Lululemon Jumps on Strong Guidance

[Stocks-to-Watch]

Lululemon (LULU) stock clearly doesn’t trade like other retailers. A hint of a slowdown in its tremendous growth sends shares tumbling. And an increase to earnings expectations can lift the stock enormously. That’s what’s happening today, after lululemon said it now sees fourth quarter EPS of 47 to 49 cents, up from its previous guidance range of 40 to 42 cents.

Lululemon has struggled somewhat to find the right level of inventory — for much of 2011, investors were concerned that inventory was too low. But now, the company is confident in its inventory levels.

“Our work throughout the year building our inventory position is driving our success in the fourth quarter. Guests have responded exceptionally well to the robust assortment and bright color palette for holiday, and momentum continues with the new spring product offerings,” said CEO Christine Day in a statement.



Original Article Source by Barrons.com