Hear me out... LULU 120 was the bottom - The new releases are lit
The market has given everyone a great opportunity. Stupid board member squabbles. Everyone on reddit knows the normies making peanuts are the ones driving the fashion and the path forward in the company. The board members waving around their shares is really a distraction from the recent products.
I took some time today to go through LULU's recent product releases and they are fantastic. Future looking, fitting both trends and professionals a like. They are moving quickly away from leggings and blending style with athleisure.
There are a lot of valid concerns around U.S. growth however its currently priced as a business that is rapidly shrinking. I expect U.S. growth to turn around with their recent foray into new styles and cloths as well as the eventual end of tariffs and import controls. Price inflation is here to stay, LULU is just going to see insane margins when import tariffs are lifted.
- Growth Segments -
International (Global)+22%+15% - Core growth engine compensating for domestic headwinds.
China Mainland+28% (Q4)+26% (Q4) - Surging demand and highly resilient guest engagement.
Americas / North America-1%-3% - Saturated market facing heavy competition from rising brands.
Forward P/E of 11-12 and current P/E of 9.5
Position: 900 @ 123.75