By Carly Forster

Lululemon Athletica inc. (NASDAQ:LULU) is a Vancouver, British Columbia based yoga-inspired athletic apparel retailer who produces its own clothing line which is sold in Lululemon stores across the globe. On September 11th, the retail chain released its second quarter report that ended August 3rd and its results were better than expected, with an improved outlook.

During its Q2 results, Lululemon reported $0.33 earnings per share on a diluted basis, beating analysts’ consensus estimate of $0.29 by $0.04. During the same quarter last year, Lulu posted $0.39 earnings per share. The company had revenue of $390.70 million for the quarter, compared to the consensus estimate of $376.95 million. The retailer’s revenue for the quarter was up 13.4% on a year-over-year basis. On average, analysts expect that Lululemon will post $1.76 earnings per share for the current fiscal year.

Lululemon shares jumped up 17% after the release of its second-quarter results of Thursday. However, flat sales convey the company has a ways to go before getting back to the high status it was once at. CEO Laurent Potdevin said in a conference call to analysts, “We are early in the process of getting back to consistently delivering amazing product to our guest along with unmatched guest experience…We obviously don’t aspire to flat same-store sales and earnings that are down year over year.”

On September 11th, UBS analyst Roxanne Meyer reiterated a Neutral rating for Lululemon, reasoning, “While Q2 (comparable sales) slightly beat expectations, it does not reflect material improvement in product and innovation, where we have been disappointed during our channel checks. At a time when the athleisure trend has become front & center across retail, LULU is lagging in terms of innovation and only partially participating in the print trend. We believe this will serve as an incremental headwind as market share migrates to other brands, such as Athleta and smaller up and coming brands.” Meyer currently has a 69% success rate in recommending stocks, earning her a +8.8% average return on all stocks she has rated. Meyer has also rated Lululemon Athletica inc. (NASDAQ:LULU) 12 times, earning her a 60% success rate on the stock with a +1.5% average return.

Lululemon Tipranks

Separately on September 12th, Motley Fool blogger John Divine warned investors to “ignore the LULU stock earnings bounce.” He noted, “While Lululemon Athletica inc. (NASDAQ:LULU) stock isn’t an absolute lemon in my eyes, I think one of its long-term risks is its somewhat faddish nature.” Divine has a 71% success rate in recommending stocks, but that comes with a +4.2% average return.

Lululemon Tipranks

While one financial expert thinks Lululemon still has somewhat of a fighting chance, the other thinks the risk simply is not worth it. Whose recommendation do you trust?

To see more recommendations for Lululemon Athletica inc. (NASDAQ:LULU), visit TipRanks today!

Carly Forster writes about stock market news. She can be reached at [email protected]