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2021-09-28

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Is Lululemon Stock A Buy Or Sell After Q2 Earnings? Key Risk Is Lower-Than-Expected Profitability<blockquote>Lululemon 股票在第二季度财报公布后是买入还是卖出？主要风险是盈利能力低于预期</blockquote>

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Key Risk Is Lower-Than-Expected Profitability<blockquote>Lululemon 股票在第二季度财报公布后是买入还是卖出？主要风险是盈利能力低于预期</blockquote>","url":"https://stock-news.laohu8.com/highlight/detail?id=1139296336","media":"Seeking Alpha","summary":"Summary\n\nLululemon's share price has done much better than the key benchmark stock indices in the pa","content":"Summary<blockquote>总结</blockquote> <ul> <li>Lululemon's share price has done much better than the key benchmark stock indices in the past few months, as a result of better-than-expected financial performance in 1H 2021.</li> <li>LULU achieved strong top line and bottom line growth in Q2 2021 which also beat market expectations, but lower-than-expected profitability for the company going forward is a key downside risk.</li> <li>I see Lululemon stock as Hold after Q2 earnings, as its valuations are expensive, and an earnings miss in the future could de-rate its shares.</li> </ul> <img src=\"https://static.tigerbbs.com/4c5831fd8e2c9cd8844c973c0f757a56\" tg-width=\"1536\" tg-height=\"1022\" width=\"100%\" height=\"auto\">jentakespictures/iStock Editorial via Getty Images<blockquote><ul><li>由于 2021 年上半年的财务业绩好于预期，Lululemon 的股价在过去几个月中表现远好于主要基准股指。</li><li>LULU在2021年第二季度实现了强劲的营收和利润增长，也超出了市场预期，但公司未来的盈利能力低于预期是一个关键的下行风险。</li><li>我认为 Lululemon 股票在第二季度财报公布后持有，因为其估值昂贵，而且未来盈利失败可能会降低其股价。</li></ul>jentakespictures/iStock 社论来自 Getty Images</blockquote> Elevator Pitch<blockquote>电梯俯仰</blockquote> I assign a Neutral rating to Lululemon Athletica Inc (LULU).<blockquote>我对 Lululemon Athletica Inc (LULU) 给予中性评级。</blockquote> Lululemon has delivered significant stock price outperformance as compared to the major benchmark stock indices in the last couple of months, and the stock's current valuations are not that appealing following its recent share price run. Larger-than-expected investments in the near future, an unfavorable sales mix with the introduction of new footwear products next year, and potential supply chain disruptions could be a potential drag on LULU's forward earnings.<blockquote>与过去几个月的主要基准股票指数相比，Lululemon 的股价表现显着优于主要基准股票指数，而且在最近的股价上涨之后，该股目前的估值并不那么有吸引力。近期投资超出预期、明年推出新鞋产品带来的不利销售组合以及潜在的供应链中断可能会拖累 LULU 的未来盈利。</blockquote> My rating for Lululemon is a Hold or Neutral. On one hand, I am positive on LULU's better-than-expected Q2 results and its long-term growth prospects. On the flip side, LULU's premium valuations and recent share price run have priced in the near-term positives for the company, while there are downside risks relating to its future earnings outlook.<blockquote>我对Lululemon的评级是持有或中性。一方面，我对露露好于预期的第二季度业绩及其长期增长前景持乐观态度。另一方面，LULU 的溢价估值和近期股价上涨为该公司的近期利好奠定了基础，而其未来盈利前景则存在下行风险。</blockquote> Company Description<blockquote>公司简介</blockquote> In its press releases, Lululemon Athletica Inc&nbsp;refers to itself&nbsp;as \"a healthy lifestyle inspired athletic apparel company for yoga, running, training, and most other sweaty pursuits\". LULU was established in&nbsp;1998, and the company's shares were listed on the Nasdaq in&nbsp;2007.<blockquote>在其新闻稿中，Lululemon Athletica Inc.将自己称为“一家受健康生活方式启发的运动服装公司，用于瑜伽、跑步、训练和大多数其他汗流浃背的追求”。露露成立于1998年，公司股票于2007年在纳斯达克上市。</blockquote> As of August 1, 2021, Lululemon boasted a network of&nbsp;534 storesthat are located in 17 different markets. LULU generated&nbsp;69%, 14% and 17%of the company's revenue from the US, Canada and international markets, respectively in the first half of FY 2021. The company-operated stores, the direct-to-consumer business, and others contributed&nbsp;46%, 43% and 11%&nbsp;of its 1H 2021 sales, respectively. In the company's most recent 10-Q filing, Lululemon Athletica&nbsp;defines&nbsp;the others business segment as \"outlets, temporary locations, sales to wholesale accounts, license and supply arrangements, and&nbsp;MIRROR&nbsp;(home gym business acquired in2020).\"<blockquote>截至2021年8月1日，Lululemon拥有534家商店，分布在17个不同的市场。2021财年上半年，LULU 69%、14%和17%的收入分别来自美国、加拿大和国际市场。该公司运营的商店、直接面向消费者的业务和其他业务分别贡献了 2021 年上半年销售额的 46%、43% 和 11%。在该公司最新的 10-Q 文件中，Lululemon Athletica 将其他业务部门定义为“商店、临时地点、批发客户销售、许可和供应安排以及镜子（2020 年收购的家庭健身房业务）”。</blockquote> Lululemon Stock Price<blockquote>Lululemon 股价</blockquote> Lululemon's stock price increased by&nbsp;+20.4%&nbsp;and&nbsp;+32.8%&nbsp;in the year-to-date and past one-year time periods, respectively which tracked the performance of the S&amp;P 500 and the Nasdaq Composite&nbsp;very closely. However, LULU started to outperform the key benchmark stock indices in the last couple of months. In the past six months, Lululemon's share price rose by+33.3%, while the Nasdaq Composite and S&amp;P 500 were only up in the low-teens percentages over the same period. In the last three months, LULU's shares went up by +25.0%, as compared to the&nbsp;+7.7% and +5.5%&nbsp;increases for the Nasdaq Composite and S&amp;P 500, respectively during the same time.<blockquote>Lululemon的股价在今年迄今和过去一年期间分别上涨了+20.4%和+32.8%，这与标普500和纳斯达克综合指数的表现非常密切。然而，在过去几个月里，LULU 的表现开始优于主要基准股票指数。在过去的六个月里，Lululemon的股价上涨了+33.3%，而同期纳斯达克综合指数和标普500指数的涨幅仅为百分之几。在过去三个月中，露露的股价上涨了+25.0%，而同期纳斯达克综合指数和标普500指数分别上涨了+7.7%和+5.5%。