What's great about this scenario is you have this HUGE short float and then a TOP analyst from Barclay's comes out and says, "We believe Lululemon represents one of the best risk/reward cases across our coverage for 2015."
And these shorts are digging in! Man, there is going to be hell to pay down the line if they don't get out now.
Men's sales is the underlying catalyst for this move. The numbers just keep growing, quarter after quarter. Lulu has a few growth cards to play but none stronger than men adopting the brand here in North America where existing stores are already. The truth is the women's numbers were unsustainable coming off a near fad like run 2009-2012. But what the company has managed to do is plug the fall off with men, as they ramp up international. Men did $300 million this year, way, way up from 2013 and a growth trajectory that will only get steeper as guys get more comfortable seeing other guys in lululemon.
That's a good idea. Better idea would be to flip and get long but you seem determined to fight a company with the highest profit margins in retail and global expansion right in front of them and oh yeah, the entire male population to market to.
You're missing the men, growing every quarter and will be doing $1 billion in three years. All they have to say is "more aggressive expansion coming" and this hits $75 by end of year. Everyone harps on the margins, still the best in retail. Pump and dump? The whole float is short. Call volume triple put volume...it's going to be bad on the short side..buy insurance. GLTY as well.
No one can see the logo? LOL. Sorry Buddy, but you don't get what's happening here. The market will soon prove it to you...
Everyone at the gym will look for the LULU logo and she won't have it. :(
Same with every luxury brand. What's so hard for people to understand about this? You can drive a toyota or a range rover, carry a MK bag or buy one from a street vendor...bottom line, the money and profit margins are in luxury brands, particularly when they have a world of growth in front of them.
Short? I love it. Buyers all up and through this stock, yet shorts persist. Only going higher off this pull back.
I'm thinking the beat as well. Men's will be the theme coming out and the market will wake up to the fact that while LULU has competition from Nike and UA, they both now have competition in men's from LULU. My hope and dream is LULU says they're revisiting their expansion plan to move much more aggressively in the USA and abroad. They should be striking while the iron is hot. If they do that, look out above.
Hard to say where it goes. Depends if the market is rebounding but $50 will get knocked over for sure.
By all means, short more. There were three and a half million shares bought today and I'm sure they'll buy as much as you want to short, tomorrow. Hedgies are buying. Three days until game over for shortie.
I'm not concerned. If you look at the volume, a big hedge bought in up in the $48/$49 range at the end of November. The market makers drove it up to generate enough selling interest to fill the 4 or 5 million share buy. Many people bought in off the Cramer hysteria in the $46-$8 range. With the buy done and those who jumped off the sideline, in the stock, they will now bring it down and make the recent buyers sweat. That's the way the game is played.
In the end, the brand and the company will make or break the investment. It will be fairly valued based on performance. Looking in at a half dozen stores in recent weeks, I'm not too concerned. This is a great brand and time will enable it to grow.
I don't know the exact mix but would guess it's 30% Canada, 60% US and 10% international.
I haven't read anything about this being a possible concern, are there other companies this has impacted negatively in the most recent earnings?
XRT the retail index down over 25. UA down almost 4% JCP down 5%. They took retail down today. Buying opportunity for those looking to get on board.
Checked it out on Saturday. One thing I LOVE about LULU is the pricing vs. square footage. You walk into a JCP and just imagine what it costs to run the place and how they make money selling $15 jeans.
You walk into the new mens store in Soho and think, "How can they not make a ton of money with this little store and these prices?"
My sense is LULU corporate doesn't realize just how big men's is going to get. Consequently, they are going slow and mitigating risk.
The store was tastefully done. A few new items I'd never seen before. Super friendly staff. Cool vibe, very boutique like. The branding for men is awesome, the new bags are all black with glossy matte writing, also in black. Very high end and very masculine. Smart.
The line still needs work. You go in there knowing you can get sweat pants and workout pants but what else? Work out shirts, shorts, a dress shirt here and there, hoodies... seems a bit all over the place but maybe that's what will work. My logic says they should try to nail down a few staple "Must haves" and build the line off that. Forget about casual and just nail the workout/casual with twice the number of pants/shorts and workout shirts. Try to make them super distinctive....but they have a real mix and again, maybe that's what will work and I'm just wrong.
Anyway, very happy with what I saw. Plenty of men in there, mostly with their gf's/wives and plenty of action at the register. LULU just can't grow quickly enough. I'd glove to see a per store profitability report. Bet not a single one ever loses money. They just need to open them faster....easier said than done, I know.
Heading over to one this morning then two tomorrow, including the new men's store in NYC. Not concerned, though. Perfect cofluence of events with the economy and stock market going up all year and gas prices coming down at the perfect time. More cash for consumers and I'm 100% certain, women will treat themselves to LULU in record numbers this quarter.
Buy this stock.
If the pants are see through, it's because they are being stretched too thin. Just sayin'...not for every body.
People are starting to wake up to the fact the men's line is going to rival the women's sales in short order. So, you have a business on track to double in the US with minimum infrastructure spend in addition to the roll out in Europe and Asia. Sales in both places have been incredibly positive.
If Under Armor is worthy of a 90 PE, this should be even more. The growth, right smack in front of it, is enormous.
Seems like the shorts are still hanging on, I expect great earnings and then a massive short cover spike taking this to $70 by end of December.
Poser, Buss or the crew at the Australian bank will either do an interview or put out a research note trying to knock this down, attributing the move to a short squeeze and not something in the fundamentals.
IMO, it's the reaction of men to the line. What's being disproven is this notion, LULU is for women only. They're going to double their business in the US without even opening another store.
Never fails, just wondering which one of these slimy morons it is this time...
iphone is a good comparison but so is just about anything sold to people. There are tiered brands in almost every category of consumerism and maybe none more than in fashion.
Frankly, LULU's pricing is maybe THE most affordable to attain in any fashion category. $100 while not cheap, is doable for anyone making more than minimum wage.
Cost was never an issue. LULU's big worry is not the current competition, it's a company that comes in and knocks them off the top tier of workout gear. I don't see that company on the horizon. There is nothing but growth in front of this company.