In the last six months, shares of Lululemon Athletica (LULU) - Get Report are down 18%. The company reports third-quarter results on Wednesday. I think its a stretch to think the stock will go higher.

Back in April, I was skeptical about Lululemon. I thought it was time to take profits. At the time, the company had too much inventory, was facing a margin squeeze and the stock was sporting a premium valuation.

On Sept. 1, the company reported a somewhat disappointing quarter, with earnings of 38 cents per share, in line with the consensus estimate. Revenue rose 13.6% to $514.5 million. In constant currency, same-store sales rose 5%, slightly less than the consensus estimate of 5.2%. Comps were driven by double-digit growth in women's pants and mid-teens growth in men's pants.

Gross margin was 46.8%, up 260 basis points. The better-than-expected gross margin was driven by fewer markdowns. Higher operating expenses offset the better gross margins. In fact, Lululemon's operating expense ratio rose to 35% from 32.1%. Higher selling, general and administrative expenses and ongoing international investments drove the higher spending.

Because of the higher spending, Lululemon needs high-single-digit comps to leverage its occupancy expenses. If the gross margin expansion moderates -- which investors believe it will -- the stock could have a serious margin squeeze on its hands.

The company is about to lap last September's price hikes, which means gross margin comparisons are about to get more difficult. In addition, it will also lap the benefit from the "Pants Wall" reorganization of last September, in which the company changed how it displays different types of pants by fit and purpose. The Pants Wall changes drove back-half same-store sales last year. Last year's third-quarter same-store sales were up 9% and the fourth quarter was up 11%. It's unlikely the company will be able match those comparisons.

That's why I think the stock is likely to underperform. Unless Lululemon eases up on its international spending or finds a way to leverage its occupancy expenses through higher same-stores sales, I'm afraid the stock is stuck down in the $55 range.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.