According to a report by CNBC, Lululemon Athletica Inc intends to have its Ivivva kids business wound down, as the company is focusing efforts on doubling its men’s business, doubling on-line sales and quadrupling its international operations by the year 2023.
Lululemon shares closed lower for a third consecutive trading session on NASDAQ on Thursday. It has also been the steepest daily loss since September 20th. The stock went down 0.77% ($1.48) to $191.54, after touching an intraday low at $189.64, or a price level not seen since September 20th ($189.18).
Shares of Lululemon Athletica Inc have risen 57.50% so far in 2019 compared with a 22.78% gain for the benchmark index, Nasdaq 100 (NDX).
In 2018, Lululemon Athletica’s stock surged 54.74%, thus, it again outperformed the Nasdaq 100, which registered a 1.04% loss.
Lululemon said that the 3 remaining standalone Ivivva stores in Canada and its 4 such stores in the United States are to be shut down by mid-2020.
As part of the scale down, any remaining assortments of Ivivva merchandise are to be pulled out of 8 Lululemon stores, where the company still has shop-in-shops.
“We’ve made the decision to close what remains of the ivivva business in order to unlock capacity to support our long-term growth,” Celeste Burgoyne, executive vice president of Americas and global guest innovation for Lululemon, said in a statement, cited by CNBC.
“We have forged strong relationships with an engaged community of active girls and we look forward to connecting with them through the lululemon brand,” Burgoyne added.
Lululemon also said the decision might “impact a small number of employees working at the company’s headquarters” in Vancouver, Canada.
Analyst stock price forecast and recommendation
According to CNN Money, the 28 analysts, offering 12-month forecasts regarding Lululemon Athletica Inc’s stock price, have a median target of $217.00, with a high estimate of $250.00 and a low estimate of $169.00. The median estimate represents a 13.29% upside compared to the closing price of $191.54 on September 26th.
The same media also reported that 18 out of 32 surveyed investment analysts had rated Lululemon Athletica Inc’s stock as “Buy”, while 12 – as “Hold”.
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