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Lululemon Athletica (LULU) Stable On Monday, But Shares Of Clothing Manufacturer Likely To Remain Volatile

Shares of the sportswear maker Lululemon Athletica Inc. (LULU) have increased by more than ‎‎51 percent since the beginning of the year. The business has seen rapid e-commerce growth, ‎which allows it to compensate for the decline in traditional stores’ traffic. However, many risks, ‎including the trajectory of the COVID-19 pandemic in the United States and other nations, ‎impact the business of Lululemon Athletica. The leadership does not give its own guidelines, but ‎expects a small growth slowdown. Generally speaking, despite the optimistic outlook for the ‎pre-holiday season, due to the general market situation and not completely expected consumer ‎behavior, LULU shares could remain volatile.‎

Lululemon Athletica announced a sharp rise in revenue at the beginning of December, thanks to ‎a fast-growing channel of online sales. In the pre-holiday season, the business got off to a ‎strong start, but the pandemic still restricts the potential of stores. While last quarter’s overall ‎growth was 22 percent year-on-year, sales fell 18 percent at traditional Lululemon Athletica ‎stores.‎

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Lululemon stores have historically seen high traffic during the pre-holiday season, but the ‎company this year expects participation to be about 70 percent of last year’s figures. The firm ‎also believes that growth will slow down in the current quarter from the 22 percent shown in ‎the previous reporting period.‎

A large volume of inventory is a concern for Lululemon, and this level has risen year-on-year by ‎‎23 percent. The company claims that, without cutting costs, it can cope with this rise, which ‎occurred due to the temporary closing of stores in the spring.‎

The good news for investors in Lululemon is that all of its issues are probably temporary. They ‎should be prepared for increased volatility at this point, but Lululemon’s benefit is a huge loyal ‎customer base.‎

Lululemon Athletica Inc. (LULU) was stable at marginal drop of -0.02% to conclude the Monday ‎trading at $351.36.‎

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