It's been nearly three months since lululemon athletica had to pull its stock of black Luon yoga pants after the proprietary fabric was too see-through for some buyers. The retailer began restocking most of the styles that were removed this week, but it will pay the price.
Analysts see a dip in profitability and decelerating growth when the high-end retailer posts quarterly results next week. The key here -- as longtime Fool contributor Rick Munarriz points out in this video -- is the guidance that it provides on its near-term future.
Upscale chains are thriving these days. Michael Kors posted blowout quarterly results last week, and handbag rival Coach boosted its dividend a week earlier. This should be a good time for Lululemon to bounce back, but it's going to have to prove that it's up to the task.
Lululemon has the potential to grow its sales by 10 times if it can penetrate its other markets like it has in Canada, but the competitive landscape is starting to increase. Can the company fight off larger retailers and ultimately deliver huge profits for savvy investors? The Motley Fool answers these questions and more in our most in-depth Lululemon research available. Thousands have already claimed their own premium ticker coverage; gain instant access to your own by clicking here now.
The article Lululemon Stock Has a Lot to Prove originally appeared on Fool.com.
Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Coach and lululemon athletica. The Motley Fool owns shares of Coach. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.