Lululemon's Growth Story is Intact...For Now
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- Äas pĆidĂĄn 25. 07. 2024
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After weeks of negative news and a falling stock price, Lululemon (LULU) reported earnings this week andâŠit was actually pretty good. So in this video we go over the results, what the stock price has done since, and analyze Luluâs growth story going forward.
00:00 Lululemonâs Q1 2024 Earnings report
06:55 LULUâs growth outlook
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Matt Derron, awesome video keep up the amazing work
Thanks!
Great analysis Matt! Would you pls look into ULTA. It is trading at 15 times this years earnings
ULTA will be part of my newsletter this Sunday. Not a full analysis like a video but Iâll be talking about it
I had a good thought for you when the results came out đ. And had a good laugh when Joseph Carlson compared Costco $14 joggers to Lulu. Nope, they might look the same, but after a few washes Lulu will win as usual, dupes have been around forever yet Lulu keeps growing for a reason. I don"t own the stock. but I will happily invest in durability, my comfort and your profits đ
I saw the video too. I agree with you. I also donât believe people who buy LULU view dupes as a replacement. Itâs more than just a piece of clothing. But thatâs just my opinion.
Time will tell but I think thereâs a chance it goes the other way where Lulu becomes a bigger part of every day fashionâŠespecially with men. I started in on it because of my wife but I ordered some stuff for me andâŠdamn they are the most comfortable clothes Iâve ever had.
@@mattderron Exactly! When you know, you know đ
Always enjoy the videos
Thanks!
Amazing analysis.
Your integrity (giving due credit at end of video) pays dividends.
Matt, I love your digging of the 9 quarters of guidance vs actually. It's really good part of the management integrity assessment. The management is very creditabe in this case. I saved your chart in my Lulu spreadsheet. Thanks for the specially insights like this one, which I don't find anywhere else.
Thanks! Glad you found that useful. I was halfway through editing it and I was likeâŠeveryone might sleep during this part. I agree with you though. Itâs my way of measuring the management team without knowing them or being there
@@mattderron absoutely! Other ways I assess managements are studying their debt management, and the CEO's stock ownership.
â@@mattderronnot boring at all! Infact it's a great way to gauge management. It's surprising that none of the automated services tracks this metric. Idea for AI project for anybody reading this comment!
Good hustle
Great video Matt! One thing thatâs a bit concerning to me is that LULU didnât open any new stores in China during the qtr which makes me worried the China growth will be lower next qtr and possibly slowing
I don't think it's an issue for now. They just opened 13 new stores in China Mainland last quarter and said they had a plan for 35-40 new stores total this year. With 5-10 being US and the rest being international primarily China. They mentioned they plan to open 14 of those 35-40 net new stores next quarter.
Just goes to show all those âguess squadâ so called analysts have no clue, looking at how Mgt guided and then performed is the way to go Matt! Those analysts should show us their stock portfolio performance every time they provide an opinion:)
That would be great if they did actually
Personally bought in at around $296 of share, 10% of my portfolio. Happy to sit on Lulu for at least the next year and see how things go. I really hope they are buying a ton of their own shares right now. $320 is still cheap imo and a great price point reduce shares outstanding
Totally agree, I missed adding to my position at sub-$300 because I was low on cash, but agree that it's still attractive even now.
Iâm a Lulu share holder but defiantly a little risky but hard to pass up such a discount atm
long lulu baby
Joseph carlson just talked about this and pointed out COST replicating their production to a tee
I saw his video. I have 3 caveats to âreplicating their production to a tee.â 1 - quality as it relates to longevity. Would not be surprised if fabric quality doesnât last or stay as long as LULU but thatâs my assumption. 2 - people donât buy fashion brands just for the âsame style that can be had cheaperâ and 3 - I think LULU is more than just a clothing brand to die hard LULU customers. Itâs a healthy living community and standard.
