lululemon athletica inc. (NASDAQ:LULU)

CAPS Rating: 3 out of 5

The Company is a designer and retailer of technical athletic apparel in North America.


Player Avatar sikiliza (< 20) Submitted: 6/11/2013 10:31:05 AM : Underperform Start Price: $77.92 LULU Score: +19.40

The problem with fads is that they come to an end. Granted, Lululemon targeted an existing and fast growing core market of yoga enthusiasts who were not afraid to talk it up but over time, the company's growth depended more and more on the ordinary lady picking up a pair of well-fitting yoga pants for everyday wear. This might have signaled one of two thing: 1) That the core market was saturated or 2) That the initial allure and exclusivity of the product was now broken.

Product issues aside, management has not been stellar and I see an Aropostale situation brewing where a good company with great products gets distracted by management side-shows.

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