First, as a long time investor of LULU and a big fan of LULU management, I strongly believe this recall is a ruse to "mask" the slower than expected sales growth ahead. There's something fishy about this story that does not pass my smell test.
I've done some channel checking with members at my local gyms. I don't want to go into details but to make the long story short, these die hard LULU fans LIKE these yoga pants just they way they are. In fact, they thought the slightly see through material was meant to make the fabric more "breathable". The quality of the material has been consistent. I had asked how long they have owned the yoga pants. Most said anywhere from 1-5 months ago.
My conclusion is that it isn't the material that require recall. I think Ms Day is really trying to mask the slow growth. Using a recall notice is a smart way to divert the attention away from slower growth. I'm not buying into this shenanigans. It's amazing that some ANAL-ysts aren't catching this....
So, when there is smoke, there is fire somewhere. We'll know more 4-6 months down the road if I"m correct.
Regardless of the supply constraint for lulu pants, sales demand is diverging from supply. LULU may have shipped everything via air freight for supply recovery, unfortunately, sales are not there to support the inventory.
Channel checks clearly show that traffic has slowed.
Recall makes it sound worst. However, with clever marketing, they can spin it to make it sound positive (as if they are pro consumer and looking for our best interests). It's like using reverse psychology.
The underlining principles of the company's growth still remains "sketchy"....however way they spin it. Two years of hyper growth have finally caught up to them. Either poor quality or they can't maintain this growth projections going forward. Pick your poison!
Fact is, in Q4 LULU had one extra selling week. Fact is, in Q4 LULU had favor tax rate. Other than, LULU barely squeak by with the beat..... It's looking tougher and tougher going forward.
Just imagine with the additional quality checkpoints, that just make their supply chain that much HARDER to get products out the door....FAST!! But then, with their bloated inventory, that would help cushion the inventory shortages. Either way, I see trouble ahead
Have you noticed in their website under the section, "We Made Too Much"? There are 30 items for women and 17 items for men in the We Made Too Much". I don't think I have seen this many before. Will Ms Day be writing off the bloated inventory and disguise it as quality problem with their yoga pants? No one will ever know....
Noticed how Samsung's new S4 is just a rehash of S3? You know why? They stopped innovating (err copying) because they don't anything else to copy from iPhone.
The ONLY product differentiator between S3/4 and iPhone 5 is the screen size. If that's the case, AAPL can rest easy. Imagine if Cook decided to release bigger screen size (which I'm sure he will). APPL will have instantly captured 75% of the larger size screen market share. Yes. It's that easy!
It's #$%$ me off that TSL is ripping upward while YGE is lagging. I own both. However, the last time TSL traded at $5.40, YGE was trading at $3. YGE has a lot of ground to make up!
Mainly to push LULU above $76 resistance (strictly TA). Upgrade from Neutral to a BUY. Really...?!! Dont you think ANAL-yst should be upgrading once they receive confirmation from the earnings report?
Market is way overbought (not just LULU). This is how bubbles are made...
When trading, I can care less about debt. Rising tides lift all boats. It's just a matter which horse is the winning horse.
Good to see you. It's been a long time!
The fact that LULU will not release their earnings till next week (very late in the cycle), is telling me that Ms Day is holding out as long as possible to see what Q1 revenues will do. We are well into the second month for Q1. I don't think LULU has ever waited this long just to release Q4 earnings. Something doesn't seem right.... Remember, last year LULU saw SIGNIFICANT growth in Q4'11 and Q1'12. It's tough to beat on those metrics again.
Lastly, I noticed a lot of clothing retailers have been discounting 30-40% in the last few weeks. I know LULU does not discount but at some point Athleta will take a small bite out of LULU's growth. Also, I do noticed women in my gym are wearing Athleta more frequently than I have ever seen. I live in Orange County, CA....home of trend setters.
I was long on LULU but got out at $75. I knew LULU would just cycle through the channels. I think the next leg will be down. JMO.
That's my bet. Been bullish on LULU forever. Now, time to flip the switch and go the other way.
Patience is the key. Once it breaks the $60 support, you can kiss LULU good bye. This stock is only held up because of triple witching. MM want to print $65 before tanking the stock later.