On Thursday's Market Foolery, host Chris Hill and Motley Fool One analyst Jason Moser dip into lululemon athletica's (NASDAQ: LULU ) first-quarter report.
Chris explains that, although the first-quarter profit was good, the clothing company lowered guidance and called 2014 a "transitional year." The stock ended the trading day down nearly 16%. Jason says that the stock has been priced to reflect expectations of rampant growth. The quarter wasn't bad, he adds, and excluding the $30 million repatriation charge that Lululemon paid for moving $500 million back into the U.S., the company actually beat expectations. Yet he concedes that when management terms a year "transitional," it's code for "look out below." However, Jason sees the company's stock buyback plan as a solid strategy that could work, and he considers the brand not broken, but rather in a period of reestablishment.