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What Does lululemon's (LULU) Footwear Debut Mean for the Stock?

·5 min read

lululemon athletica inc. LULU has entered the footwear business with the launch of its first sneaker in the women’s running shoe category called “Blissfeel.” The running shoes are engineered to support the movement, with cushioning technology for an effortless and blissful running experience. The shoes are currently launched in 10 colors.

The company’s debut was marked by a media event in New York. Its new women’s shoes will be available online and in some stores across North America and the U.K., starting from Mar 22. The company’s footwear venture will be followed by the launch of three additional styles later this year. The other styles, including Chargefeel, Strongfeel and Restfeel, were also on display at the launch event in Manhattan.

Chargefeel, planned to be launched in summer, is one type of cross-training shoes designed for gym training and short runs. The company also expects to launch Restfeel this summer. The shoes are designed for those who want something easy to slide on post-workout. Moreover, the company expects to launch the Strongfeel in the fall, which is one kind of training shoes designed for multi-directional movement.

lululemon’s entry into the footwear business is the key step in its expansion efforts. The company is known for its innovation in fit, feel and performance. As performance shoes are generally designed for men and then adapted for women, lululemon sees this as an opportunity to provide solutions for women. This is why it started its footwear venture with the women first.

Following the aforementioned rollout in the women’s footwear line, the company plans to enter the men’s footwear business in 2023. This will include some special edition launches and seasonal collections.

What’s More

lululemon has been a pioneer in the athleisure wear business. It has the credit of introducing the concept of leggings to the world. LULU remains optimistic about the innovations it plans to bring to its assortments for both men and women. Management intends to keep investing in strategies to maintain customer footfall, including augmenting its store base and enhancing shopping experiences.

lululemon expects to capture the growing online demand and ensure a robust shopping experience through its accelerated e-commerce investments this year. On the online front, the company is on track with accelerated e-commerce investments, including building transactional omni functionality and increasing fulfillment capabilities. It also continues to remain focused on investments to enhance the in-store experience. It is leveraging its stores to facilitate omni-channel capabilities, including the buy online pick up in store and ship-from-store services.

lululemon is progressing well with its five-year Power of Three plan, which aims at doubling sales in the men’s and digital categories, and quadrupling sales in the international unit by 2023. The five-year plan focuses on three core objectives — product innovation, augmenting omni-guest experiences and market expansion. The company is witnessing positive consumer responses to its merchandise. Going forward, it remains optimistic about the innovations it plans to bring to its assortments for both men and women.

The company delivered an earnings surprise of 21%, on average, in the trailing four quarters. The Zacks Consensus Estimate for LULU’s fiscal 2021 sales and earnings indicates growth of 42.3% and 63.8%, respectively, from the year-ago period’s reported levels. The company currently carries a Zacks Rank #3 (Hold). Although shares of lululemon have lost 4% in a year, it fared better than the industry’s decline of 20.9%.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Stocks to Bet On

We have highlighted some better-ranked stocks from the same industry, namely Columbia Sportswear COLM, Crocs CROX and GIII Apparel Group GIII.

Columbia Sportswear currently sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 203.3%, on average. Shares of COLM have declined 17.5% in the past year.

You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Columbia Sportswear's current financial-year sales suggests growth of 17.7% and that for earnings per share reflects growth of 8.1% from the year-ago period's reported figure. COLM has an expected long-term earnings growth rate of 9%.

Crocs, a Zacks Rank #1 stock, has a trailing four-quarter earnings surprise of 36%, on average. The CROX stock has declined 11.1% in the past year.

The Zacks Consensus Estimate for Crocs’ current financial-year sales and earnings per share suggests growth of 48.6% and 22.1%, respectively, from the year-ago period's reported numbers. CROX has an expected long-term earnings growth rate of 15%.

GIII Apparel currently flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 173.4%, on average. Shares of the company have declined 26.1% in the past year.

The Zacks Consensus Estimate for GIII Apparel’s current financial-year sales and earnings per share suggests growth of 34.2% and 416.7%, respectively, from the year-ago period’s reported figures.


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Columbia Sportswear Company (COLM) : Free Stock Analysis Report

lululemon athletica inc. (LULU) : Free Stock Analysis Report

Crocs, Inc. (CROX) : Free Stock Analysis Report

GIII Apparel Group, LTD. (GIII) : Free Stock Analysis Report

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