Hot Retail stock to watch: Lululemon Athletica inc.(NASDAQ: LULU)

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Lululemon Athletica inc.(NASDAQ: LULU) stock enhanced over 8.9% in the pre-market session on December 7th, 2017 (as of  8:05AM EST; Source: Google finance) post their solid third quarter of 2017 performance.

Lululemon Athletica Comps rose 7% on a constant dollar basis during the third quarter of 2017 while, adjusted gross margin enhanced 110 basis points and adjusted EPS rose 19%. LULU is aiming to deliver $4 billion in revenue by 2020. Their Online business witnessed a solid acceleration this quarter, with constant dollar comps rising 25% driven by double-digit rise in traffic, transactions.

They witnessed a solid performance across their array of KPIs, notably traffic and conversion enhanced in both stores and e-commerce. Constant dollar comps rose 7%, while adjusted gross margin expanded 110 basis points boosted by an ongoing strength and above plant performance and product margin, which rose 70 basis points and EPS enhanced 19%.

For Black Friday the group launched vast collection. They collaborated with Foster Run, one of the Europe’s premier couture lace house which contributed to their biggest week ever for pant sale in North America. Jackets and outerwear assortment enhanced 26% in the third quarter of 2017.  Men’s side, witnessed a 21% rise in new male guest transacting with this quarter. They expanded ABC franchise to include slim and joggers style and our first ever men’s campaign.

The group’s Asian business delivered an outstanding rise of 100% in Q3, while China surged 450%. The group believes that the e-commerce penetration in China could approach 40% to 50% of their business as they enhanced their distribution channel, including Tmall and WeChat. Tomball’s singles this year business tripled against the prior corresponding period. Europe, reported a solid market growth of 40%.

The group is tapping potential In North America across store and digital, and validating their co-located store strategy and seeking opportunities in both the U.S. and Canada. They are opening 22 seasonal stores in North America and as the holiday season started, the group saw a highest traffic and largest revenue day ever on Black Friday and on cyber Monday. This was their largest ever of online sales.

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