NIKE, Inc. (NKE), Under Armour Inc (UA): Why Lululemon Athletica inc. (LULU) Earnings Might Not Stretch Higher

Another potential area of controversy stems from the fact that Lululemon hasn’t offered plus-size active clothing. With lines topping out at size 12, the company falls short of The Gap Inc. (NYSE:GPS)‘s Athleta line, which gives customers up to size 20 options for activewear.

More competition is starting to come into Lululemon’s niche. Athleta has been around for a while but has started coming into its own in the wake of Lululemon’s problems, with a smart strategy of locating its stores near existing Lululemon locations. More recently, Fifth & Pacific Companies Inc (NYSE:FNP)‘s Juicy Couture has come out with plans to start a yoga line next year as part of a broader initiative to establish a lifestyle collection.

In the Lululemon earnings report, watch to see how the company’s CEO search is progressing and what steps it’s taking to clamp down on quality control. Without solid growth that tops expectations, Lululemon Athletica inc. (NASDAQ:LULU)’s stock could see more downside in the remainder of the year.

The article Why Lululemon Earnings Might Not Stretch Higher originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool recommends Lululemon Athletica, Nike, and Under Armour and owns shares of Nike and Under Armour.

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