Lululemon drops $10.54 a share in one day despite beating estimates

quote:

---

8 Billion dollar yogo pants company

---

WTF.....short short short short

Looks like their forecast was a bit below analysts expectations which also may figure into the drop.

With the drop, their forward P/E looks more in line with the industry of specialty clothing retailers.

As long as the economy stays up, women will do yoga and wants to wear expensive yoga clothes.

If the economy slows, they will start wearing cheaper brands.

Id buy UA instead any day.

Lulu doesn't really have the potential in other market sectors and they will go out of style, like everything else except super high end shite like Chanel and LV etc.

quote:

---

On top of that, you have UA + others entering the market with quality products cheaper.

---

Not to mention Nike ain't going anywhere and will always have "some" status.

good points on the MK stuff though. That fad died a swift death.

quote:

---

see their logo everywhere and even noticed a good bit of guys wearing it recently... No homo.

---

Because they're not just a "yoga pants" label. I at the "expect analysts" in this thread making profound announcements about the stock and yet simultaneously can't even explain the brand correctly.

quote:

---

Because they're not just a "yoga pants" label. I at the "expect analysts" in this thread making profound announcements about the stock and yet simultaneously can't even explain the brand correctly.

---

I don't really understand what you are trying to say... They sell everything from mens outerwear to luggage on top of yoga pants.

I was simply stating an observation I've noticed about their brand lately, not their stock. I guess all that analysis was pretty profound though.

I don't use it as a holy number. I do use it to do my own valuation analysis, along with other factors

quote:

---

Can people stop using P/E as some holy number. Its pretty stupid to use for growth stocks as earnings hopefully won't be terribly high since they should be spending that money to grow.

---

Is there a comparative metric that you prefer to use for growth companies? Price to sales, maybe?

As long as people use something, and it's a rational, useful metric, I don't think the particular metric(s) is all important. But so much of the time (and not just here), people seem to be relying on gut feel or anecdotals. I try to use a cross section of fundamentals when selecting a longer term investment, including P/E, P/S, dividend history, free cashflow, etc. For trades, it's more about the shorter term technicals.

I might trade LULU. But it pretty well fits what I refer to as the "FFF" (female fashion fad), so I don't have it on any investment watchlists.

quote:

---

Because they're not just a "yoga pants" labe

---

They are a yoga apparel with widespread alternative uses. They are a good company, that generally makes a high quality product and has appeal.

Lulu built a brand based on luxury status symbol. Being a publicly held company is pretty much a death sentence for them since investors love their home run growth stories. Growing into other markets would basically be signing up to be a firing squad target practice.

This is how the Michael Kors/Lulu etc stories work

1-Higher quality trendy product that appeals to upper middle class
2-Becomes status symbol based on quality & scarcity -> Everyone wants one
3-Company goes public based on growing brand
4-Investors drive up price based on previous growth + future growth projections
5-Required growth targets forces company to move into lower socioeconomic demographics
6-Company loses trendiness since everyone has product
7- Stock price drops like a rock



Lululemon cannot compete (at least at this point) with the logistical capabilities of Nike/UA/Addidas etc. So a drive for growth to lose their luxury symbol status would kill the brand