Jefferies cut its price target for Lululemon by $15 and reiterated its hold rating on the shares, citing the prospect of lower earnings due to increased promotional discounting.
"Web-scrape still shows elevated promos," analyst Randal Konik wrote in a note to clients Friday.
"We've closely monitored the 'We Made Too Much' section of LULU's website and have observed heightened promo activity, which stands to threaten the significant GM [gross margin] expansion expected for 2H [second half] and potentially speaks to softening trends."