Investment Strategies / Mechanical Investing
No. of Recommendations: 4
Down >20% on weak guidance in the face of tariff uncertainties. TACO trade?
No. of Recommendations: 2
I'm curious how vulnerable they are to a recession involving their core customer base. Their stuff is quite expensive and if they customers are feeling pinched, they may forgo some expensive ath-leisure clothing for a while. Plus, I have read that quality has declined since they first got to be trendy.
No. of Recommendations: 2
In my circle (wife, kids, etc...) their brand is very strong - no mention of quality issues. Yes their products are expensive :)
tecmo
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No. of Recommendations: 1
LULU has reached a level around 246 that looks good to me. CFRA has it rated 5* since the price drop, and M* currently pegs fair value conservatively at 305. Balance sheet is rock solid. I've opened a modest position.
No. of Recommendations: 3
I want a lower entry price, below 15 * 2025 EPS. So I sold March 2026 $240 puts for $28. Should give me an entry price of $212 if put or an yield of almost 18% on the cash backing the puts. Will be satisfied with either outcome.
No. of Recommendations: 4
I am on the fence after looking at this a bit.
The EPS trend has been very good the past 5 years
Sales EPS (TTM) Stock Price* PE
2021 : $ 4.40B $ 4.70 $322 68
2022 : $ 6.26B $ 7.79 $297 38
2023 : $ 8.11B $10.07 $330 32
2024 : $ 9.62B $12.77 $311 24
2025 : $10.59B $14.64 $315 21
2026?: $11.25B? $14.80? $225? 15?
* Jun 1st each year
Yes during this time the stock has been generally flat - showing how much growth was priced into the stock back in 2021. My general hesitation in investing in retailers is also a bias I have.
Forecasts are for $14.80 per share in EPS this year, but that is based on a fairly pessimistic view on tariff policy (TACO opportunity?). On the negative side, have they tapped out their growth potential on the top line? Their products are for a very specific market - that customer base is loyal but can they grow it?
I would suggest an entry point below $225 is probably on the safer side for a trade - with the expectations that the tariff policy challenges are over stated and the stock would probably pop back over $350 - but that is a speculative position; so it would be risky.
tecmo
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No. of Recommendations: 2
<<On the negative side, have they tapped out their growth potential on the top line? Their products are for a very specific market - that customer base is loyal but can they grow it?>>
China is the second largest market in the world for athleisure wear, and LULU has only begun to penetrate there, with much success to date. The company keeps innovating with new materials and products. They're also planning on entering the athletic shoe market. And they have plenty of room to grow in clothing for men.
No. of Recommendations: 3
Stock price continues to crater, down to $195, back where it was in 2019.
If you think they can earn $14 / share this year then it looks like good value;
For what its worth analysts have the range of $12.92 to $16.26, with $14.72 as the average. This coming quarter is estimated at $2.90
I am contemplating starting a position here...
tecmo
...
No. of Recommendations: 0
No. of Recommendations: 2
down to $195, back where it was in 2019.
If you think they can earn $14 / share this year then it looks like good value;
For what its worth analysts have the range of $12.92 to $16.26, with $14.72 as the average. This coming quarter is estimated at $2.90
I am contemplating starting a position here...
I am sorely tempted, too, but I think the whole question is, is Lululemon going out of fashion, with sales and earnings falling off in the next few quarters, or can the company be expected to continue at something like the current level of sales and perhaps keep growing, as it has in the past? Clearly, the fall-off in price is because a lot of investors think the brand is stale and customers are starting to prefer alternatives like Aritzia, Vuora, or at the cheaper end Athleta, Nike, Alo Yoga, etc.
Fashion is fickle, and I don't have enough of a feel for this to buy LULU at 13x trailing earnings. My gut feeling is that the brand is still intact but what would a 60 y.o. male like me know?
dtb
No. of Recommendations: 2
Fashion is fickle, and I don't have enough of a feel for this to buy LULU at 13x trailing earnings. My gut feeling is that the brand is still intact but what would a 60 y.o. male like me know?
I am of similar vintage :) My wife and two daughters (small sample size) continue to view the brand positively ; in fact a few hundred dollars was just dropped at one of their stores last week (its amazing how much they are able to charge for a pair of shorts!)
tecmo
...
