Apparel Stocks: Lululemon Athletica (LULU) is initiated with a Buy and $68 price objective at Auriga, which thinks they are well positioned to capture discretionary dollar spend as consumers shift focus to healthier lifestyles --- LOOKS like NIKE is doing the same !!
See my posts on GMCR. I haven't posted here in awhile. This stock is actually moving up past GMCR on my list of puts candidates.
LULU is SO exposed to the currency effects. The YOY comps will have a net negative 10% bias this year (last year it was +10% bias) on 55% of sales. That is a HUGE swing. Even if the economy doesn't go into recession, comp store sales in the US will approach the rate found in Canada as they mature (I modeled SSS as a function of age and you can see the pattern). If we do go the recessionary path, comp store sales of $1500 a square foot is likely (were about $1400 sq/ft in 2008 recession). Coupled with currency effects, LULU could lose money rather than see growth.