More Downside Likely Ahead for Lululemon Athletica inc. (LULU)

Foot Locker, Inc. (NYSE:FL) is experiencing a tremendous amount of same-store sales growth, and this has led to the earnings per share forecast increasing nicely. Analysts believe the company will earn $2.83 per share by the end of next year and $3.12 in 2015. That represents a P/E ratio growth of nearly 15% next year and almost 10.5% in 2015.

I am also bullish on Foot Locker because of the company’s selection of name-brand shoes that many teenagers and adults gravitate towards. The teenage segment still has growing feet, and they will need new shoes after they have outgrown the pair they are currently wearing. That creates a cycle of customers for the company.

Finding the best apparel company

Lululemon Athletica inc. (NASDAQ:LULU)’s ship could very well be sinking. It’s at least a firm that will likely have unusual expenses related to lawsuit settlements in the years ahead. That’s not likely to make a massive impact on potential net profits, but the series of people close to the company jumping ship is cause for concern. After all, in addition to the founder appearing to be positioned to sell a significant portion of his holdings in the company, the firm also lost its long-time CEO and is on the hunt for her replacement.

Lululemon Athletica inc. (NASDAQ:LULU) is being tested right now, and could very well end up coming out back on top, but Nike and Foot Locker are much safer places to put your money for probably the next couple years.

The article More Downside Likely Ahead for Lululemon originally appeared on Fool.com and is written by Phillip Woolgar.

Phillip Woolgar has no position in any stocks mentioned. The Motley Fool recommends Lululemon Athletica and Nike. The Motley Fool owns shares of Nike. Phillip is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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