The Lululemon Bull Case, Simplified

This morning, I woke up to find that Lululemon ($LULU) was up more than 10% after guiding higher for the quarter.1  The bull case for the company, and the stock, though is simpler.  It comes from a friend of mine who forwarded me the following email exchange he had with his sister today.  His sister, of course, was completely unaware that $LULU stock was exploding higher.  This is what the emails said, verbatim:

Sister: “What were the name of those pants you told me about that girls are all into and they make every butt look good?!?! :)

Friend: “Lululemon.  The stock is actually up 12.54% today.”

Sister: “That is what I want for my bday!!!! “

And THAT, my friends, is the $LULU bull case, simplified.  As Howard Lindzon told you more than a year ago, “The Facebook of Ladies’ Behinds.”


disclosure:  I currently have no position in $LULU, after selling my stock yesterday for no good reason whatsoever.


1  From the company:

“For the fourth quarter of fiscal 2011, the Company now expects diluted earnings per share to be in the range of $0.47 to $0.49 as compared to its previous guidance range for diluted earnings per share of $0.40 to $0.42. The Company’s improved guidance reflects stronger than anticipated net revenue for the quarter.

The Company now expects net revenue to be in the range of $358 million to $363 million for the fourth quarter of fiscal 2011. This compares to the Company’s previous guidance of net revenue in the range of $327 million to $332 million for the quarter, and compares to net revenue of $245 million for the fourth quarter of fiscal 2010. Comparable-store sales for the fourth quarter of fiscal 2011 are expected to reflect a low-to-mid twenties percentage increase on a constant-dollar basis. This compares to the Company’s previous guidance of low to mid-teens comparable-store sales for the fourth quarter of fiscal 2011.”

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