No. of Recommendations: 1
I am of similar vintage :) My wife and two daughters (small sample size) continue to view the brand positively ; in fact a few hundred dollars was just dropped at one of their stores last week (its amazing how much they are able to charge for a pair of shorts!)
I will add my wife and 3 daughters to this sample size. I even bought some yoga pants from Costco for the wife after seeing the lawsuit LULU filed against them . She did not like them and the daughters refused to even entertain the idea.
No. of Recommendations: 1
<<Clearly, the fall-off in price is because a lot of investors think the brand is stale and customers are starting to prefer alternatives like Aritzia, Vuora, or at the cheaper end Athleta, Nike, Alo Yoga, etc.>>
Read the rest of the M* review. It's mostly because of tariff concerns. That's when the stock tanked. M* rates LULU 4*, CFRA rates it 5*. The reasoning looks sound to me.
I'm underwater in my small position but looking to add. Lulu's core demographic is relatively immune to modest price increases, and those tariff-related increases will hit competitors, as well.
No. of Recommendations: 5
I went by the Lulu store in our area to check it out. Have to admit that the clothes are quite nice, but as you know with an eye popping price tag. Liked the men's clothes as well, and the men's slacks look fantastic for travel. I may pop back in when I have more time and actually try some clothes on. Also chatted with one of the employees for a few minutes. She loves working there, having started as part time and 18 months later is in what is essentially a supervisor position. (Granted, she is 19 and has the life experience of a gnat, so big caveat on those rose colored glasses.) Said she is heading to college shortly, and they are working with her schedule so that she can both work and go to school. She got hooked on the brand from her mom, who gives her 4 girls the hand me downs, which they gratefully accept. (Teens gratefully accepting hand me downs from a parent is atypical, FYI.) Stated she gets good benefits, but again, 19, so what does she know. Store was crazy well organized, staff was very attentive. I left thinking they should really market this stuff for those who travel lightly, as it seemed as though you could wash it in the sink and hang to dry.
I asked if they still do the repairs on clothing, which according to a friend used to be a lifetime thing. They do not. They will replace if there is an issue in the first year. Great way to keep tabs on quality of product.
IP,
intrigued
No. of Recommendations: 10
I went back to our LULU store yesterday for a shopping experience. At 6 PM Sunday, an hour or so before close, about 6 shoppers in a very small store. Don't know if it is small compared to others as it's the first I have been in, but rents are insane here.
What a luxurious experience. Greeted right away and catered to, intensely but delicately at the same time. Never pushy and always helpful, able to converse intelligently. The bag they put the purchase into is one I will be pleased to reuse. Free hemming on pants. Happily the two pair of pants I bought were on clearance, making them "only" $80 each. I confess I would have never bought them as running pants, but for our upcoming trip they are perfect. I love the way these pants make me feel.
This was a brief foray, but I will be back to check out their other products. Since we will be in Canada for a few weeks, will keep an eye out for stores there to pop into as well.
Maybe I've lived under a rock, but I had no idea they produced anything but yoga clothes. These are great travel clothes and they seem to be missing the opportunity to trumpet that fact. Also a market that is seemingly untapped is larger sizes. Perhaps it is the function of the small store I was in, but there were no clothes above a size 14, though they are apparently available on-line. These are clothes that need to be tried on for most buyers to reach for their wallet. If they were to go into travel clothes, that small size would eliminate half the US population.
I am not a label buyer of clothes and don't care who the designer is, but I love the way these clothes look and feel, and the shopping experience was the opposite of dreadful, which buying pants for me normally is.
IP
No. of Recommendations: 1
I opened a smallish position earlier this week - depending on the earnings report I might adjust (still have room to add, or possibly even sell if there is a pop).
tecmo
...
No. of Recommendations: 4
Although the numbers look appealing (in hindsight) should LULU be put into the too hard pile because of the fickle taste of fashion, same with Nike?
I own some Nike and am thinking about this atm.
Thinking about companies like Gymshark, own brands / labels and also every man and his dog promoting their own clothing lines. Are the days of tasty margins for Nike a thing of the past? Will NKE and LULU recover?
