"Comps improved from 2Q, but the 4Q guide disappoints, as store comps in particular continue weak. Gross margin also disappointed to the downside, with 4Q forecast to be substantially lower year-over-year," analysts noted.
"While the quarter perhaps provided investors with the sense that a turnaround is progressing, we remain cautious in the face of still-weak comps and heavy investment spend this year (and possibly next year too)," analysts continued.
"All in, while we recognize some progress in the story, we're uncertain about the FY16 P&L, on which we believe a 25x P/E is full. [We] raise [our] price target as valuation shifts from NTM to FY16," analysts added.
Separately, TheStreet Ratings team rates LULULEMON ATHLETICA INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate LULULEMON ATHLETICA INC (LULU) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."