Lululemon Earnings: Disappointing Current Trends but Long-Term View Intact; Shares Very Attractive

Lululemon's first-quarter sales rose 4% as increases of 30% in mainland China (19% of sales) and 13% in other international (15%) offset a 3% decline in the Americas (66%). Gross and operating margins fell 410 and 730 basis points, respectively, to 54.2% and 11.2%, on higher tariff and store costs.