Technical Analysis on Lululemon and Under Armour: Sportswear Stocks Trading at High Multiples

Technical Analysis on Lululemon and Under Armour: Sportswear Stocks Trading at
                                High Multiples

  PR Newswire

  LONDON, January 30, 2013

LONDON, January 30, 2013 /PRNewswire/ --

The specialist apparel industry is in the growth phase and is likely to touch
the $125 billion mark by 2017. The space has many key players including
Lululemon Athletica Inc. (NASDAQ: LULU), which sells premium priced Yoga and
fitness apparels, Nike and Columbia Sportswear. While Lululemon Athletica
caters to the upper segment of the market, Under Armour Inc. (NYSE: UA) sells
its products to more value-conscious buyers through its collaboration with
outlets like Foot Locker and Dick's Sporting Goods. The industry is expected
to benefit from the improving economy, giving consumers a little extra to
spend on discretionary products. StockCall has compiled a thorough technical
analysis on two companies on the apparel space. The free reports on Lululemon
Athletica and Under Armour are accessible upon registration at

Lululemon Optimistic about Q4

Lululemon Athletica raised its guidance for the fiscal fourth quarter of the
year. The company now looks to report its revenue at the top end of its
previously announced range of $475 to $480 million. It also enhanced its EPS
estimates to 74 cents per share, up from 71 to 73 cents it had projected
earlier. The stock, however, tumbled down on the news. Lululemon Athletica
currently trades at Price Earnings multiple of more than 43, which makes it a
rather expensive stock. Since the stock seems to be fully priced, the upside
potential is capped. Download the free technical analysis report for Lululemon
Athletica by signing up now at

Lululemon Athletica also faces growing competition. It sells through its own
stores and currently has 211 stores globally. It is also planning to expand
its online sales operations as e-commerce becomes the norm of the day.
Lululemon Athletica also has one of the highest profit margins among its peers
at about 20 percent. Premium pricing is the company's USP and its management
categorically states that it has no plans to go the discount route. The unique
positioning sets it apart from its wholesale-relying rivals like Under Armour
Inc. [ Free Technical Report on UA ] ^(1) .

Lululemon Athletica is expected to pay more attention to its online sales and
its growth in international markets in Europe and Asia.

Under Armour - Another Top Player in the Sportswear Industry

Under Armour's stock grew about 25 percent last year and has been a little
under pressure this year. Like Lululemon, Under Armour's stock also trades at
a high multiple of 46 and seems to be fairly, if not overly valued. The
company is likely to focus its attention on the stagnating footwear division,
which is currently lagging behind competitors like Nike. Under Armour also
plans to augment its international operations as it derives a miniscule 6
percent of its revenue from the markets outside North America. Thus, the
company has good growth potential in the overseas market.

Under Armour is set to announce its quarterly earnings on January 31 ^st . The
company grew its revenue by 20 percent in the past three quarters. However,
the growth trend is already priced in the stock. Currently, Under Armour
trades 20 percent lower than its 52-week high but it still sports lofty
valuation. Also revenue growth momentum seems difficult to sustain. The
company itself reported that it expects its 2013 revenue to be closer to the
lower end of its long-term growth target.

Under Armour may seek to grow through international expansion, but since the
company retails its products via partners, its international expansion plans
are going to be much more difficult to execute. 


1.Under Armour Inc. Technical Analysis [ ]

About is a financial website where investors can have easy, precise
and comprehensive research and opinions on stocks making the headlines. Sign
up today to talk to our financial analyst at

Contact: William T. Knight, Email:, Contact Number:
+1(646)-396-9857 (9:00 am EST - 01:30 pm EST)
Press spacebar to pause and continue. Press esc to stop.