As I've said before -- they picked up the best locations first. There's an athleta in scarsdale a few minutes away, and the whole yoga moms thing in the suburbs is becoming passe.
We're nearing the end of the secular yoga pants as fashion statement -- you can get lulu-like stuff at lots of places now, and only the hard-core fans are buying.
They pointed out that the sales were strong in stuff bought by older lulu customers, but that new customers weren't buying yoga pants.
Personally, I think that the global fashion trend will change faster than this co can expand internationally, so the earnings estimates 3 years out are highly suspect.
#1) Canada comps were negative. canada is tapped out.
#2) First Q is 1/3rd booked. Black friday was good but the weeks before /since were not.
#3) Christine Day was too tired to bother getting up for the CC (they start at 6 am PST)
#4) existing lulu customers are still buying, but fewer new customers are coming in the door
#5) There are a lot of people 'trying to look like us' in the US
#6) Brand knowledge is zero outside of established market
There are now 68+ athletas, including 3 in NYC. In the Union Square neighborhood, there are now a LULU, an athleta, and a sweaty betty, with a lorna jane on the way.
The market is not infinite, and may be getting saturated.
Price targets got update:
GS +2 (62)
Some crazy broker -20 (100-80)
Several brokers lowered from high 80s to mid-70s.
The overwhelming thought is that these guys just won't be able to put up the numbers next year.
My research via social media is that lulu is less hot among the young, and is upsetting the 'ocean'-type women that are their core; any hiccup in the economy and we could have a CHS situation.
They were +.04 in this quarter, and they estimate -.05 for the year, which means that they lowered estimates by .09 for the remaining 2Qs, That implies a huge slowdown.
It was buckingham research, and their comment was that they'd never seen a valuation like this on a clothing co in 15+ years of covering specialty retail.
Their research report was actually quite good, and I don't think that they were pumping a position.
Good now, but when you are paying a 30+ PE, you are buying the future...
Price to sales is still around 7-10.
They gave a $52 pt yesterday, and they actually predicted something like 36 and 1.94.
Their analysis was that high margin cos attract competition, and that paying high multiples is pointless because in 10 years nobody's edge persists.
They gave the example of Chicos, which had a great CEO, but went from 49-2 and is now at 16; there, as here, the CEO sold everything.
They may, but it is very very rare for a retailer to hit from both sides of the plate.
Growth is slowing, profits dropping, the designers are getting older than 'ocean' and losing touch with her, and most fad clothing stocks get taken out in 3-5 years. ANF and AEO are both worth around 40% of what they were 5 years ago.
Good observation, but leads are rarely 'unassailable' -- look what happened to Henry Ford.
Lulu has momentum, but they're going through a CEO transition, they have to hire a lot of QC people who will detract from earnings, and they really have to quintuple their revenue to grow into their valuation.
It could happen, but I can't think of another case where it has.
Six years ago ANF was killing it, and the stock price was 2 1/2 times more than it is today....
Well... if she thought it was going back to $85 once her replacement is in (and she's no longer required to report her sales), she'd have waited the few months.