Listen up haters of greatness, that stock slip in August was just a lil hiccup, see? The Canadian mammoth has only just embarked on its path to greatness! Lululemon has posted its 2008 second quarter profits and boy if they aren’t the fancy pants of the stock market. Q2 Profits more than doubled! (Net Income $11.1 million or 16 cents a share to you stock nerds) Sales in existing stores jumped 13 percent! Revenue jumped 48 percent to $85.5 million!
Wow, American ‘yoga enthusiasts’ must be loaded. And the Canadians have come to collect! With 35 stores opening this year, new hires, discount outlet locations and internet sales starting mid 2009 we’re sure next year’s profits will skyrocket. Buy buy buy!
Wait… wha?…35 stores? 35? Internet sales? Discount Outlets? Time out! Lululemon is the new Starbucks! And it’s no coincidence the new CEO appointed earlier this year is none other than 20-year Starbucks veteran herself, Christine Day.
And yet! The skeptics cry not so fast!
“Unfortunately for its stock this looks like new 52-week lows.” Day Trader Alert at 247WallSt.com, Sept 11.
“Its already battered shares plunged still further on the lowered earnings prediction. The stock has headed almost steadily down since hitting a high of $58 last fall, $40 above its initial public offering price.” The Globe and Mail (Canada), Sept 12.
The 13 percent jump in store sales doesn’t compare to the 30 percent a year earlier. And the $85.5 million revenue was lower than the $86.9 million estimated by analysts.
But you know, who caaaares about money when you’ve got friends! Right Fergis?
Lululemon Rises Most in Six Months After Net Doubles [Bloomberg]
I love you.
Also: To avoid any potential confusion to those that stumble on to my letter, I’ve nothing against yoga. I think it is an extremely healthy positive practice and lifestyle.
However, I am against relentless profiteering predicated on superficial faux-spiritual greeting-card philosophy. Lululemon would hate for its customers to consider that yoga has been practiced for thousands of years without the need for overpriced seamless Lyrca, and occasionally seaweed-infused apparel.
Fergis T. McGillicuddy
PS: In the interest of full disclosure, I do not currently practise yoga as my interests are generally limited to scotch and backgammon.