No. of Recommendations: 2
:(
https://www.cnbc.com/2025/09/04/lululemon-lulu-q2-...They seem to be putting a lot of blame on tariffs, but it seems their products are also an issue
Lululemon
shares plunged in extended trading Thursday after the company gave a much worse than expected full-year outlook.
The company topped second-quarter earnings estimates but slightly missed revenue expectations. But it said it expected tariffs to hit its full-year profits by $240 million.
Lululemon said it expects full fiscal year earnings of $12.77 to $12.97 per share, well below Wall Street estimates of $14.45 per share. It also anticipates full-year revenue of $10.85 billion to $11 billion, compared with Wall Street expectations of $11.18 billion.and
“We have become too predictable within our casual offerings and missed opportunities to create new trends,” he said, identifying those issues as the “root causes” of the company’s product challenges in the U.S.might need to pull the plug on this...
tecmo
...
No. of Recommendations: 10
I've invested in fashion-type stocks over the past 20 years: Lululemon, Coach (now Tapestry), Deckers, Michael Kors (now Capri). Net, I made a lot of money, but I concluded these companies are too fickle. Well, not the companies, but the consumer, and in turn, the stock. So, I've sworn them off. Too hard pile.
No. of Recommendations: 1
Went into a store in Montreal yesterday, and it was packed. Is it the on-line traffic that is down? That said, I think they are missing a huge boat by ignoring the less svelte middle aged traveler. Create another line if necessary, making travel clothes for all sizes with those wonderful fabrics they already developed. Lululemon Voyager, or some such.
I am absolutely loving my "running pants" for travel. Those zip up pockets are fabulous and the pants are not only comfortable, but also look great. Much of their existing line could easily fit as travel gear, but the ads need to be targeted.
IP,
not a buyer yet, but closely following
No. of Recommendations: 1
Down about 18.5% in pre-market.
Since we are in Montreal right now, my news feeds are about the Canadian economy. Looks tough and getting tougher, yet, again, the stores here were packed. That coupled with the tariffs, even should they get reversed, gives me pause. I'll see what the stores in Quebec City shows next week. What I saw here may just have been Labor Day sales, though nothing in the store actually looked to be on sale.
IP
No. of Recommendations: 1
OK, so I see the point of the lawsuit against Costco now that I've been to one in Montreal. Picked up a wonderful skort for pickleball on about 50% off sale for C$10,(including the roughly 15% tax,) vs the too short skorts in Lulu that were 50-ish, IIRC. Probably won't last as long as those at LULU, but being able to buy 5 for the price of 1 could sure extend that life. We come from the land of tax free clothing. Having to add roughly 15% tax to a LULU purchase would make me think twice!
IP
No. of Recommendations: 0
Picked up a wonderful skort for pickleball on about 50% off sale for C$10,(including the roughly 15% tax,) vs the too short skorts in Lulu that were 50-ish, IIRC.
"Our plans for World Pickleball Domination have been unleashed!"
No. of Recommendations: 1
"Our plans for World Pickleball Domination have been unleashed!"
LOL. Where do you play? We may be on our way there next!
I confess I am in full withdrawal right now. Good thing we have so many great places to see and amazing food to eat to distract us from our pain. With all this walking I have no fears of losing my edge on the courts when we get back to it.
Enjoying Quebec City right now and will pick up our paddles when we get to Portland. Also hope to check out another LULU store while I am here, though definitely not buying more skorts!
IP
No. of Recommendations: 5
Thinking about this one I think LULU may have more in common with Under Armour than Nike. Ie that a turnaround will be difficult to engineer and the share price may continue to decline.
I found this video on YouTube quite insightful. As much as I like Lynch and his scuttlebutt approach it's always insightful to get as many opinions as possible for and against.
https://youtu.be/wzzc__Vv0hI?si=D-0WwMbj8jwV8czt
No. of Recommendations: 2
Great video, thanks for sharing.
"Ie that a turnaround will be difficult to engineer and the share price may continue to decline."
I don't disagree that the price is probably going to continue to decline and am in watch mode, but I see a great pathway to rebound. Unfortunately, the company I envision is not the company that exists, so am not pulling the trigger.
