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Buy or Sell: Lululemon (LULU) - Real Time Insight

Posted
3/20/2013 10:48:00 AM
By: Zacks.com
Referenced Stocks:LULU

Lululemon ( LULU ) has been a hot stock for many investors over the past few years. The company has seen tremendous earnings growth and it has become a popular pick for investors seeking a top retail name that has potential for further gains.

In fact, in 2012, LULU added about 40%, easily outpacing the retail sector and the broad S&P 500 as well. However, 2013 hasn't been as kind to LULU as the firm has faced a big slump to start the year, and then further issues lately thanks to quality control issues.

The company actually revealed, just a few days ahead of the earnings report, that it was recalling many pants from one of its key lines due to the see-through nature of the fabric's sheer. This information on a line that accounts for nearly 20% of the business helped to push the stock down by nearly 7% in the past five days.

Now, with earnings coming up on Thursday investors are left with a very difficult decision; buy or sell this once high-flying stock?  

Reasons to Buy:

Reasons to Sell:

What do you think?

Is this a great time to buy a superb retailer on a dip, or is it the end of LULU's incredible story?

Let us know in the comments below!

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