LULU - Embedded Expectations Analysis - 2020 12 09
Lululemon Athletica Inc. (LULU:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings with a 67.7x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management appears concerned about the MIRROR acquisition, e-commerce sales, and North American operationsSpecifically, management may lack confidence in their ability to sustain e-commerce sales growth, improve the customer experience, and successfully integrate the MIRROR acquisition. Furthermore, they may have concerns about supply chain issues in the MIRROR business and their digital marketing strategy. Moreover, management may be exaggerating the strength of the overall business, the potential of their omnichannel investments, and the attractiveness of all four sweat activities. Finally, they may be concerned about their North American operations and the impact of safety restrictions on their physical stores
lululemon athletica is a designer, distributor, and retailer of athletic apparel. Co.'s athletic apparel is marketed under the lululemon and ivivva brand names. Co. provides a line of apparel and accessories for women, men and female youth. Co.'s apparel assortment includes items such as pants, shorts, tops, and jackets designed for healthy lifestyle and athletic activities such as yoga, running, training, other sweaty pursuits, and athletic wear for female youth. Co. also provides fitness-related accessories. Co. primarily conducts its business through two channels: company-operated stores and direct to consumer. As of Jan 28 2018, Co. operated 404 stores.
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