LuLulemon Athletica (US) (LULU-Q)

It is a large company with good products but some styles that are coming back are not their strength. Revenue is slowing down which is not good for any stock trading in the 50X, 40X or 30X range. Revenue guidance dropped in the last quarterly report. He prefers smaller size retailers.

Loves that their CEO just bought $1 million in shares. They will likely tighten their product offering, which is good. Shares are down 38% this year, bottoming last month. LULU offers the best product in their class, better than Nike or Under Armor.

Problem is so much competition in apparel. Nike has similar problems. Would avoid all apparel.

Consumers are fickle and tastes constantly change. Avoids this sector.

He's not a big fan of retail, though this one's the best of its kind. Inventory issues. Good brand and company, great products, executes well. Relatively cheap at these levels. Not a value trap. Has a specific audience, return customers. 

He's definitely looking at it, exciting at these levels. Hiccup with Breezethrough over last couple of weeks, what will inventory write-downs be? EM penetration requires lower margins. Doesn't report until September. Worth doing your homework. Hoping they can right the ship and get back to growth. 

Used to be the hottest thing going. Long-term uptrend looks to be broken. Lows from 2022 are being tested. If it doesn't find support, you could see the much lower lows from 2020. If you already own, it's one of those mug's game stocks.

Looking at the chart, a deep value play. A brand-new addition for her, just picking it up this week. Over the years, she's traded it multiple times and made money. Retail sector has been one of the primary pain points in the last few months, and she sees opportunity. No dividend.

With this one, you have to consider the bigger picture: quality, customer loyalty. 80% of revenue in 2023 from USA, 10% from China, rest globally. Oversold, recession fears have moved to the back burner. Trading at 40% discount to 10-year average. Her price target is $400, a 37% return on a trade from here. High-quality business, challenging macro, story's far from over.

At 20x PE trades lower than Nike. Believes in LULU's management and positioning.

They report next week. They have huge brand awareness, but to be honest this is a tax-loss sale after they report. However, he won't do that yet because they trade at 30x historically and now at 21x. He bought at 27x. He got ahead of this, but won't sell it yet. No doubt there's more competition in this space.

Is down 31% in the last 6 months. Wait till they report before making a move.