Lululemon Stock Downgraded

An analyst from FBR downgraded Lululemon and it had big effect on the stock price. Here is an article from the Vancouver Sun:

FBR Capital Markets downgraded the stock of sportswear retailer Lululemon Athletica to "underperform" ahead of its quarterly results and said the company's margins may be pressured in the near term.

"The stock appears priced to perfection and we believe any glitch on earnings could result in a sell-off," analyst Liz Dunn wrote in a note to clients.

Dunn said she was concerned that the quality has slipped a bit due to changes in the sourcing operations but expects the company to maintain its quality at the expense of margins.

This could benefit the maker of trendy $100 yoga pants in the long term but will pressure the stock near term, she added.

Company's shares closed at $89.82, down $5.66, on Thursday on the Toronto Stock Exchange.

Analysts really are idiots. I've been talking about bad quality for at least two years, and now, when Lululemon has fixed their luon recipe so the quality is actually improving with that fabric, they get hit with a charge of bad quality. Lululemon truly deserves a black eye for the total bungling of the website "upgrade" and changeover to the new distribution center. They were on a rampant growth curve and brought it to a screeching halt by essentially shutting down their website for a good three weeks. That's what the analysts should be talking about.