Does My Butt Hold Off Fatty Inward This?
Kid Dynamite summed upwards the illustration for lululemon athletica inc (always spelled inwards stylish lower case) really simply. His sister, together with presumably many other women, idea the wearing clothing build their butt hold off good. I assemble this is non master - Howard Lindzon has besides turned a few selection phrases inwards bullish advertisement of the stock.
I idea this was crass - but for the life of me I can't intend of whatsoever meliorate explanation for the stock price.
Background
lululemon athletica it is a remarkable company. The website describes the production (in lower case) every bit "yoga wearing clothing together with running gear for sweaty workouts" together with it sells its products inwards the 3 fattest nations inwards the the world (USA, Commonwealth of Australia together with Canada). You would intend a specialist yoga together with running wearing clothing retailer inwards those markets would hold out playing to a express audience.
But if you lot idea that you lot would hold out wrong.
lulu had sales of $629 1 thou 1000 for the ix months ended Oct 30. This was upwards nigh 35 portion from terminal year. This is a retailer together with then the quaternary quarter matters. Last twelvemonth they did 245 1 thou 1000 inwards sales inwards that quarter together with this twelvemonth (at a guess) it volition hold out 35 portion higher - say 331 million. Annual sales volition hold out somewhat shy of a billion dollars.
Influenza A virus subtype H5N1 billion dollars inwards sales is a lot of "yoga wearing clothing together with running gear for sweaty workouts". Nike past times contrast does exactly over twenty billion inwards sales but shoes are a much bigger category - together with their marketplace pose is seemingly much wider. After all Nike besides makes shoes for yoga together with running (and my gauge is the shoes should ascendency to a greater extent than gross dollars of margin than the leotards).
Scale together with stock price
Influenza A virus subtype H5N1 billion dollars inwards sales is huge for such a narrow category. But fifty-fifty that is pocket-sized compared to lulu's stock price. You run across lulu marketplace pose cap is straight off almost $10 billion. The stock is priced at 10 times sales. That is amazing for a fashion company. Nike past times comparing has a marketplace pose cap of $46 billion together with a toll to sales ratio of exactly over 2. And Nike is non a sparse margin business. No other vesture companionship comes close.
Here is a nautical chart of Apple's toll to sales ratio:
Apple spent most the fourth dimension at nigh 1 to 3 times sales (currently exactly over 3) together with never exceeded vii times sales.
Apple was never every bit richly valued every bit lulu lemon athletica.
So I desire to play the valuation guessing game.
* What is the value of the terminate marketplace pose for yoga together with running clothes. Is it $5 billion per twelvemonth at which indicate lulu volition hold out priced similar Nike or is it larger or smaller?
* Can you lot explicate the stock toll inwards whatsoever terms other than a play on woman someone vanity? Is Kid Dynamite's explanation of the build appeal together with the stock right?
* Even every bit a play on woman someone vanity is it overpriced?
* What if anything keeps the contest out of yoga clothes?
I would actually similar to know what whatsoever of the large institutional holders are thinking. Maybe their butt looks fantastic but their encephalon looks a picayune suspect.
I accept no position. Shorting woman someone vanity is non something I accept ever done successfully - together with I certain every bit hell would non desire to hold out long this. Besides the entire "it is overpriced" declaration applied 50 portion downwards from here.
John
I idea this was crass - but for the life of me I can't intend of whatsoever meliorate explanation for the stock price.
Background
lululemon athletica it is a remarkable company. The website describes the production (in lower case) every bit "yoga wearing clothing together with running gear for sweaty workouts" together with it sells its products inwards the 3 fattest nations inwards the the world (USA, Commonwealth of Australia together with Canada). You would intend a specialist yoga together with running wearing clothing retailer inwards those markets would hold out playing to a express audience.
But if you lot idea that you lot would hold out wrong.
lulu had sales of $629 1 thou 1000 for the ix months ended Oct 30. This was upwards nigh 35 portion from terminal year. This is a retailer together with then the quaternary quarter matters. Last twelvemonth they did 245 1 thou 1000 inwards sales inwards that quarter together with this twelvemonth (at a guess) it volition hold out 35 portion higher - say 331 million. Annual sales volition hold out somewhat shy of a billion dollars.
Influenza A virus subtype H5N1 billion dollars inwards sales is a lot of "yoga wearing clothing together with running gear for sweaty workouts". Nike past times contrast does exactly over twenty billion inwards sales but shoes are a much bigger category - together with their marketplace pose is seemingly much wider. After all Nike besides makes shoes for yoga together with running (and my gauge is the shoes should ascendency to a greater extent than gross dollars of margin than the leotards).
Scale together with stock price
Influenza A virus subtype H5N1 billion dollars inwards sales is huge for such a narrow category. But fifty-fifty that is pocket-sized compared to lulu's stock price. You run across lulu marketplace pose cap is straight off almost $10 billion. The stock is priced at 10 times sales. That is amazing for a fashion company. Nike past times comparing has a marketplace pose cap of $46 billion together with a toll to sales ratio of exactly over 2. And Nike is non a sparse margin business. No other vesture companionship comes close.
Here is a nautical chart of Apple's toll to sales ratio:
Apple spent most the fourth dimension at nigh 1 to 3 times sales (currently exactly over 3) together with never exceeded vii times sales.
Apple was never every bit richly valued every bit lulu lemon athletica.
So I desire to play the valuation guessing game.
* What is the value of the terminate marketplace pose for yoga together with running clothes. Is it $5 billion per twelvemonth at which indicate lulu volition hold out priced similar Nike or is it larger or smaller?
* Can you lot explicate the stock toll inwards whatsoever terms other than a play on woman someone vanity? Is Kid Dynamite's explanation of the build appeal together with the stock right?
* Even every bit a play on woman someone vanity is it overpriced?
* What if anything keeps the contest out of yoga clothes?
I would actually similar to know what whatsoever of the large institutional holders are thinking. Maybe their butt looks fantastic but their encephalon looks a picayune suspect.
I accept no position. Shorting woman someone vanity is non something I accept ever done successfully - together with I certain every bit hell would non desire to hold out long this. Besides the entire "it is overpriced" declaration applied 50 portion downwards from here.
John
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