LULU

Lululemon Athletica Inc

Consumer


Presented:09/16/2015
Price:$54.65
Cap:$7.74B
Current Price:$287.48
Cap:$35.30B

Presented

Date09/16/2015
Price$54.65
Market Cap$7.74B
Ent Value$8.36B
P/E Ratio29.07x
Book Value$7.77
Div Yield0%
Shares O/S141.64M
Ave Daily Vol2,788,953
Short Int16.01%

Current

Price$287.48
Market Cap$35.30B
Lululemon Athletica, Inc. designs and retails athletic apparels primarily in North America and Australia. It offers a comprehensive line of apparel and accessories, including fitness pants, shorts, tops and jackets designed for athletic pursuits such as yoga, running and general fitness. The company operates through corporate owned stores and direct to consumer segments. Its yoga-inspired apparel is marketed under the Lululemon Athletica brand name. lululemon athletica was founded by Dennis J. Wilson in 1998 and is headquartered in Vancouver, Canada.

Publicly traded companies mentioned herein: Lululemon Athletica Inc (LULU), Nike Inc (NKE),

Highlights

Shares of Lululemon (LULU) have come under pressure following the company’s most recent earnings call (9/10/15) and the presenter views the risk reward at ~$53 as favorable for bears. In addition to increasing competition and inventory and margin issues, he believes the company faces a material headwind in the form of a peak in the trend of women purchasing athleisure apparel (a development that only recently emerged over the past six-to-eight weeks). While it is “not always easy to understand consumer psychology,” his experience covering the retail sector has led to the observation that changes in taste and purchasing patterns “happen in a wave, and the trend tends to move very quickly.” The company has “a well-recorded history of stumbles,” and with a market cap of $7.5 billion (an expensive 7.5x sales) it is difficult to build a bullish case near-term.

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Idea Discussion

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