Lululemon (LULU)

In TickerMine's survey of Lululemon stores we found that most shoppers spend over $50 per visit and that a majority of Lululemon store representatives believe that most customers are repeat customers to their store. TickerMine's survey showed that 45% of customers spent $50-$75 per store visit and that 37% spent $75-$125 per store visit. There were no responses below $40 in our survey. When we asked Lululemon store employees what percentage of customers were returning customers 37% chose 50-60%, 29% said 60-75% and 15% of respondents believed that over 75% of store traffic was returning customers. In our survey it was revealed that 54% of respondents believed that tops in general were the top selling item (45% said tank tops) 23% saw pants as the best selling category led specifically by yoga pants. 68% of respondents reported that there were no issues with inventory shortages at their Lululemon location, while 28% did say there were some product shortages. Lululemon respondents also told us that 68% of customers paid full price for clothes most often. 23% of respondents believe that customers generally shop for and purchase the items on sale.

Although highly volitile the stock is now trading near its debut pricing and therefore may be a great time to get back in as it has declined from almost $60.00.

Believe it or not, there are some functions of the consumer slowdown that benefit the company. As large retailers become cash strapped and decide to pull back in their expansion plans, LULU, who enjoys a healthy balance sheet, is able to acquire leases in prime real estate locations that under normal circumstances would be difficult to procure. Management is intensely focused on “seeding” new markets it enters by first driving demand through reaching out to local fitness professionals and gyms to stimulate demand. Once the story has begun to generate buzz, the company then enters the market with full blown stores and usually is successful in rolling out the concept and quickly generating sales.

Once those stores are in place, however, the company is not content to allow them to perform according to the status quo. Same store sales continue to ramp up as both strong merchandising as well as targeted marketing drive repeat and new business to the stores. Last year the comparable store sales were up 34% on a raw basis or 24% when counting currency adjustments (the majority of the company’s sales are still in Canada). While management is guiding comp store sales to grow in the low teens (high single digits adjusted for currency), Williams Brothers expects most guidance numbers to be handily beat as the growth is in the very early stages and should be relatively immune to macro-economic forces.

The company plans to open another 35 stores in North America this year on top of the 81 stores already in place worldwide. While these new stores won’t be included in comp store sales figures, management noted that up to this point, new stores not yet included in this metric have been performing ahead of expectations.^[1]

1. ↑ http://zachstocks.com/2008/04/lululemon-athletica-lulu-staying-focused-has-its-benefits/

Although highly volitile the stock is now trading near its debut pricing and therefore may be a great time to get back in as it has declined from almost $60.00.

With recent management changes we are seeing additions of seasoned retail experience to help the company expand its locations in the US and Asia.

Similar to Under Armour for men you have a high profile athletic clothing manufacturer that targets a female target audience that is involved in fitness and yoga as a desired lifestyle.

Similar to Under Armour for men you have a high profile athletic clothing manufacturer that targets a female target audience that is involved in fitness and yoga as a desired lifestyle.