AP News

Analyst sees positives for Lululemon

NEW YORK (AP) — Lululemon has some positive catalysts ahead of it after facing recent troubles including a pants recall and the announced resignation of its CEO, an analyst said Monday. He reiterated his rating on the yoga-wear maker as "Buy."

Lululemon's troubles began in March, when they recalled the Luon line of yoga pants for being too sheer. In June, the company said its CEO would leave after a successor was named.

The stock price has fallen 15 percent since the beginning of the year.

But Canaccord Genuity analyst Camilo Lyon said that there are some signs the worst is behind the Vancouver-based company. Restocking of the Luon yoga pants started in late May and an official in-stock announcement is expected this week, he said.

In addition, key management hires are expected in coming weeks, including the new head of design announcement likely by the end of the summer.

"We continue to fundamentally believe the demand for the brand has not ebbed and the growth opportunity both domestically and internationally is robust," he wrote.

He reiterated his "Buy" rating on the stock.

Lululemon declined to comment.

Its U.S. shares rose $2.13, or 3.4 percent, to $65.70 in midday trading Monday. That is in the middle of the stock's 52-week trading range of $52.20 and $82.50.

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