</blockquote> LULU's earnings beat for both the&nbsp;first&nbsp;and&nbsp;second&nbsp;quarter of 2021 clearly helped to drive the company's recent strong stock price performance. More significantly, Lululemon Athletica's above-expectations financial performance in the first half of this year implies that the company has structural growth drivers working in its favor, instead of merely being a beneficiary of one-off Work-From-Home or WFH tailwinds during the peak of COVID-19.<blockquote>LULU 2021 年第一季度和第二季度的盈利超出预期显然有助于推动该公司近期强劲的股价表现。更重要的是，Lululemon Athletica 今年上半年超出预期的财务业绩意味着该公司拥有对其有利的结构性增长动力，而不仅仅是一次性在家工作或 WFH 顺风的受益者。 COVID-19 高峰期。</blockquote> At its recent second-quarter results briefing, Lululemon&nbsp;noted&nbsp;that \"the pandemic drove forward, accelerated some of the guest behaviors that play to the strength of our brand\" which included \"general fitness awareness\", \"being well, living well\" and \"the importance of functional apparel\". The company also&nbsp;emphasized&nbsp;that its \"brand is early innings across product with activities where we focus on\" and \"gaining market share across categories\".<blockquote>在最近的第二季度业绩发布会上，Lululemon 指出，“疫情推动了一些客人行为的发展，加速了我们品牌的优势”，其中包括“一般健身意识”、“身体健康，生活美好”和“功能性服装的重要性”。该公司还强调，其“品牌是我们重点关注的跨产品活动的早期阶段”和“获得跨类别的市场份额”。</blockquote> Separately, it is critical to examine if whether Lululemon's recent share price outperformance makes it less attractive as a potential investment candidate in terms of valuations.<blockquote>另外，至关重要的是要研究 Lululemon 最近的股价表现是否会降低其作为潜在投资候选者在估值方面的吸引力。</blockquote> Peer Valuation Comparison For LULU<blockquote>LULU 的同行估值比较</blockquote> <table> <tbody> <tr> <td>Stock</td> <td>Consensus Current Fiscal Year Normalized P/E Multiple</td> <td>Consensus Forward One Fiscal Year Normalized P/E Multiple</td> <td>Consensus Current Fiscal Year Revenue Growth Metric</td> <td>Consensus Forward One Fiscal Year Revenue Growth Metric</td> <td>Consensus Current Fiscal Year ROE Metric</td> <td>Consensus Forward One Fiscal Year ROE Metric</td> </tr> <tr> <td>Lululemon</td> <td>56.0</td> <td>47.1</td> <td>+41.6%</td> <td>+15.0%</td> <td>33.4%</td> <td>34.8%</td> </tr> <tr> <td>Canada Goose Holdings Inc. (GOOS)</td> <td>40.8</td> <td>26.8</td> <td>+21.7%</td> <td>+18.2%</td> <td>18.7%</td> <td>21.3%</td> </tr> <tr> <td>Under Armour, Inc. (UAA)</td> <td>38.7</td> <td>34.0</td> <td>+23.0%</td> <td>+5.3%</td> <td>13.4%</td> <td>14.8%</td> </tr> <tr> <td>NIKE, Inc. (NKE)</td> <td>37.2</td> <td>31.5</td> <td>+12.4%</td> <td>+10.0%</td> <td>47.1%</td> <td>47.6%</td> </tr> <tr> <td>adidas AG (OTCQX:ADDYY) (OTCQX:ADDDF) [ADS:GR]</td> <td>38.8</td> <td>29.0</td> <td>+10.6%</td> <td>+12.1%</td> <td>22.5%</td> <td>25.2%</td> </tr> </tbody> </table> Source: S&amp;P Capital IQ<blockquote><table><tbody><tr><td>股票</td><td>共识本财政年度标准化市盈率倍数</td><td>共识远期一个财政年度标准化市盈率倍数</td><td>本财年共识收入增长指标</td><td>共识展望一个财年收入增长指标</td><td>当前财年共识 ROE 指标</td><td>共识 Forward 一个财年 ROE 指标</td></tr><tr><td>露露柠檬</td><td>56.0</td><td>47.1</td><td>+41.6%</td><td>+15.0%</td><td>33.4%</td><td>34.8%</td></tr><tr><td>加拿大鹅控股公司 (GOOS)</td><td>40.8</td><td>26.8</td><td>+21.7%</td><td>+18.2%</td><td>18.7%</td><td>21.3%</td></tr><tr><td>安德玛公司 (UAA)</td><td>38.7</td><td>34.0</td><td>+23.0%</td><td>+5.3%</td><td>13.4%</td><td>14.8%</td></tr><tr><td>耐克公司 (NKE)</td><td>37.2</td><td>31.5</td><td>+12.4%</td><td>+10.0%</td><td>47.1%</td><td>47.6%</td></tr><tr><td>阿迪达斯股份公司 (OTCQX:ADDYY) (OTCQX:ADDDF) [ADS:GR]</td><td>38.8</td><td>29.0</td><td>+10.6%</td><td>+12.1%</td><td>22.5%</td><td>25.2%</td></tr></tbody></table>资料来源：标准普尔资本智商</blockquote> As per the peer comparison table presented above, Lululemon is valued by the market at a significant premium to the company's listed peers with respect to forward P/E valuation metrics. LULU does boast superior revenue growth prospects as compared to all of its peers, while its forecasted ROEs are higher than the majority of its peers as well. As such, Lululemon does deserve to trade at higher P/E multiples than that of its peers, but the stock's lofty valuations are not very attractive on an absolute basis if one wants to consider it as an investment candidate.<blockquote>根据上述同行比较表，就远期市盈率估值指标而言，市场对 Lululemon 的估值高于该公司的上市同行。与所有同行相比，LULU 确实拥有优越的收入增长前景，同时其预测的净资产收益率也高于大多数同行。因此，Lululemon 确实值得以高于同行的市盈率进行交易，但如果要将其视为投资候选者，该股的高估值绝对不是很有吸引力。</blockquote> LULU Stock Earnings<blockquote>露露股票收益</blockquote> LULU reported its&nbsp;Q2 2021 earnings&nbsp;on&nbsp;September 8, 2021&nbsp;after trading hours, and the company's stock price jumped by +11% the next day, from $380.85 to $420.71. It is clear that the market is very satisfied with Lululemon's recent quarterly financial performance.<blockquote>LULU 于 2021 年 9 月 8 日交易时段后公布了 2021 年第二季度收益，该公司股价第二天上涨 11%，从 380.85 美元上涨至 420.71 美元。显然，市场对Lululemon近期的季度财务表现非常满意。</blockquote> LULU's top line expanded by +61% YoY from $903 million in Q2 2020 to&nbsp;$1,451 million&nbsp;in Q2 2021, while its non-GAAP adjusted earnings per share increased by +123% YoY from $0.74 to$1.65over the same period. Notably, Lululemon's revenue and earnings per share were+9% and +39%&nbsp;higher than the market consensus' forecasts, respectively based on S&amp;P Capital IQ data. As I highlighted in the preceding section with reference to the management's comments, athleisure continues to see strong demand, and Lululemon is a key beneficiary as the leading brand in this segment, which explains the company's good quarterly financial results.<blockquote>LULU 的营收同比增长 +61%，从 2020 年第二季度的 9.03 亿美元增至 2021 年第二季度的 14.51 亿美元，而同期的非 GAAP 调整后每股收益同比增长 +123%，从 0.74 美元增至 1.65 美元。值得注意的是，根据标准普尔资本智商数据，Lululemon 的收入和每股收益分别比市场普遍预测高出 +9% 和 +39%。