Investopedia: Helen Of Troy Plenty Bold, But What About Beautiful?

You have to give credit where it's due and Helen Of Troy (Nasdaq:HELE) management (which means CEO and founder Gerald Rubin) is absolutely willing to take chances to grow this company. Once a licensor of low-price/low-prestige personal care brands, and a maker of fairly low-end consumer care electrics, such as curling irons, Helen of Troy has increasingly built itself into a legitimate player in a variety of personal and houseware products. Although the company's rising debt is likely to magnify what has been a very volatile company to begin with, there looks to be value here for risk-tolerant investors.

A Pretty Good Third Quarter 

Helen Of Troy beat expectations for the fiscal third quarter, a welcome change from a recent "mini-trend." Investors should note, though, that acquired revenue and expenses are still impacting performance and it is often more difficult for analysts to accurately forecast results in that environment. In other words, take the beat with a small grain of salt.

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Investopedia: Waiting For A Clearance Sale On Ulta

As investors in retailers like Talbots (NYSE:TLB) or American Eagle (NYSE:AEO) can easily attest, this is not the easiest environment for retail. Oh true, conditions are better now than a year or two ago, but retailers really need to offer something distinctive in terms of product selection, pricing or shopping experience to draw in the crowds.

To that end, Ulta (Nasdaq:ULTA) seems to have hit on an attractive and differentiated concept - a beauty and personal care superstore format that is competitive on pricing while offering a wide selection and pleasant environment. Like lululemon (Nasdaq:LULU) and its own differentiated products and branding, Ulta is carving out an impressive growth trajectory while many of its rivals are struggling to hold on to what they have.



Keeping up the Momentum in Q1
Ulta's fiscal first quarter showed no slowdown in the company's momentum. Sales were up almost 21% on a reported basis, with same-store sales up more than 11%. There is a decided lack of direct comps to Ulta (one of the positives in the company's thesis), but anecdotal from the likes of Macy's (NYSE:M), Nordstrom (NYSE:JWN) and Kohl's (NYSE:KSS) would suggest that Ulta's performance is quite a bit stronger than the average department store cosmetics counter.


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Investopedia: How Far Can Lululemon Stretch?

By any reasonable standards, lululemon athletica (Nasdaq:LULU) has been a fantastic stock over the past two years. Not only has it tripled in value since its debut, but investors who loaded up on these shares in a big way in early 2009 are also looking at a 10-bagger or better. An investor only needs to hit a couple of those in a lifetime to do very well indeed.

But the big question is whether lululemon can maintain the momentum. Everything looks great for the company today, but grizzled retailing investors have seen stories like lululemon before and unfortunately, many of these stories do not have happy endings. (For background reading, see Analyzing Retail Stocks.)

A Solid End to the Fiscal Year  
For a company with a track record of blowing away estimates, lululemon's fiscal fourth quarter results were surprising only to a certain degree. Revenue jumped 53% and surpassed the top end of the analyst range, helped in large part by comp-store growth of 28%. Direct-to-customer sales growth was also strong (up 152%), but still constitutes a fairly low percentage of sales.

LULU once again coupled strong sales with impressive operating leverage. Gross margin jumped almost five full points, and the company's operating income grew 72%. LULU has exceptional operating margins for the retail sector - they're at 29% (up from just under 26% a year ago) - and the company once again delivered earnings per share well in excess of analyst expectations. (For more insight, see The Bottom Line On Margins.)

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Lululemon Masters The Upward-Profits Pose

I am not aware of a "ring the cash register" pose in yoga, but if there is one, I have no doubt that Lululemon Athletica (Nasdaq:LULU) has mastered it. Combining a healthy living and pro-environment shtick with truly well-designed, well-crafted and well-marketed apparel, Lululemon is carving out a very successful niche in women's athletic apparel market and driving value-centered investors to distraction. 

A Limber Third Quarter
It is a real challenge to find a metric in which Lululemon did not excel in its fiscal third quarter. Revenue jumped almost 56% to $176 million, leaving the highest published estimate in the dust. Likewise, comp-store sales growth of 29% was outstanding and the company produced an eye-popping amount of productivity (nearly $2,000 in sales per gross square foot of selling space, on an annualized basis). Sure, that's less than what, say, Tiffany (NYSE:TIF) does, but they sell diamonds! Compared to other clothing retailers, even solid performers like Urban Outfitters (Nasdaq:URBN) or Limited's (NYSE:LTD) Victoria's Secret cannot come close to that level of performance. 


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