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    $120 has to be the bottom for LULU… right?

    They have zero long term debt. I say again, they have zero long term debt. 9x P/E ratio. 9!? This isn’t The Gap. What the heck is going on. 55%+ gross margins. $1.8 Billion in cash. Aggressive buybacks.

    Okay, okay so US sales are flat. But…. International comparable sales are up 20 %.

    There’s as incredible disconnect between this company’s financials and the pricing of its stock. And I’ll tell you why.

    LEADERSHIP CATALYST. It all has to do with the proxy battle between the founder and the board and most recently dissatisfaction with the newly appointed CEO who spent start before… September!? Why the heck would they announce a CEO and say she doesn’t start for another five months.

    LULU is not a value trap at $120. I’m calling the bottom here. It’s not going any lower.

    On a final note- Lululemon’s financials are excellent and that’s why O’Neill is a fantastic pick for CEO. She wouldn’t have been a great if their financials were bad but since they’re not they don’t need someone who can act as a hardcore turnaround operator. What they need is someone who understands product innovation… which is exactly her.

    I am 50/50 LULU and NKE in my portfolio. And nothing else.

    $120 has to be the bottom for LULU… right?
    byu/lies_are_comforting inStockMarket



    Posted by lies_are_comforting

    13 Comments

    1. Illustrious_Safe7658 on

      Unless youre luxury… Fashion degrades in status over time. In 5-10 years. This may very well become gap.

    3. frustrated_futurist on

      The rich will only buy so many stretchy pants they need, the poor’s buy their stretchy pants at Walmart.

      But they are very comfy stretchy pants from what I’ve read.

    4. ContextFew721 on

      Jesus. I had like 2-3K in each of Nike and Lulu and couldn’t stomach watching them lose money any longer. I’m sure they will rebound eventually but why wait for them to take years to double when DRAM is doubling every fourth week. Value prop just isn’t there

    5. Aint_EZ_bein_AZ on

      Hahaha of course you’re a nike bagholder too. Imagine missing the biggest market in history and you’re holding dying clothing companies. You belong on valueinvesting

    6. Salt_Data3707 on

      Slowing revenue growth, eps declines last year and expected this year, margin compression….

      I mean..

    8. Iulian1988 on

      Hopefully the founder manages to change the board and leadership. Otherwise I don’t see how the stock could gain a lot from here. It is deeply mismanaged business.

    10. cbcl on

      I never see gen Z wearing lulu lemon. Its also not a flex any more amongst millennial women and theyre widely seen as overly expensive with deteriorating quality. They built their brand around upscale countouring yogapants and leggings, but baggy pants are in style now.

      Fashion is hard to predict, and LULU has a pretty narrow niche. Luxury athleisure might come back in style, and they might be able to capitalize on that, but its a lot of maybe. 

    12. Successful-Grab6091 on

      I’m excited for the future. As long as Chip McDouchwasher stays tf out of it

    13. Regular_Leg405 on

      You just gave me the idea for the perfect short…

      This thing is built around 1 fashion trend, its growth was explosive and in my opinion so will its crash be.

      It is just a fad started by an influencer who I believe will rug pull this thing if they haven’t already a long time ago. Go to any of these stores and they are dead, young ppl who were into it have moved on. The main risk remains how the market reacts, irrationality can thrive for long…

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