正如我在上一节中参考管理层的评论所强调的，athleisure 的需求继续强劲，而 Lululemon 作为该细分市场的领先品牌是主要受益者，这解释了该公司良好的季度财务业绩。</blockquote> Specifically, the excellent performance of Lululemon's international and e-commerce businesses in the recent quarter is noteworthy. LULU's revenue from international markets grew by&nbsp;+49%&nbsp;YoY in Q2 2021, and this was equivalent to a two-year CAGR of&nbsp;+43%. Lululemon&nbsp;highlighted&nbsp;at the company's Q2 earnings call that \"our international business is ahead of the four times growth (revenue target) we put out to be completed by the end of 2023.\"<blockquote>具体来说，Lululemon国际和电子商务业务在最近一个季度的出色表现值得注意。2021 年第二季度，LULU 来自国际市场的收入同比增长 +49%，相当于两年复合年增长率 +43%。Lululemon 在公司第二季度财报看涨期权上强调，“我们的国际业务领先于我们设定的到 2023 年底完成的四倍增长（收入目标）。”</blockquote> On the other hand, LULU's e-commerce sales still increased by+4%YoY (adjusted for foreign exchange effects) in Q2 2021, despite an exceptionally high base in Q2 2020 (+157% YoY e-commerce sales growth). This translates to a two-year e-commerce sales CAGR of approximately&nbsp;+66%. Lululemonrevealedthat it is implementing new initiatives to further drive the growth of its e-commerce business, which includes \"expanding our alternative payment methods, improved storytelling, more predictive search and a more seamless checkout.\"<blockquote>另一方面，尽管2020年Q2的基数异常高（电子商务销售额同比增长+157%），但LULU的电子商务销售额在2021年Q2仍同比增长+4%（经外汇影响调整）。这意味着两年的电子商务销售CAGR约为+66%。Lululemon透露，它正在实施新举措，以进一步推动其电子商务业务的增长，其中包括“扩大我们的替代支付方式、改进讲故事、更具预测性的搜索和更无缝的结账。”</blockquote> Moving ahead, Lululemon is&nbsp;guiding for&nbsp;$6.19-$6.26 billion in revenue and $7.38-$7.48 in earnings per share for full-year fiscal 2021. This is aligned with Wall Street analysts' consensus top line and bottom line of $6.233 billion and $7.48, which translate to YoY growth rates of +41.6% and +59.2%, respectively as per S&amp;P Capital IQ data.<blockquote>展望未来，Lululemon 预计 2021 财年全年营收为 6.19-62.6 亿美元，每股收益为 7.38-7.48 美元。根据 S&amp;P Capital IQ 数据，这与华尔街分析师一致的营收和利润 62.33 亿美元和 7.48 美元一致，这意味着同比增长率分别为 +41.6% 和 +59.2%。</blockquote> However, there is a real risk that the company disappoints on profitability in the coming quarters.<blockquote>然而，该公司未来几个季度的盈利能力确实存在令人失望的风险。</blockquote> Firstly, Lululemon's future investments could be larger than expected. The company&nbsp;guided&nbsp;at its recent results call for FY 2021 SG&amp;A (Selling, General &amp; Administrative) \"deleverage of 10 to 30 basis points versus 2020\" and an increase in capital expenditures this year. LULU&nbsp;attributed&nbsp;this to \"our investment in MIRROR (highlighted in \"Company Description\" section) brand building\", \"MIRROR shop-in-shops\" and \"increased investment in our supply chain, digital capabilities, new store openings and renovations.\" It is not unusual for actual investments to turn out to be greater than what companies budget for.<blockquote>首先，Lululemon未来的投资可能会比预期更大。该公司在最近公布的 2021 财年 SG&amp;A（销售、一般和行政）业绩看涨期权中指出，“与 2020 年相比，去杠杆化 10 至 30 个基点”，并增加今年的资本支出。LULU 将此归因于“我们对 MIRROR（在“公司描述”部分突出显示）品牌建设的投资”、“MIRROR 店中店”以及“对供应链、数字化能力、新店开业和翻新的投资增加”。实际投资大于公司预算的情况并不少见。</blockquote> Secondly, LULU's introduction of footwear products in 2022 could be negative for the company's overall gross profit margin. At its 1Q 2021 earnings call in June 2021, Lululemon&nbsp;mentioned&nbsp;that \"we are bringing footwear next year.\" As a new product line which will begin with relatively lower volume, footwear products are likely to have lower gross profit margins than LULU's existing core products. In other words, Lululemon's sales mix could be less favorable next year, and this could translate to lower gross margins for the company as a whole.<blockquote>其次，露露2022年推出鞋类产品可能会对公司整体毛利率产生负面影响。Lululemon 在 2021 年 6 月举行的 2021 年第一季度盈利看涨期权上提到，“我们明年将推出鞋类。”作为一个产量相对较低的新产品线，鞋类产品的毛利率可能低于露露现有的核心产品。换句话说，Lululemon 明年的销售组合可能会不太有利，这可能会导致公司整体毛利率下降。</blockquote> Thirdly, lock-downs in Vietnam relating to COVID-19 could have an adverse impact on the company's business operations. Lululemon&nbsp;acknowledged&nbsp;at its Q2 2021 results briefing that the Vietnam production disruption \"is currently impacting approximately 20% of our second half inventory\", with the country accounting for \"30% of our finished goods.\" A September 13, 2021&nbsp;Seeking Alpha&nbsp;news article&nbsp;quoted research from&nbsp;BTIG&nbsp;which mentioned that there are \"supply risks in the apparel and footwear sector as the negative impact of Vietnam factory closures becomes clearer.\" LULU's current full-year guidance is based onthe assumptionthat Southern Vietnam commences its re-opening process this month, and if that does not happen, Lululemon's financial numbers in the subsequent quarters could potentially come in below expectations.<blockquote>第三，越南与COVID-19相关的封锁可能会对本公司的业务运营产生不利影响。Lululemon 在 2021 年第二季度业绩简报中承认，越南生产中断“目前影响了我们下半年库存的约 20%”，该国占“我们成品的 30%”。2021年9月13日寻求阿尔法新闻文章引用了来自BTIG其中提到，“随着越南工厂关闭的负面影响变得更加明显，服装和鞋类行业存在供应风险。”LULU 目前的全年指引是基于南越将于本月开始重新开放的假设，如果这种情况没有发生，Lululemon 随后几个季度的财务数据可能会低于预期。</blockquote> Is LULU Stock A Buy, Sell, Or Hold?<blockquote>露露股票是买入、卖出还是持有？</blockquote> LULU stock is a Hold based on my analysis.<blockquote>根据我的分析，露露股票是持有的。</blockquote> I fear that Lululemon could suffer from a valuation de-rating, assuming that the company's future quarterly earnings fall short of market expectations as a result of the various factors that I highlighted in the previous section. That said, I do acknowledge that LULU is the market leader in athleisure with significantmarket share, and its medium-term growth prospects are excellent, especially for the international and e-commerce segments. Considering both the positives and negatives associated with the stock, my opinion is that a Hold rating is fair for Lululemon.