Lululemon Athletica (NASDAQ: LULU) is a recognizable and iconic name in the fashion industry. Known for its high-quality activewear, consumers are often willing to pay a premium for its products. But Lululemon isn't immune to challenging macroeconomic conditions, and investors have been dumping the stock as its growth rate has slowed significantly in 2024. But now, with the stock down 50% from its high, is it too cheap to pass up?

On Aug. 29, Lululemon reported its second-quarter earnings numbers, for the period ending July 28. The company grew its revenue by 7% to $2.4 billion for the period, but was slightly short of analyst expectations. The company, however, delivered a solid beat on the bottom line, with earnings per share of $3.15 coming in far better than the $2.93 that Wall Street was looking for.

What's troubling, however, is that the company is seeing softness in its core markets in the Americas, where comparable sales were down 3% year over year. CEO Calvin McDonald said that not having new and enticing styles for women resulted in weak demand in its U.S. business. Sales growth in China was strong with revenue rising by an impressive 34%. But with the Chinese economy showing signs of slowing down, Lululemon may not be able to count on such high numbers for long.

Continue reading

Source Fool.com