Lululemon Athletica (LULU) posted mixed Q2 results after the market close on Thursday. The company also slashed its full-year guidance. The stock was trading flat immediately after the results were released.

Morningstar equity analyst David Swartz thinks the lack of reaction is because most expected the results to take a hit after the company pulled its Breezethrough leggings from shelves following customer complaints.

One big area of growth for the company is international, with Swartz noting "Lululemon is really pushing hard in China and, so far, the results are really strong," saying it's viewed as an even more premium product than it is in the US. "The upside in China for Lululemon is very, very high, " he adds.

Watch the video above to hear what Swartz says about The Gap's (GAP) results.

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This post was written by Stephanie Mikulich.