<blockquote>我担心 Lululemon 可能会遭受估值下调，假设由于我在上一节中强调的各种因素，该公司未来的季度收益低于市场预期。话虽如此，我确实承认 LULU 是运动休闲领域的市场领导者，拥有巨大的市场份额，其中期增长前景非常好，尤其是在国际和电子商务领域。考虑到与该股相关的利弊，我认为对 Lululemon 给予持有评级是公平的。</blockquote> LULU's key risks are actual investments exceeding its original budget, a failure to ramp up sales of its new footwear products next year to achieve economies of scale, and prolonged lock-downs in Vietnam which bring greater-than-expected disruptions for the company.<blockquote>LULU 的主要风险是实际投资超出其原始预算、明年未能增加新鞋产品的销售以实现规模经济，以及越南的长期封锁给公司带来超出预期的干扰。</blockquote>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Is Lululemon Stock A Buy Or Sell After Q2 Earnings? Key Risk Is Lower-Than-Expected Profitability<blockquote>Lululemon 股票在第二季度财报公布后是买入还是卖出？主要风险是盈利能力低于预期</blockquote></title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 12.5px; color: #7E829C; margin: 0;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIs Lululemon Stock A Buy Or Sell After Q2 Earnings? Key Risk Is Lower-Than-Expected Profitability<blockquote>Lululemon 股票在第二季度财报公布后是买入还是卖出？主要风险是盈利能力低于预期</blockquote>\n</h2>\n<h4 class=\"meta\">\n\nSeeking Alpha2021-09-17 17:36\n\n</h4>\n</header>\n<article>\nSummary<blockquote>总结</blockquote> <ul> <li>Lululemon's share price has done much better than the key benchmark stock indices in the past few months, as a result of better-than-expected financial performance in 1H 2021.</li> <li>LULU achieved strong top line and bottom line growth in Q2 2021 which also beat market expectations, but lower-than-expected profitability for the company going forward is a key downside risk.</li> <li>I see Lululemon stock as Hold after Q2 earnings, as its valuations are expensive, and an earnings miss in the future could de-rate its shares.</li> </ul> <img src=\"https://static.tigerbbs.com/4c5831fd8e2c9cd8844c973c0f757a56\" tg-width=\"1536\" tg-height=\"1022\" width=\"100%\" height=\"auto\">jentakespictures/iStock Editorial via Getty Images<blockquote><ul><li>由于 2021 年上半年的财务业绩好于预期，Lululemon 的股价在过去几个月中表现远好于主要基准股指。</li><li>LULU在2021年第二季度实现了强劲的营收和利润增长，也超出了市场预期，但公司未来的盈利能力低于预期是一个关键的下行风险。</li><li>我认为 Lululemon 股票在第二季度财报公布后持有，因为其估值昂贵，而且未来盈利失败可能会降低其股价。</li></ul>jentakespictures/iStock 社论来自 Getty Images</blockquote> Elevator Pitch<blockquote>电梯俯仰</blockquote> I assign a Neutral rating to Lululemon Athletica Inc (LULU).<blockquote>我对 Lululemon Athletica Inc (LULU) 给予中性评级。</blockquote> Lululemon has delivered significant stock price outperformance as compared to the major benchmark stock indices in the last couple of months, and the stock's current valuations are not that appealing following its recent share price run. Larger-than-expected investments in the near future, an unfavorable sales mix with the introduction of new footwear products next year, and potential supply chain disruptions could be a potential drag on LULU's forward earnings.<blockquote>与过去几个月的主要基准股票指数相比，Lululemon 的股价表现显着优于主要基准股票指数，而且在最近的股价上涨之后，该股目前的估值并不那么有吸引力。近期投资超出预期、明年推出新鞋产品带来的不利销售组合以及潜在的供应链中断可能会拖累 LULU 的未来盈利。</blockquote> My rating for Lululemon is a Hold or Neutral. On one hand, I am positive on LULU's better-than-expected Q2 results and its long-term growth prospects. On the flip side, LULU's premium valuations and recent share price run have priced in the near-term positives for the company, while there are downside risks relating to its future earnings outlook.<blockquote>我对Lululemon的评级是持有或中性。一方面，我对露露好于预期的第二季度业绩及其长期增长前景持乐观态度。另一方面，LULU 的溢价估值和近期股价上涨为该公司的近期利好奠定了基础，而其未来盈利前景则存在下行风险。</blockquote> Company Description<blockquote>公司简介</blockquote> In its press releases, Lululemon Athletica Inc&nbsp;refers to itself&nbsp;as \"a healthy lifestyle inspired athletic apparel company for yoga, running, training, and most other sweaty pursuits\". LULU was established in&nbsp;1998, and the company's shares were listed on the Nasdaq in&nbsp;2007.<blockquote>在其新闻稿中，Lululemon Athletica Inc.将自己称为“一家受健康生活方式启发的运动服装公司，用于瑜伽、跑步、训练和大多数其他汗流浃背的追求”。露露成立于1998年，公司股票于2007年在纳斯达克上市。</blockquote> As of August 1, 2021, Lululemon boasted a network of&nbsp;534 storesthat are located in 17 different markets. LULU generated&nbsp;69%, 14% and 17%of the company's revenue from the US, Canada and international markets, respectively in the first half of FY 2021. The company-operated stores, the direct-to-consumer business, and others contributed&nbsp;46%, 43% and 11%&nbsp;of its 1H 2021 sales, respectively. In the company's most recent 10-Q filing, Lululemon Athletica&nbsp;defines&nbsp;the others business segment as \"outlets, temporary locations, sales to wholesale accounts, license and supply arrangements, and&nbsp;MIRROR&nbsp;(home gym business acquired in2020).\"<blockquote>截至2021年8月1日，Lululemon拥有534家商店，分布在17个不同的市场。2021财年上半年，LULU 69%、14%和17%的收入分别来自美国、加拿大和国际市场。该公司运营的商店、直接面向消费者的业务和其他业务分别贡献了 2021 年上半年销售额的 46%、43% 和 11%。在该公司最新的 10-Q 文件中，Lululemon Athletica 将其他业务部门定义为“商店、临时地点、批发客户销售、许可和供应安排以及镜子（2020 年收购的家庭健身房业务）”。</blockquote> Lululemon Stock Price<blockquote>Lululemon 股价</blockquote> Lululemon's stock price increased by&nbsp;+20.4%&nbsp;and&nbsp;+32.8%&nbsp;in the year-to-date and past one-year time periods, respectively which tracked the performance of the S&amp;P 500 and the Nasdaq Composite&nbsp;very closely. However, LULU started to outperform the key benchmark stock indices in the last couple of months. In the past six months, Lululemon's share price rose by+33.3%, while the Nasdaq Composite and S&amp;P 500 were only up in the low-teens percentages over the same period. In the last three months, LULU's shares went up by +25.0%, as compared to the&nbsp;+7.7% and +5.5%&nbsp;increases for the Nasdaq Composite and S&amp;P 500, respectively during the same time.