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Friday, December 7, 2012
Investopedia: lululemon Continues To Deliver High-Priced Performance
"Pay for performance" has long been a mantra on Wall Street, and it's a little harder to condemn athletic apparel maker lululemon athletica (Nasdaq:LULU)
for its valuation when it continues to perform as well as it does. Not
only does the company continue to move truly impressive quantities of
premium-priced merchandise, but the company's cautious inventory and
expansion philosophies mitigate some of the normal retailing risks. All
of that said, investors aren't getting any bargains in these shares.
Read more here:
http://www.investopedia.com/
Read more here:
http://www.investopedia.com/
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Fellow CFA charter holder here. I appreciate your writing style and thank you for the perspective on LULU. I was investigating the stock after a recent shopping trip with my wife where she tried on yoga pants and a yoga jacket that rang up to nearly $200 (for two items!). Aspirational brand is an understatement.
However, like a Tiffany's, Coach, or any other luxury brand the middle-upper and upper income brackets are much better off than the middle and working classes. I think LULU could benefit from the polarization in retail where the top-end and value oriented (TJX, RSOT, DG) retailers put in solid relative performance while middle retailers struggle.
Back to LULU, there's no shortage of desire for their products. In my wife's circle of friends they all say the 'everyday yoga pant' is like second skin. The most comfortable thing they own. The problem is the $80 price tag. Check out how many are being offered on eBay and the response the auctions receive for an indication of buyer desire.
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