Lululemon Athletica (NASDAQ:LULU) has been around for 20 years now and continues to find a path for growth. LULU is the very definition of the word “athleisure” which has become a common term for the form-fitting yoga clothes that have become de rigeur for a growing swath of millennial women and soccer moms.
Recently, Lululemon founder and former chairman Chip Wilson was on CNBC discussing the company’s pioneering move into this new space and how he did not accept that the brand he build represents athleisure. He thinks it gives the impression that the brand was about leisure clothes that looked athletic, rather than athletic clothes that had style. He said he preferred the term, “technical apparel.”
While that may be his preference, it’s likely athleisure will continue, and ultimately, given the kind of success the brand continues to have, the terminology won’t matter much to investors.
LULU stock is up a whopping 140% in the past 12 months and 82% year to date. And many of the analysts covering the company continue to upgrade the stock as they look to upcoming quarters. 18 of 35 analysts currently call it a buy, compared to 15 of 35 three months ago.
Part of this is due to the fact that the consumer is back in the U.S. That means LULU is seeing its regular customer base buying more stuff and its aspiring customer base having enough to splurge on an occasional piece of clothing now.
What’s more, it’s also opening up new lines in dance-inspired activewear and new sports bras. There’s also its new line of “Zoned In” tights that are gaining significant critical praise for runners, yogis and couch potatoes alike. And, there’s also talk of expanding the men’s line of lululemon clothing.
Remember, these clothes aren’t cheap — sports bras start at around $60 and go up to over $100. And retail for its pants are around $100 or more. But the thing about LULU products seem to be that they’re worth the price.
Holiday Positives for LULU Stock
Another bullish sign that’s working in LULU’s favor is the fact that we’re heading into the holiday season.
These are ideal gift-giving items that straddle the line between luxury and necessity. While an off-brand pair of tights might not elicit a great deal of enthusiasm as a gift, a pair of high-end lululemon tights will get a totally different reaction from your recipient.
A strong economy and a holiday season … the combination is very bullish indeed for premium retailers like LULU.
And if there’s anything Lululemon shoppers like, it’s a sale. But this sale is on LULU stock. In the past month, LULU is off about 7.5%, which makes this a good time to step in. Any break in its run is a smart time to accumulate shares.
Louis Navellier is a renowned growth investor. He is the editor of four investing newsletters: Growth Investor, Breakthrough Stocks, Accelerated Profits and Platinum Growth. His most popular service, Growth Investor, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.