<blockquote>Lululemon的股价在今年迄今和过去一年期间分别上涨了+20.4%和+32.8%，这与标普500和纳斯达克综合指数的表现非常密切。然而，在过去几个月里，LULU 的表现开始优于主要基准股票指数。在过去的六个月里，Lululemon的股价上涨了+33.3%，而同期纳斯达克综合指数和标普500指数的涨幅仅为百分之几。在过去三个月中，露露的股价上涨了+25.0%，而同期纳斯达克综合指数和标普500指数分别上涨了+7.7%和+5.5%。</blockquote> LULU's earnings beat for both the&nbsp;first&nbsp;and&nbsp;second&nbsp;quarter of 2021 clearly helped to drive the company's recent strong stock price performance. More significantly, Lululemon Athletica's above-expectations financial performance in the first half of this year implies that the company has structural growth drivers working in its favor, instead of merely being a beneficiary of one-off Work-From-Home or WFH tailwinds during the peak of COVID-19.<blockquote>LULU 2021 年第一季度和第二季度的盈利超出预期显然有助于推动该公司近期强劲的股价表现。更重要的是，Lululemon Athletica 今年上半年超出预期的财务业绩意味着该公司拥有对其有利的结构性增长动力，而不仅仅是一次性在家工作或 WFH 顺风的受益者。 COVID-19 高峰期。</blockquote> At its recent second-quarter results briefing, Lululemon&nbsp;noted&nbsp;that \"the pandemic drove forward, accelerated some of the guest behaviors that play to the strength of our brand\" which included \"general fitness awareness\", \"being well, living well\" and \"the importance of functional apparel\". The company also&nbsp;emphasized&nbsp;that its \"brand is early innings across product with activities where we focus on\" and \"gaining market share across categories\".<blockquote>在最近的第二季度业绩发布会上，Lululemon 指出，“疫情推动了一些客人行为的发展，加速了我们品牌的优势”，其中包括“一般健身意识”、“身体健康，生活美好”和“功能性服装的重要性”。该公司还强调，其“品牌是我们重点关注的跨产品活动的早期阶段”和“获得跨类别的市场份额”。</blockquote> Separately, it is critical to examine if whether Lululemon's recent share price outperformance makes it less attractive as a potential investment candidate in terms of valuations.<blockquote>另外，至关重要的是要研究 Lululemon 最近的股价表现是否会降低其作为潜在投资候选者在估值方面的吸引力。</blockquote> Peer Valuation Comparison For LULU<blockquote>LULU 的同行估值比较</blockquote> <table> <tbody> <tr> <td>Stock</td> <td>Consensus Current Fiscal Year Normalized P/E Multiple</td> <td>Consensus Forward One Fiscal Year Normalized P/E Multiple</td> <td>Consensus Current Fiscal Year Revenue Growth Metric</td> <td>Consensus Forward One Fiscal Year Revenue Growth Metric</td> <td>Consensus Current Fiscal Year ROE Metric</td> <td>Consensus Forward One Fiscal Year ROE Metric</td> </tr> <tr> <td>Lululemon</td> <td>56.0</td> <td>47.1</td> <td>+41.6%</td> <td>+15.0%</td> <td>33.4%</td> <td>34.8%</td> </tr> <tr> <td>Canada Goose Holdings Inc. (GOOS)</td> <td>40.8</td> <td>26.8</td> <td>+21.7%</td> <td>+18.2%</td> <td>18.7%</td> <td>21.3%</td> </tr> <tr> <td>Under Armour, Inc. (UAA)</td> <td>38.7</td> <td>34.0</td> <td>+23.0%</td> <td>+5.3%</td> <td>13.4%</td> <td>14.8%</td> </tr> <tr> <td>NIKE, Inc. (NKE)</td> <td>37.2</td> <td>31.5</td> <td>+12.4%</td> <td>+10.0%</td> <td>47.1%</td> <td>47.6%</td> </tr> <tr> <td>adidas AG (OTCQX:ADDYY) (OTCQX:ADDDF) [ADS:GR]</td> <td>38.8</td> <td>29.0</td> <td>+10.6%</td> <td>+12.1%</td> <td>22.5%</td> <td>25.2%</td> </tr> </tbody> </table> Source: S&amp;P Capital IQ<blockquote><table><tbody><tr><td>股票</td><td>共识本财政年度标准化市盈率倍数</td><td>共识远期一个财政年度标准化市盈率倍数</td><td>本财年共识收入增长指标</td><td>共识展望一个财年收入增长指标</td><td>当前财年共识 ROE 指标</td><td>共识 Forward 一个财年 ROE 指标</td></tr><tr><td>露露柠檬</td><td>56.0</td><td>47.1</td><td>+41.6%</td><td>+15.0%</td><td>33.4%</td><td>34.8%</td></tr><tr><td>加拿大鹅控股公司 (GOOS)</td><td>40.8</td><td>26.8</td><td>+21.7%</td><td>+18.2%</td><td>18.7%</td><td>21.3%</td></tr><tr><td>安德玛公司 (UAA)</td><td>38.7</td><td>34.0</td><td>+23.0%</td><td>+5.3%</td><td>13.4%</td><td>14.8%</td></tr><tr><td>耐克公司 (NKE)</td><td>37.2</td><td>31.5</td><td>+12.4%</td><td>+10.0%</td><td>47.1%</td><td>47.6%</td></tr><tr><td>阿迪达斯股份公司 (OTCQX:ADDYY) (OTCQX:ADDDF) [ADS:GR]</td><td>38.8</td><td>29.0</td><td>+10.6%</td><td>+12.1%</td><td>22.5%</td><td>25.2%</td></tr></tbody></table>资料来源：标准普尔资本智商</blockquote> As per the peer comparison table presented above, Lululemon is valued by the market at a significant premium to the company's listed peers with respect to forward P/E valuation metrics. LULU does boast superior revenue growth prospects as compared to all of its peers, while its forecasted ROEs are higher than the majority of its peers as well. As such, Lululemon does deserve to trade at higher P/E multiples than that of its peers, but the stock's lofty valuations are not very attractive on an absolute basis if one wants to consider it as an investment candidate.<blockquote>根据上述同行比较表，就远期市盈率估值指标而言，市场对 Lululemon 的估值高于该公司的上市同行。与所有同行相比，LULU 确实拥有优越的收入增长前景，同时其预测的净资产收益率也高于大多数同行。因此，Lululemon 确实值得以高于同行的市盈率进行交易，但如果要将其视为投资候选者，该股的高估值绝对不是很有吸引力。</blockquote> LULU Stock Earnings<blockquote>露露股票收益</blockquote> LULU reported its&nbsp;Q2 2021 earnings&nbsp;on&nbsp;September 8, 2021&nbsp;after trading hours, and the company's stock price jumped by +11% the next day, from $380.85 to $420.71. It is clear that the market is very satisfied with Lululemon's recent quarterly financial performance.<blockquote>LULU 于 2021 年 9 月 8 日交易时段后公布了 2021 年第二季度收益，该公司股价第二天上涨 11%，从 380.85 美元上涨至 420.71 美元。显然，市场对Lululemon近期的季度财务表现非常满意。