| Stock (Symbol) | Stock Price | |
Lululemon Athletica (LULU) |
$65 |
|
| Data is as of | Expected to Report | Sector |
April 8, 2013 |
June 10 |
Retail & Restaurant |
| Sharek’s Take | ||
 Lululemon has inventory issues with its yoga pants. The pants are being recalled because they were too see-though. LULU is growing so fast, it has trouble with its supply chain because it doesn’t have established quality control. So one supplier sent pants in that were too sheer and that affects 17% of LULU’s yoga pants. Profits will be impacted this quarter and next, and LULU stock took a hit on the news, but the stock did not buckle. Long term investors should stick with the stock, and wait for a banner 2014. |
||
| One-Year Chart | ||
 Here’s the one-year chart of LULU. First note the stock gave back but did not cave in — good. Even after the fall, the P/E is still 33. That’s kinda high. That tells me investors aren’t giving up. Estimates for the next two quarters show -6% and -3% profit growth. |
||
| Earnings Table | ||
 Last quarter sales rose 31% and profits increased a healthy 47%. This is a great company, when its not having inventory issues (like now and in 2011).Lululemon beat by a penny last quarter, but its the near future investors are looking at. Annual Profit Estimates dropped around 10%. Quarterly estimates show profit growth will be flat the next two quarters, then pick back up. Growth should be great five and six quarters out do to easy comparisons. |
||
| Fair Value | ||
 I’m taking my Fair Value P/E from 40 to 35. Stock’s not on sale. Wow! |
||
| Ten-Year Chart | ||
 LULU was one of the best stocks to buy during the Bear Market of 2008-2009 (along with Ulta Salon). Expected profit growth of 6% this year is weak but LULU is getting some support at $65. During 2010-2012 sales grew 92%, profits rose a faster 134%. Look for the stock to hig all-time highs next year. |
||
| Power Ranking | Bottom Line | |
Growth Portfolio
14 of 14 |
Lululemon didn’t drop much considering the bad news (which should last two quarters). This stock isn’t on sale, if you don’t own it look to get in on a dip. Long term investors should continue to hold and look to 2014. LULU is ranked 14th in the 14 stock Growth Portfolio Power Rankings. It is not right for the Aggressive Growth Portfolio right now. |
|
Aggressive Growth Portfolio
N/A |
||
