Is Lululemon (LULU) stock a good buy?

• Founding: Lululemon Athletica was founded in 1998 by Chip Wilson in Vancouver, Canada, initially as a design studio by day and a yoga studio by night.
• First Store: Opened its first standalone store in Vancouver in 2000, focusing on high-quality yoga apparel.
• Expansion: Quickly expanded throughout North America, building a reputation for stylish, high-performance athletic wear.
• Product Range: Extended its product line beyond yoga wear to include a wide range of athletic apparel and accessories for both men and women.
• IPO: Went public in 2007, listing on NASDAQ under the ticker symbol “LULU.”
• Brand Community: Built a strong brand community through local store events, fitness classes, and ambassador programs, fostering customer loyalty and engagement.
• Innovation: Known for innovative fabric technologies, such as Luon™ and Nulu™, offering superior comfort and performance.
• Global Presence: Expanded internationally, opening stores in key markets across Europe, Asia, and Australia.
• E-Commerce Growth: Invested heavily in its online presence, growing its e-commerce platform to complement its physical stores.
• Acquisitions: Acquired Mirror, a home fitness company, in 2020 to enter the connected fitness market.
• Sustainability Efforts: Committed to sustainability with initiatives focused on responsible sourcing, reducing environmental impact, and promoting wellness.
• Market Leadership: Established itself as a leading brand in the athleisure market, competing with major global athletic brands.

Lululemon’s history showcases rapid growth, innovation, and a strong community focus, making it a prominent player in the athletic apparel industry.

2. MOS (Margin Of Safety)

When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.

• Summary: Watch
• Score: 95
• MOS: 1%

To see the most up-to-date Summary, Score, and MOS, please log into Tykr.

3. Meaning

When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.

Here is how Lululemon makes money:

• Retail Sales: Generates revenue from selling athletic apparel, footwear, and accessories in its physical stores and online.
• E-Commerce: Makes money through online sales from its website and mobile app, offering convenience and a wide product range.
• Product Diversification: Earns from various product lines, including yoga wear, running apparel, and everyday casual wear.
• International Sales: Profits from international markets as the company expands its presence in countries outside North America.
• Subscription Services: Generates income from its membership program, which offers exclusive access and perks to loyal customers.
• Collaborations and Limited Editions: Earns from special collections and limited-edition releases in collaboration with designers and influencers.
• Retail Partnerships: Profits from collaborations with retailers and boutiques that carry Lululemon products.

Here are a few of the other companies that Lululemon has acquired over the years. This is important because a company will use a “Buy before build” philosophy to go to market faster and add additional streams of revenue. A company with more revenue streams has a more stable business model. Keep in mind, that most companies don’t build new software because it takes too long to go to market and generate revenue.