I think they will open about 30 stores per year, but there are significant risks to growth and the stock price over the next 12 months. Because the store growth did slow/stop in 2008/2009, the comp store sales will fall to the low teens over the next few quarters. Second, CAD/USD weakening will lead to lower gross and net margins, particularly on a comp basis.
Taken together, they are likely to significantly reduce the multiple until LULU demonstrates the success of the new concept and the other stores come online. Further, while Athleta and others have had no impact, investors will be cautious giving a hi multiple and may attribute the slowing growth to successful competition rather than local market saturation.
If the economy weakens, sales per square foot dropping anywhere near 2008/2009 would crush this. I'll post it later, but if things slow to even 2010 levels, I think they will have trouble financing store expansions.
Glad to hear you took some off the table. I think that was wise. The next year will be rough for LULU. It will be the transition from story stock to category leader, which ironically usually leads to lower multiples and market cap...
If you think this market won't be saturated in a couple of years, you're crazy. There isn't an infinite amount of people willing to spend $100 on a pair of pants. Once the core consumer gets saturated, they will only buy the basics. Growth gone. I used to buy a lot of UA clothing. Now I buy no more than one shirt, one pair of shorts, and maybe a pair of shoes a year. All at the outlet at least 50% off regular price. This year I've spent $0 on workout clothing.