LULU has a serious perception problem, which this video confirmed. Telling your buying public they just may not have the body for LULU clothing is insane, but the limited sizes in the stores and anorexic twig models in the ads screams as much. The video talks about the need for less tight fitting clothing, as though yoga pants were all they sold, and indeed until I recently went into a store for stock research, that's exactly what I thought. I was delighted to find beautiful, comfortable running pants that look great anywhere, in a fabulous fabric that you are likely to be able to wash out in your bathroom sink and hang to dry while traveling. (Not yet tested that theory as we rent apartments with laundry units when traveling, but it's on my list to check out.) Their men's department has very nice clothing, even business appropriate, all made with their excellent fabrics. They are missing a huge market by focusing on advertising tight clothing and ignoring the travel wear connection, which larger sized people would flock to. And where is that advertising? While I may have simply tuned out any ads from LULU, I can't recall seeing anything until I became a "member" with my purchase. I am now flooded with email ads of course, all of them touting the skinny models wearing clothing that I have pretty much zero interest in, probably because the too tight clothing even on these sticks don't look at all comfortable. They have invested in the materials, so why not use them on travel wear?
The good news is that the CEO seems to understand they have rested on the yoga pants laurels too long, and that change is needed. Hopefully they didn't wait too long for that and can recover. Perhaps even a new brand launch, specifically for more inclusive clothing would be in order.
I also wonder about waiting too long to pull the trigger. The courts have ruled Trump's tariffs as illegal. Will there be a significant rebound if the Supreme Court backs up the lower courts and tariffs are pulled? I confess I am not rushing to put my cash into this market. We are not in the phase of life where increasing our net worth is the primary goal.
FWIW,
IP
No. of Recommendations: 0
They are missing a huge market by focusing on advertising tight clothing and ignoring the travel wear connection, which larger sized people would flock to. And where is that advertising? While I may have simply tuned out any ads from LULU, I can't recall seeing anything until I became a "member" with my purchase. I am now flooded with email ads of course, all of them touting the skinny models wearing clothing that I have pretty much zero interest in, probably because the too tight clothing even on these sticks don't look at all comfortable. They have invested in the materials, so why not use them on travel wear?
New ad just hit my email with lots of comfortable looking travel or business casual clothes that I knew they had from exploring the store. Perhaps they are starting to walk their talk about a direction change. Hopefully that will eventually also include models that look older than 19 and have an ounce or two of fat on them, though they may be concerned about alienating their existing base. Still don't know if these ads are getting out to the general public, or just "members." Happy to see it either way.
IP
No. of Recommendations: 1
Earnings are due out on Thursday.
Expectations / Forecast
* EPS $2.21 (vs. $2.87 last year)
* Revenue : $2.48B (vs. 2.40B last year)
I recently doubled down; fingers crossed there are more skeletons that need to be exposed.
tecmo
...
No. of Recommendations: 1
No. of Recommendations: 3
A table of recent earnings
Period TTM EPS P/E EPS Revenue
October 2025 $14.72 14.11 $2.59 - 9.8% $2.60B + 8.3%
July 2025 $14.68 13.17 $3.10 - 1.6% $2.53B + 7.2%
April 2025 $14.73 18.83 $2.60 + 2.4% $2.37B + 7.3%
January 2025 $14.67 28.23 $6.14 + 16.3% $3.61B +12.7%
October 2024 $13.86 21.94 $2.87 + 46.4% $2.40B + 8.7%
July 2024 $12.96 19.56 $3.15 + 17.5% $2.37B + 7.3%
April 2024 $12.50 29.18 $2.54 + 11.4% $2.21B +10.4%
January 2024 $12.23 39.09 $5.29 +461.7% $3.21B +15.6%
I think there is still upside left, even at $210 / share. If they can get to $15.00 in EPS with a 20x multiple that would suggest $300 / share is possible.
tecmo
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No. of Recommendations: 3
https://finance.yahoo.com/news/elliott-said-build-...Elliott Said to Build a $1 Billion-Plus Stake in Lululemon
(Bloomberg) -- Activist investor Elliott Investment Management has built a stake of more than $1 billion in Lululemon Athletica Inc., according to a person familiar with the matter, as the struggling retailer faces a strategic overhaul amid its chief executive officer’s exit.
Stock is up 7%...
tecmo
...
No. of Recommendations: 1
I have a very short list of stocks I constantly watch and try to evaluate along the lines of Manlobbi´s IV10 method.
