Jim Cramer Says “LULU’s in the Penalty Box Here”

lululemon athletica inc. (NASDAQ:LULU) is one of the stocks listed in our article, Jim Cramer recently discussed these 10 S&P 500 stocks. Cramer acknowledged that he was wrong about LULU bouncing back in May and said:

“The fourth worst performer, wow, lululemon athletica, the former athleisure kingpin, which suffered a nearly 38% decline in the first half. lululemon’s struggling for some of the same reasons as Deckers, and that includes an excessive reliance on Vietnamese manufacturing, which we all thought people should be doing. Back in late May, I told you that lululemon might be due for a comeback, given how far its stock had fallen. That was a big mistake of mine. I guess I had too much reverence for the brand, and I thought the expectations were too low.

No, turns out they weren’t low enough. LULU reported a stinker of a quarter last month, sending its stock down almost 20% in a single session, and it hasn’t been able to find its footing since. Can LULU come back now? Stock’s certainly cheap, selling for less than 17 times this year’s earnings estimates, but I just stuck my neck out on this one only to have it chopped off. At the end of the day, while LULU pretty much invented the athleisure space, that business has become incredibly competitive. So until they can put up better numbers, LULU’s in the penalty box here.”

A store employee in an athletic apparel store restocking merchandise.

lululemon athletica (NASDAQ:LULU) designs athletic apparel, footwear, and accessories for both men and women.

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