</blockquote> LULU's top line expanded by +61% YoY from $903 million in Q2 2020 to&nbsp;$1,451 million&nbsp;in Q2 2021, while its non-GAAP adjusted earnings per share increased by +123% YoY from $0.74 to$1.65over the same period. Notably, Lululemon's revenue and earnings per share were+9% and +39%&nbsp;higher than the market consensus' forecasts, respectively based on S&amp;P Capital IQ data. As I highlighted in the preceding section with reference to the management's comments, athleisure continues to see strong demand, and Lululemon is a key beneficiary as the leading brand in this segment, which explains the company's good quarterly financial results.<blockquote>LULU 的营收同比增长 +61%，从 2020 年第二季度的 9.03 亿美元增至 2021 年第二季度的 14.51 亿美元，而同期的非 GAAP 调整后每股收益同比增长 +123%，从 0.74 美元增至 1.65 美元。值得注意的是，根据标准普尔资本智商数据，Lululemon 的收入和每股收益分别比市场普遍预测高出 +9% 和 +39%。正如我在上一节中参考管理层的评论所强调的，athleisure 的需求继续强劲，而 Lululemon 作为该细分市场的领先品牌是主要受益者，这解释了该公司良好的季度财务业绩。</blockquote> Specifically, the excellent performance of Lululemon's international and e-commerce businesses in the recent quarter is noteworthy. LULU's revenue from international markets grew by&nbsp;+49%&nbsp;YoY in Q2 2021, and this was equivalent to a two-year CAGR of&nbsp;+43%. Lululemon&nbsp;highlighted&nbsp;at the company's Q2 earnings call that \"our international business is ahead of the four times growth (revenue target) we put out to be completed by the end of 2023.\"<blockquote>具体来说，Lululemon国际和电子商务业务在最近一个季度的出色表现值得注意。2021 年第二季度，LULU 来自国际市场的收入同比增长 +49%，相当于两年复合年增长率 +43%。Lululemon 在公司第二季度财报看涨期权上强调，“我们的国际业务领先于我们设定的到 2023 年底完成的四倍增长（收入目标）。”</blockquote> On the other hand, LULU's e-commerce sales still increased by+4%YoY (adjusted for foreign exchange effects) in Q2 2021, despite an exceptionally high base in Q2 2020 (+157% YoY e-commerce sales growth). This translates to a two-year e-commerce sales CAGR of approximately&nbsp;+66%. Lululemonrevealedthat it is implementing new initiatives to further drive the growth of its e-commerce business, which includes \"expanding our alternative payment methods, improved storytelling, more predictive search and a more seamless checkout.\"<blockquote>另一方面，尽管2020年Q2的基数异常高（电子商务销售额同比增长+157%），但LULU的电子商务销售额在2021年Q2仍同比增长+4%（经外汇影响调整）。这意味着两年的电子商务销售CAGR约为+66%。Lululemon透露，它正在实施新举措，以进一步推动其电子商务业务的增长，其中包括“扩大我们的替代支付方式、改进讲故事、更具预测性的搜索和更无缝的结账。”</blockquote> Moving ahead, Lululemon is&nbsp;guiding for&nbsp;$6.19-$6.26 billion in revenue and $7.38-$7.48 in earnings per share for full-year fiscal 2021. This is aligned with Wall Street analysts' consensus top line and bottom line of $6.233 billion and $7.48, which translate to YoY growth rates of +41.6% and +59.2%, respectively as per S&amp;P Capital IQ data.<blockquote>展望未来，Lululemon 预计 2021 财年全年营收为 6.19-62.6 亿美元，每股收益为 7.38-7.48 美元。根据 S&amp;P Capital IQ 数据，这与华尔街分析师一致的营收和利润 62.33 亿美元和 7.48 美元一致，这意味着同比增长率分别为 +41.6% 和 +59.2%。</blockquote> However, there is a real risk that the company disappoints on profitability in the coming quarters.<blockquote>然而，该公司未来几个季度的盈利能力确实存在令人失望的风险。</blockquote> Firstly, Lululemon's future investments could be larger than expected. The company&nbsp;guided&nbsp;at its recent results call for FY 2021 SG&amp;A (Selling, General &amp; Administrative) \"deleverage of 10 to 30 basis points versus 2020\" and an increase in capital expenditures this year. LULU&nbsp;attributed&nbsp;this to \"our investment in MIRROR (highlighted in \"Company Description\" section) brand building\", \"MIRROR shop-in-shops\" and \"increased investment in our supply chain, digital capabilities, new store openings and renovations.\" It is not unusual for actual investments to turn out to be greater than what companies budget for.<blockquote>首先，Lululemon未来的投资可能会比预期更大。该公司在最近公布的 2021 财年 SG&amp;A（销售、一般和行政）业绩看涨期权中指出，“与 2020 年相比，去杠杆化 10 至 30 个基点”，并增加今年的资本支出。LULU 将此归因于“我们对 MIRROR（在“公司描述”部分突出显示）品牌建设的投资”、“MIRROR 店中店”以及“对供应链、数字化能力、新店开业和翻新的投资增加”。实际投资大于公司预算的情况并不少见。</blockquote> Secondly, LULU's introduction of footwear products in 2022 could be negative for the company's overall gross profit margin. At its 1Q 2021 earnings call in June 2021, Lululemon&nbsp;mentioned&nbsp;that \"we are bringing footwear next year.\" As a new product line which will begin with relatively lower volume, footwear products are likely to have lower gross profit margins than LULU's existing core products. In other words, Lululemon's sales mix could be less favorable next year, and this could translate to lower gross margins for the company as a whole.<blockquote>其次，露露2022年推出鞋类产品可能会对公司整体毛利率产生负面影响。Lululemon 在 2021 年 6 月举行的 2021 年第一季度盈利看涨期权上提到，“我们明年将推出鞋类。”作为一个产量相对较低的新产品线，鞋类产品的毛利率可能低于露露现有的核心产品。换句话说，Lululemon 明年的销售组合可能会不太有利，这可能会导致公司整体毛利率下降。</blockquote> Thirdly, lock-downs in Vietnam relating to COVID-19 could have an adverse impact on the company's business operations. Lululemon&nbsp;acknowledged&nbsp;at its Q2 2021 results briefing that the Vietnam production disruption \"is currently impacting approximately 20% of our second half inventory\", with the country accounting for \"30% of our finished goods.\" A September 13, 2021&nbsp;Seeking Alpha&nbsp;news article&nbsp;quoted research from&nbsp;BTIG&nbsp;which mentioned that there are \"supply risks in the apparel and footwear sector as the negative impact of Vietnam factory closures becomes clearer.\" LULU's current full-year guidance is based onthe assumptionthat Southern Vietnam commences its re-opening process this month, and if that does not happen, Lululemon's financial numbers in the subsequent quarters could potentially come in below expectations.<blockquote>第三，越南与COVID-19相关的封锁可能会对本公司的业务运营产生不利影响。Lululemon 在 2021 年第二季度业绩简报中承认，越南生产中断“目前影响了我们下半年库存的约 20%”，该国占“我们成品的 30%”。