street's $14.34.
The firm's operating margins are anticipated to drop to 22.8%, reflecting a fixed cost deleverage.
While Lululemon's stock has seen strong performance, current challenges with product innovation and execution issues are weighing on its growth prospects. Investors should brace for volatility as the company adjusts its strategies.
Lululemon Athletica Inc.(纳斯达克股票代码:LULU)正在停止其最新创新 Breezethrough 系列。
摩根大通分析师马修·博斯下调了2024年的收益预期,并将该股从分析师焦点名单中删除。该公司的股票目前定价为272.06美元,其修订后的目标股价为2025年12月的338.00美元,低于之前的457.00美元。
Lululemon在推出仅几周后就将其Breezethrough系列从线上和店内销售中撤出。Breezethrough 系列针对高温、低冲击力的锻炼,因其设计而受到批评,112条评论的3.1星评分强调了接缝不讨人喜欢和不舒服等问题。
Lululemon 的创新 “暂停” 引起了人们的担忧
Lululemon于7月9日推出的Breezethrough系列遭到了重大阻力。
根据Boss的实地考察,“露露在收到强调设计缺陷的 “客人反馈” 后,“露露现已暂停了最近推出的Breezethrough系列的销售”。
该系列专为高温、低冲击力的锻炼而设计,因其 “V” 形背缝和 “U” 形前缝而备受批评,顾客认为这不讨人喜欢。
'处决问题'
预计到2024年下半年,Breezethrough系列将推动Lululemon女士紧身裤类别的增长。
但是,Boss指出,销售的暂停 “加剧了最近的库存/调色板'执行'问题”。
这项创新是该公司今年下半年收入增长预期的关键驱动力。结果,摩根大通将其24年下半年的收入增长预期下调至8%,低于华尔街预测的13%。
预计营业利润率将下降
停止的创新导致了收益预测的修订。Boss现在预测24年下半年美国收入同比增长将下降至持平,国际增长预计将放缓。这一调整导致全年每股收益预期下调至13.90美元,而华尔街的预期为14.34美元。
该公司的营业利润率预计将降至22.8%,这反映了固定成本的去杠杆化。
尽管Lululemon的股票表现强劲,但当前产品创新和执行问题方面的挑战正在压制其增长前景。在公司调整策略时,投资者应为波动做好准备。