1 / 23

LuLulemon Athletica

LuLulemon Athletica. Created By: Amanda Brunssen, Chris Fleischmann, Sam Heston, Sean Lewis & Haley Muir. Overview. Industry & Description Company Background Annual Earnings, Quarterly Earnings, Stock Performance Economic Overview SWOT Industry Outlook Competitors Leader

dalit
Download Presentation

LuLulemon Athletica

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. LuLulemon Athletica Created By: Amanda Brunssen, Chris Fleischmann, Sam Heston, Sean Lewis & Haley Muir

  2. Overview Industry & Description Company Background Annual Earnings, Quarterly Earnings, Stock Performance Economic Overview SWOT Industry Outlook Competitors Leader Price Estimates & Financial Statement Analysis Shareholder Questions Top Three Reasons to buy this stock

  3. Industry & Description • Industry: Textile- Apparel Clothing • Distributes athletic apparel for women, men and female youth  increased athletics among women • Apparel includes fitness pants, shorts, tops, and jackets for healthy lifestyle activities, such as yoga, running and general fitness • Accessories include bags, socks, underwear, yoga mats, instructional yoga DVDs, and water bottles • 47 stores in Canada, 108 in the US, 18 in Australia and 1 in New Zealand

  4. Company Background • Key managers • CEO- Christine Day • CFO- John Currie • Executive Vice President, Retail Operations North America- Delaney Schweitzer • Executive Vice President, Chief Product Officer- Sheree Waterson • Chairman of the BOD- Dennis Wilson • Competitive Advantage • No long-term debt • Loyal customers • High-quality products • Strong/popular industry • Fast-growing company  brings more popularity • How long have they been around? • Founded: 1998 in Vancouver, Canada • IPO= 2007

  5. Company Background Cont. • What is their market cap? • 10,920,000,000 • How has the stock performed? • Increased by 26% last quarter • Vs. 4-5% by competitors • Any splits coming up? • 2 for 1 on 7/11 • Nothing currently scheduled • Any dividends? • N/A

  6. Annual Earnings

  7. Quarterly Earnings

  8. Stock Performance

  9. Economic Overview • GDP: Growth of 2.3 % in 2012 • Unemployment: Around 8% by ‘13 • Interest rates: little or no increase • Inflation: 2% in ‘12 • Retail sales: 6% growth in ‘12

  10. SWOT Weaknesses Not enough stores for personal selling Limited store locations means more customers have to order online, and aren’t able to fully experience the Lululemon experience. Not diversified Strengths • High quality products and a successful connection with the yoga/fitness community • Higher quality= higher prices= more money • Considered the ‘unofficial sponsor’ of yoga • Yoga class provided by Lululemon shows customers that it fully believes in using yoga as a form of physical activity • Brand loyalty

  11. SWOT Cont. Threats May lose customers to competitors when the economy is down due to high prices Opportunities • Innovation  For example, expansion on men’s line • Expand internationally

  12. Industry Outlook • Spending on yoga currently around 6 billion dollars • Yoga Journal • Niche • Good quality • Brand name • Loyal customers

  13. Competitors • Nike  comparing to Lulu with rates • Nikes market is saturated • Others: • Under Armour • Doesn’t reach out to the yoga market • Doesn’t reach out to women • Women buy more

  14. Why Lululemon is the Leader! • The company has run off nine straight quarters of double-digit sales and earnings growth • It passed $1 billion in annual revenue last year, up from $453 million only two years earlier • Loyal customers

  15. Price Estimates Mean target: 79.63 Median target: 83 High target: 100 Low target: 46 Number of brokers: 16

  16. Financial Ratios

  17. Financial Ratios (continued)

  18. Analysis of Ratios Current Ratio – Helps determine how much is available in cash or near cash items to meet current obligations Quick Ratio – Can the firm meet it’s short term obligations relying on only near cash assets

  19. Analysis of Ratios (continued) Are we generating an adequate return based on sales and total investment?

  20. Analysis of Ratios (continued) Helps assess the firms performance relating our fundamental goal of stock price maximization to internal numbers effected by managerial decisions.

  21. Questions for Shareholder How long do you expect to maintain a 30% yearly sales increase? What are your international expansion plans? From your experiences, does Lulu perform well during economic downtime? How can you compete with other companies who price their yoga pants at lower prices? Do you think some people deter away from Lulu, because of your higher prices? What are some new products coming out? At 58.5 and 10.7 P/E and Price/sales, respectively lulu is considerably high compared to the industry at 25 P/E and 3.0 price/sales. What steps is Lulu taking to bring in more sales and earn more to lower these ratios?

  22. Top Three Reasons to Buy this Stock • Fast-growing stock • 26% last quarter • No long-term debt • Bright future  spending in the retail market is increasing  yoga market is currently at 6 billion • Recommendation  buy, and hold

  23. Sources http://www.kiplinger.com/businessresource/economic_outlook/ Lulu Annual Report http://shop.lululemon.com/home.jsp http://investing.money.msn.com/investments/key-ratios?symbol=lulu&page=FinancialCondition

More Related