2021年9月13日寻求阿尔法新闻文章引用了来自BTIG其中提到，“随着越南工厂关闭的负面影响变得更加明显，服装和鞋类行业存在供应风险。”LULU 目前的全年指引是基于南越将于本月开始重新开放的假设，如果这种情况没有发生，Lululemon 随后几个季度的财务数据可能会低于预期。</blockquote> Is LULU Stock A Buy, Sell, Or Hold?<blockquote>露露股票是买入、卖出还是持有？</blockquote> LULU stock is a Hold based on my analysis.<blockquote>根据我的分析，露露股票是持有的。</blockquote> I fear that Lululemon could suffer from a valuation de-rating, assuming that the company's future quarterly earnings fall short of market expectations as a result of the various factors that I highlighted in the previous section. That said, I do acknowledge that LULU is the market leader in athleisure with significantmarket share, and its medium-term growth prospects are excellent, especially for the international and e-commerce segments. Considering both the positives and negatives associated with the stock, my opinion is that a Hold rating is fair for Lululemon.<blockquote>我担心 Lululemon 可能会遭受估值下调，假设由于我在上一节中强调的各种因素，该公司未来的季度收益低于市场预期。话虽如此，我确实承认 LULU 是运动休闲领域的市场领导者，拥有巨大的市场份额，其中期增长前景非常好，尤其是在国际和电子商务领域。考虑到与该股相关的利弊，我认为对 Lululemon 给予持有评级是公平的。</blockquote> LULU's key risks are actual investments exceeding its original budget, a failure to ramp up sales of its new footwear products next year to achieve economies of scale, and prolonged lock-downs in Vietnam which bring greater-than-expected disruptions for the company.<blockquote>LULU 的主要风险是实际投资超出其原始预算、明年未能增加新鞋产品的销售以实现规模经济，以及越南的长期封锁给公司带来超出预期的干扰。</blockquote>\n<div class=\"bt-text\">\n\n\n 来源：<a href=\"https://seekingalpha.com/article/4455585-lululemon-stock-buy-sell-q2-earnings\">Seeking Alpha</a>\n为提升您的阅读体验，我们对本页面进行了排版优化\n\n\n</div>\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"LULU":"lululemon athletica"},"source_url":"https://seekingalpha.com/article/4455585-lululemon-stock-buy-sell-q2-earnings","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1139296336","content_text":"Summary\n\nLululemon's share price has done much better than the key benchmark stock indices in the past few months, as a result of better-than-expected financial performance in 1H 2021.\nLULU achieved strong top line and bottom line growth in Q2 2021 which also beat market expectations, but lower-than-expected profitability for the company going forward is a key downside risk.\nI see Lululemon stock as Hold after Q2 earnings, as its valuations are expensive, and an earnings miss in the future could de-rate its shares.\n\njentakespictures/iStock Editorial via Getty Images\nElevator Pitch\nI assign a Neutral rating to Lululemon Athletica Inc (LULU).\nLululemon has delivered significant stock price outperformance as compared to the major benchmark stock indices in the last couple of months, and the stock's current valuations are not that appealing following its recent share price run. Larger-than-expected investments in the near future, an unfavorable sales mix with the introduction of new footwear products next year, and potential supply chain disruptions could be a potential drag on LULU's forward earnings.\nMy rating for Lululemon is a Hold or Neutral. On one hand, I am positive on LULU's better-than-expected Q2 results and its long-term growth prospects. On the flip side, LULU's premium valuations and recent share price run have priced in the near-term positives for the company, while there are downside risks relating to its future earnings outlook.\nCompany Description\nIn its press releases, Lululemon Athletica Inc refers to itself as \"a healthy lifestyle inspired athletic apparel company for yoga, running, training, and most other sweaty pursuits\". LULU was established in 1998, and the company's shares were listed on the Nasdaq in 2007.\nAs of August 1, 2021, Lululemon boasted a network of 534 storesthat are located in 17 different markets. LULU generated 69%, 14% and 17%of the company's revenue from the US, Canada and international markets, respectively in the first half of FY 2021. The company-operated stores, the direct-to-consumer business, and others contributed 46%, 43% and 11% of its 1H 2021 sales, respectively. In the company's most recent 10-Q filing, Lululemon Athletica defines the others business segment as \"outlets, temporary locations, sales to wholesale accounts, license and supply arrangements, and MIRROR (home gym business acquired in2020).\"\nLululemon Stock Price\nLululemon's stock price increased by +20.4% and +32.8% in the year-to-date and past one-year time periods, respectively which tracked the performance of the S&P 500 and the Nasdaq Composite very closely. However, LULU started to outperform the key benchmark stock indices in the last couple of months. In the past six months, Lululemon's share price rose by+33.3%, while the Nasdaq Composite and S&P 500 were only up in the low-teens percentages over the same period. In the last three months, LULU's shares went up by +25.0%, as compared to the +7.7% and +5.5% increases for the Nasdaq Composite and S&P 500, respectively during the same time.\nLULU's earnings beat for both the first and second quarter of 2021 clearly helped to drive the company's recent strong stock price performance. More significantly, Lululemon Athletica's above-expectations financial performance in the first half of this year implies that the company has structural growth drivers working in its favor, instead of merely being a beneficiary of one-off Work-From-Home or WFH tailwinds during the peak of COVID-19.