Obviously this could be wrong but thatâs how I see it. I saw a similar thread on Twitter where everyone was talking about how LULU is dead and I simply think itâs a case where people who arenât in Luluâs core market donât understand how those people see Lulu. ButâŠthatâs just my view đ€·đ»ââïž
@@mattderron 1- good point, yet time will tell
2- agreed, yet i think younger demographics are caring less about brands, i think? Punting on #3. Would love to hear more about how their brand/culture is driving growth and why itll continue/not be replicated
I think itâs more a question of why do people buy a Casio watch vs a Movado watch vs a JLC watch? They all tell time. The Casio is the cheapest but not everyone has utility as their primary criteria. Why does someone buy a JLC over a Rolex? Is it because of the craftsmanship? Is it because they value the name?
So I donât think itâs about âit canât be replicatedâ I think itâs about Luluâs history of quality and innovation in the category along with their brand recognition and general community around their clothing. Not just âthis looks and feels the same and itâs half the priceâ
But again this is just my view of what the attraction is.
@@mattderron good point. Yet, watches have been status symbols for centuries. Yoga pants are still newer. Im bullish LULU but it hasnt made its way into my port
@Austin6403 Ralph Lauren, Burberry, Hermes. Why do people buy these?
My point is, I donât see Lulu as âyoga pantsâ I think Luluâs core customers see it at something bigger and more premium than that
Iâm a NKE shareholder, LULU scares me a bit, they carved out a share of the market that isnât going away anytime soon, and own that female demo that Nike would like to have more of too.
After seeing the table you showed at 5:00, I figured they must have missed analysts guidance (like maybe their own guidance was just so low). Itâs kind of hard to look back in time at that thing, but it sure looks like they have been beating analysts expectations too.
So then why are they down⊠or why were they up last year when they were doing the same exact thing⊠LULU is so confusing to me.
Yeah I donât track analyst guidance even though I will look at it whenever it happens. Mainly because analyst estimates are just thatâŠaggregate estimates of people who arenât part of the company.
Measuring against the companyâs own guidance is a way to evaluate the management team. Could they constantly sandbag to meet their guidance? Sure. But if they issue weak guidance the stock gets punished anyway. So companies that constantly balance giving good enough outlook and then meeting it, to me it shows they can execute đ€·đ»ââïž
Sounds like u agree with him on the color issue because he is parroting management. I am I missing something?
I don't agree or disagree about the issue. I just thought it was funny because his article came out weeks before the earnings call and I thought it was a dumb criticism. Apparently the CEO agrees with him. đ€·đ»ââïž
Market news:
Canada đšđŠ prime lending rate decreased 0.25% this past week; first G7 country this year.
Did not know that, interesting!
@@mattderron .. Also .. NHL (hockey):
My hometown Edmonton Oilers advanced to the Stanley Cup Finals today.
Dallas Stars made it to the Western Conferenceâs Finals; but, lost 4-2 (games) & are out golfing now.
@@mattderron .. European Central Bank also lowered prime lending rates by 0.25% a couple of days ago.
Hockey, what's that? lol j/k
Just so you know, my words taste pretty good
đ itâs just one quarter, will be interesting to see if US sales come back to higher growth next quarter. Otherwise your prediction may still hold true. They did raise EPS guidance though so Iâm assuming they are confident
@@mattderron We shall see. Iâm still pretty Bearish on them. As what I said before, if people are trading down a more essential items as in groceries. Iâm not sure how high priced clothing will stay steady but again we shall see.
Too expensive for me.. Nike is cheaper... Just saying... RL my favorite stock
When you say âtoo expensiveâ are you talking about stock price only? Just asking because LULU is trading for cheaper price multiples than Nike is right now. Nike is a great brand that I like a lot, their company is in a different part of their lifecycle than LULU, their growth rate is going to be slower but obviously thereâs less risk of Nike going out of favor fashion wise than LULU
@@mattderron the pants are expensive. Maybe people will buy cheaper Nikeđ
@@DanPaulBenavides oh lol, touché