Lulu lollies what is the deal? You are NOT getting NAKED ENOUGH!
Alert! Despite being up today, Lululemon stock has received a “distressing” two-star rating! That’s not so good, Al. Just a few months back investors were singing the shiny happy praises of the overpriced yoga outfitter. Oh, but that was such a long time ago, when the sun still remembered how to shine.
Over on CAPS, fully 86 of the 418 members who have rated Lululemon — some 20.5% — believe the stock will underperform the S&P 500 going forward.
“Too far, too fast. At a P/E of +20, Lulu’s faddish characteristics are just too risky to take on. Yoga seems to have peaked, anyway.”
What happened? Was it the announcement of yoga lines at offenders like Eddie Bauer, Athleta/Gap and the lower-ended Old Navy attack? Is competition diluting the trendy yoga money market?
Says proclaimed All-Star trading tipster fmahnke:
“Additionally they had a huge build in inventory (which could lead to future writedowns) and will likely face increased competition from larger competitors offering similar products at a lower price through better developed distribution channels.“
Drat! Hey remember that cah-raazy news about all those Starbucks closings last year? Hope one of Christine Day’s goals was to learn from past coffee breaks. Only in this case, of course, the stimulus (product) is not quite as massively addicting. (btw don’t McDonald’s and Dunkin Donuts offer lattes now? there’s a correlation there, somewhere).