I joined 3 dating sites and reviewed over 3000 pictures of women in the 18-42 age range in a variety of geographies
Yoga pants just aren't aspirational any more!
This suggests that pricing power is going to be weaker than expected, and calls into question the validity of the analyst models.
Put simply -- the 35 year old yoga mom may still want to buy it, but she won't be taking her fashion cues from the 27 year old urban consumer, and will probably start paying attention to price.
I've read every analyst report for the last 3 years...
Store productivity in canada is declining slightly -- the market is saturated. They might open one more store,, but they are pretty well tapped out -- they claim they've reached peak productivity.
In the US, store productivity at existing stores is not increasing, and newer stores are both less productive and not increasing in productivity as fast as the old ones. This makes sense-- they picked the good locations first, and a lot of their stores are really just in-fill. NYC's LULU in times square was killing it a few years ago, but now there are 6 as well as three or four Athletas and a few others of that ilk.
So the revenues can go up while the margins go down. As the company's stores are the most productive in clothing retail, as tastes change, store productivity is more likely to go down than up, impacting margins.
Not saying they aren't selling a lot, but the era of 'Ocean' deciding to take up yoga and going out and buying 5 pairs of yoga pants, 8 shirts, a jacket or two and a few $15 hair ties is almost over, because she's already bought the gear.
The argument is that margins will converge due to the introduction of less productive stores, extra incentives, new qc hires, and structural de-leveraging.
Not to mention that most women already have a closet full of yoga pants, and have enough confidence to go out and try cheaper brands.
Finally, the soccer moms are moving away from the luniform, so new sales will be primarily for athletic use.
No-- the real problem (as I've been saying for 2 1/2 years) is that most women now have a closet full of yoga pants, even if they don't do yoga. Even the cult lulu followers have pretty much all the basics in a wide variety of colors, and don't get nearly as excited about the new stuff as they used to.
The technical term is 'saturated' -- Canada is already done, and older markets in the USA are following.
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.