| Stock (Symbol) | Stock Price | |
Lululemon Athletica (LULU) |
$48 |
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| Data is as of | Expected to Report | Sector |
October 4, 2011 |
Dec 12 |
Retail & Restaurant |
| Sharek’s Take | ||
 Lululemon is done selling out, prepare for profit margins to fall to more normal levels. Lululemon had been selling out of inventory this year, with empty shelves in stores. Of course this mean they sold things without having to discount. But the combination of inventory getting back to normal levels and the company spending to grow Internationally (LULU is based in Canada) will certainly bring margins back down to normal. This is fine, don’t worry. The upside is LULU won’t have to pay extra for faster shipping to stock shelves.Same store-sales rose 20% last quarter, which is awesome and will keep LULU stock timely. Same-store sales were up 30% in the U.S. and Australia. Canada is more saturated, and same-store sales were up in the single-digits. Also, online sales jumped 93% last quarter. LULU used to outsource its online store, and started doing it themselves just-before last quarter. |
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| One-Year Chart | ||
 LULU is building a new base now — this is a healthy chart pattern. The estimated Long Term Growth Rate of 26% is very high. LULU is selling for 32 times 2012 estimates.Quarterly profit growth (bottom) has been great during the past four quarters. Estimates show solid growth the next two quarters, and LULU has a history of beating the street. This chart is all-green except for the P/E of 41, which is about right. |
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| Earnings Table | ||
 Profits jumped 73% last quarter. Profit growth has been great since the third quarter of 2009. Revenue rose 39% last quarter.LULU has a history of upping estimates then beating them. I think this trend should continue.
Annual Profit Estimates have climbed considerably during the last four quarters, through the rate of increased was stronger 3QtrsAgo. Quarterly estimates show average profit growth of 32% the next four quarters. These estimates are climbing too. |
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| Fair Value | ||
 I had to overpay for LULU, since its a top-growth stock. LULU is selling for around fair value now, upside is good a year out. |
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| Ten-Year Chart | ||
 We should have purchased LULU in 2009. The stock bottomed in 3/09 when 2009 estimates were $0.56 and 2010’s were $0.48. By July 2009, 2010 estimates had risen to $0.60.LULU’s on a nice pullback right now. I think this correction has been healthy for the long-term outlook of the stock. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
6 of 21 |
Lululemon is clicking on all cylinders. Same-store sales of more than 10% is the most important statistic for a leading retail stock. LULU’s same-store sales are double that. Also, Internet sales just doubled. LULU is a top growth stock. LULU is ranked 6th in the 21 stock Growth Portfolio Power Rankings and 8th in the 12th stock Aggressive Growth Portfolio Power Rankings. |
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Aggressive Growth Portfolio
8 of 12 |
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