Buy Lululemon (LULU) Stock at New Highs on Digital & Menswear Growth?

Welcome to the latest episode of the Full-Court Finance podcast from Zacks Investment Research where Associate Stock Strategist Ben Rains breaks down Lululemon’s (LULU - Free Report) Q2 2019 financial results that wowed Wall Street last week. The episode then dives into what investors need to know from the yoga and athleisure retailer’s earnings call and what’s next, to help see if people should buy and perhaps hold the stock that has crushed its industry and sportswear giant Nike (NKE - Free Report) .

At this point, many people who have never stepped foot in a yoga studio have heard about Lululemon’s rise to athletic apparel prominence. The Vancouver, Canada-based firm, which opened its first stand-alone store in 2000, ended Q2 with 460 stores. Lululemon’s success sparked the broader athleisure movement that includes everyone from industry powers Nike and Adidas (ADDYY - Free Report) to Gap (GPS - Free Report) , L Brands’ Victoria’s Secret and even Target (TGT - Free Report) .

LULU shares soared a new 52-week and all-time high of $204.44 last Friday after the firm crushed Wall Street estimates on both the top and bottom lines. The firm’s sales jumped 22%, which marks the continuation of strong revenue growth. Lululemon’s women’s business remains impressive, but its men’s, digital, and international expansion will drive the firm’s broader growth over the next several years.

The firm has also expanded in Europe and Asia, with a focus on China. Plus, Lululemon’s portfolio goes far beyond athletic apparel these days, including outwear offerings that compete against Canada Goose (GOOS - Free Report) and The North Face (VFC - Free Report) . On top of that, the firm’s self-care products have grown, as the firm rolls out more membership tests in cities such as Chicago—where LULU recently opened a massive 20,000 square foot experiential store that could be key going forward.

Looking ahead, Lululemon’s growth outlook is stellar. Meanwhile, LULU, which is a Zacks Rank #2 (Buy), appears to be a standout in the broader retail industry, especially compared to department stores like Nordstrom (JWN - Free Report) and Macy’s (M - Free Report) .

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