In this list of just a dozen stocks two stocks stand out as extraordinarily cheap: PYPL and LULU. While PYPL was/is discussed the last post on LULU is from 12.Dec.
Any comments?
(Apart from what a little googling finds: "Younger" competitors, activist founder shaking up board, "look-through" pants, professional commentators complaining the brand looks "old", not "fresh" (I wonder whether consumers think the same or simply continue to love their clothes (and the status they are buying with it))?
No. of Recommendations: 2
have stayed away for a simple reason.
lululemon experienced multi-year success in china that is extremely unusual for a non-luxury brand.
china is the most fickle retail base for the mass consumer, and will likely remain so unless middle class wages in india ever catch up.
No. of Recommendations: 2
Lululemon IS a luxury brand. Their yoga clothes always were and still are not targeting the mass consumer. It´s a status symbol, for people who are/think they are/want to be elite --- and are willing to spend a fortune for that. This goes so far that the founder once got in trouble saying not every woman has the body to wear their pants (meaning the McDonalds/Burger King etc. mass customer).
A Yogini showing Lulu´s symbol on her pants (it´s always a "her") signals "I am loaded and I am elite".
So actually what you say confirms me in Lulu being interesting indeed, as wealth is more and more common in China and India.
No. of Recommendations: 5
It´s a status symbol, for people who are/think they are/want to be elite --- and are willing to spend a fortune for that.
I think this may be a bit of an exaggeration. I have been in a few stores and yes, the prices are not exactly a bargain, but their clothing does not cost a fortune either. Have you looked at their website? Women's leggings are about US$100-$200, mostly closer to $100, with some on sale for half that. Canadian prices are similar.
At 11x earnings, and sales that, at least so far, are holding up, it seems like Mr Market is giving up maybe a tad prematurely. I don't have any insight into what trends might be and whether we really are at the end of the road for this company, but I don't see any signs of it. A brief home consultation reveals that women in my (Canadian) family like the brand, and would be delighted to get something from Lululemon for Christmas, for instance. They still have a reputation for being better quality, chic, a little edgy, and a bit of a luxury, but not a ridiculously extravagant one.
No. of Recommendations: 0
Women's leggings are about US$100-$200, mostly closer to $100, with some on sale for half that.
Mmhmm, maybe my view is too egocentric, too much using myself as yardstick, and therefore not able to assess this, with 2/3 of my clothes bought in Thailand (tip for travellers: Bangkok, either SBK or Chatuchak weekend market; nice shirts/shorts: $5). For a change tomorrow I will buy me some Lululemon - the stock of course, not the clothes.
No. of Recommendations: 3
never read any analyst putting lulu or apple into a luxury grouping.
most agree these are aspirational brands, still relying on unit sales in the multi-millions, not multi-thousands.
No. of Recommendations: 3
(I wonder whether consumers think the same or simply continue to love their clothes (and the status they are buying with it))?
I continue to watch the company as well, but am concerned about the corporate culture and the drive to change it back to it's old ways. That said, I do love the (deeply discounted) clothes I have bought from them, and discovered Eldest is also a BIG fan. Status oriented? Not one bit. Simply love the fabric, the fit, the quality. The fabrics hold up beautifully, unlike their low quality look a likes one can find at Costco, which seem to pill up as you look at them. Eldest hardly sees people as he works from home, and not at all status oriented either. He does not like to shop, and not yet settled into his own home, doesn't buy in volume to keep moving easier, which is why he likes the high quality clothes he buys here that seemingly last forever. He is definitely a quality over quantity guy.
As we travel, I pop into stores to check them out. Am consistently impressed by the quality of the workforce and how happy they all seem to be, how welcoming the stores are. No one standing there, staring at their phone, bored. All seem genuinely happy to be there, happy to help. Went after Christmas shopping with Eldest, and rather than let the store be insanely crowded, they had a line formed outside the store, waiting for their turn to enter as others exited with their purchases. This of course caught everyone's attention as they walked by, with many getting in line to see what the fuss was about. They were well staffed and very helpful, so purchases went surprisingly quickly. IMO their stores are a real asset. I have been to stores in NC, VA, and Montreal.
I had never been into a store before this past summer, and was pleasantly surprised that it wasn't just yoga clothes. As an investor, I am not pleased that I was surprised, and it's one of the things that make me hesitate. I wear my purchases for travel, the pockets absolutely perfect, with their inner pockets and zippers, to keep my cash and credit card/ID safe from pickpockets. Comfortable enough for all day tourism, while looking stylish. Even on steep sale, the prices were jaw droppingly high. Men's line is also great, though I can't get DH to even consider it, due to the price point. Note that the expansion past yoga pants is one of the ways in which the originator of the company thinks they have gone astray, while I think it's what makes the company worthwhile. I think they should go harder in their marketing to the travel crowd, and expand that line to be more inclusive of all sizes. Currently, they sell nothing past a size 16 for women, and according to one store I was in, those would be available only online. They are very youth oriented, and should find a way of expanding to the more affluent senior set with their designs, being careful not to alienate the young. I don't need or want my pickleball skorts that short, no matter what shape my legs are in, so I picked up knock offs of their skorts at Costco, where I was able to pick up 5 for the price of 1 on sale at LULU. I will need the 5 to come close to how long the LULU one would have held up well.
I see ways for them to improve and be more profitable, but do they? As I am not on the board, I am hesitant to buy shares until I can answer that question. I find the founder to have pretty repugnant ideas on marketing and it concerns me that he is looking to get involved again.
FWIW,
IP
No. of Recommendations: 1
Note that the expansion past yoga pants is one of the ways in which the originator of the company thinks they have gone astray, while I think it's what makes the company worthwhile. I think they should go harder in their marketing to the travel crowd, and expand that line to be more inclusive of all sizes. Currently, they sell nothing past a size 16 for women
... should find a way of expanding to the more affluent senior
... Costco, where I was able to pick up 5 for the price of 1 on sale at LULU. I will need the 5 to come close to how long the LULU one would have held up well.
... the founder ... it concerns me that he is looking to get involved again.
A nice example of how much opinions can differ. I knew LULU only from yoga studios/retreats, with the labels "expensive and exclusive" and "sexy clothes for sexy women" attached.
From what I read here my impression is that they lost their founder´s focus, that it´s like Porsche who once had the 911 line only, later expanded by the Boxster/Cayman line (with the Boxster saving them when they were close to ruin). Then all was good and they could have stayed where they were, an expensive, exclusive and sexy niche brand with extremely high margins and all would have been good.
But no, "of course" that was not enough, it had to be "more", they had to dilute the brand with all kinds of additional lines which more and more deviated from what the brand Porsche stood for: Panamera, the "family 911". Cayenne, to hop onto the SUV bandwagon. Macan, the SUV for the poor family who can´t afford the real thing. And tomorrow probably a little city car.
No more focus, no more being unique, no more moat --- like LULU.
No. of Recommendations: 1
No more focus, no more being unique, no more moat --- like LULU.
So much of their development money seems to go to creating new fabrics, so why not use those great fabrics and great quality to extrapolate their offerings to travel. Put it under a different label if worried about losing their OGs. Get more profit from the great fabrics they develop. Their fabric is what makes them unique. Design is easily copied and done all the time.
If sharks stop swimming, they die. Same for companies. Adaptation and squeezing more profits from investment is where it is at.
IP,
who never needed a label on clothes to tell me I was sexy ;-)
No. of Recommendations: 1
I have no interest in investing in LULU myself, but it has
made me think of which clothing companies have delivered
decent returns to investors:
- Nike (the most obvious outlier)
- Ralph Lauren (RL)
- TJX (not a pure apparel play, but resilient in tough times)
- Deckers Outdoor Corporation (DECK)
As opposed to brand companies that have been struggling:
- GAP
- LEVI
- Abercrombie & Fitch Co (ANF)
And for a non-US company, Zara (owned by Inditex) seems to be
very popular where I live in Europe.
-Rubic
No. of Recommendations: 1
So much of their development money seems to go to creating new fabrics, so why not use those great fabrics and great quality to extrapolate their offerings to travel.
This would be a huge mistake IMO. Travel clothing is not a market category that people associate with the brand and it would just dilute it. They have terrific stores and that is what they need to keep leaning into, the lifestyle that their customers are aspiring too.
tecmo
...