\nAt its recent second-quarter results briefing, Lululemon noted that \"the pandemic drove forward, accelerated some of the guest behaviors that play to the strength of our brand\" which included \"general fitness awareness\", \"being well, living well\" and \"the importance of functional apparel\". The company also emphasized that its \"brand is early innings across product with activities where we focus on\" and \"gaining market share across categories\".\nSeparately, it is critical to examine if whether Lululemon's recent share price outperformance makes it less attractive as a potential investment candidate in terms of valuations.\nPeer Valuation Comparison For LULU\n\n\n\nStock\nConsensus Current Fiscal Year Normalized P/E Multiple\nConsensus Forward One Fiscal Year Normalized P/E Multiple\nConsensus Current Fiscal Year Revenue Growth Metric\nConsensus Forward One Fiscal Year Revenue Growth Metric\nConsensus Current Fiscal Year ROE Metric\nConsensus Forward One Fiscal Year ROE Metric\n\n\nLululemon\n56.0\n47.1\n+41.6%\n+15.0%\n33.4%\n34.8%\n\n\nCanada Goose Holdings Inc. (GOOS)\n40.8\n26.8\n+21.7%\n+18.2%\n18.7%\n21.3%\n\n\nUnder Armour, Inc. (UAA)\n38.7\n34.0\n+23.0%\n+5.3%\n13.4%\n14.8%\n\n\nNIKE, Inc. (NKE)\n37.2\n31.5\n+12.4%\n+10.0%\n47.1%\n47.6%\n\n\nadidas AG (OTCQX:ADDYY) (OTCQX:ADDDF) [ADS:GR]\n38.8\n29.0\n+10.6%\n+12.1%\n22.5%\n25.2%\n\n\n\nSource: S&P Capital IQ\nAs per the peer comparison table presented above, Lululemon is valued by the market at a significant premium to the company's listed peers with respect to forward P/E valuation metrics. LULU does boast superior revenue growth prospects as compared to all of its peers, while its forecasted ROEs are higher than the majority of its peers as well. As such, Lululemon does deserve to trade at higher P/E multiples than that of its peers, but the stock's lofty valuations are not very attractive on an absolute basis if one wants to consider it as an investment candidate.\nLULU Stock Earnings\nLULU reported its Q2 2021 earnings on September 8, 2021 after trading hours, and the company's stock price jumped by +11% the next day, from $380.85 to $420.71. It is clear that the market is very satisfied with Lululemon's recent quarterly financial performance.\nLULU's top line expanded by +61% YoY from $903 million in Q2 2020 to $1,451 million in Q2 2021, while its non-GAAP adjusted earnings per share increased by +123% YoY from $0.74 to$1.65over the same period. Notably, Lululemon's revenue and earnings per share were+9% and +39% higher than the market consensus' forecasts, respectively based on S&P Capital IQ data. As I highlighted in the preceding section with reference to the management's comments, athleisure continues to see strong demand, and Lululemon is a key beneficiary as the leading brand in this segment, which explains the company's good quarterly financial results.\nSpecifically, the excellent performance of Lululemon's international and e-commerce businesses in the recent quarter is noteworthy. LULU's revenue from international markets grew by +49% YoY in Q2 2021, and this was equivalent to a two-year CAGR of +43%. Lululemon highlighted at the company's Q2 earnings call that \"our international business is ahead of the four times growth (revenue target) we put out to be completed by the end of 2023.\"\nOn the other hand, LULU's e-commerce sales still increased by+4%YoY (adjusted for foreign exchange effects) in Q2 2021, despite an exceptionally high base in Q2 2020 (+157% YoY e-commerce sales growth). This translates to a two-year e-commerce sales CAGR of approximately +66%. Lululemonrevealedthat it is implementing new initiatives to further drive the growth of its e-commerce business, which includes \"expanding our alternative payment methods, improved storytelling, more predictive search and a more seamless checkout.\"\nMoving ahead, Lululemon is guiding for $6.19-$6.26 billion in revenue and $7.38-$7.48 in earnings per share for full-year fiscal 2021. This is aligned with Wall Street analysts' consensus top line and bottom line of $6.233 billion and $7.48, which translate to YoY growth rates of +41.6% and +59.2%, respectively as per S&P Capital IQ data.\nHowever, there is a real risk that the company disappoints on profitability in the coming quarters.\nFirstly, Lululemon's future investments could be larger than expected. The company guided at its recent results call for FY 2021 SG&A (Selling, General & Administrative) \"deleverage of 10 to 30 basis points versus 2020\" and an increase in capital expenditures this year. LULU attributed this to \"our investment in MIRROR (highlighted in \"Company Description\" section) brand building\", \"MIRROR shop-in-shops\" and \"increased investment in our supply chain, digital capabilities, new store openings and renovations.\" It is not unusual for actual investments to turn out to be greater than what companies budget for.\nSecondly, LULU's introduction of footwear products in 2022 could be negative for the company's overall gross profit margin. At its 1Q 2021 earnings call in June 2021, Lululemon mentioned that \"we are bringing footwear next year.\" As a new product line which will begin with relatively lower volume, footwear products are likely to have lower gross profit margins than LULU's existing core products. In other words, Lululemon's sales mix could be less favorable next year, and this could translate to lower gross margins for the company as a whole.\nThirdly, lock-downs in Vietnam relating to COVID-19 could have an adverse impact on the company's business operations. Lululemon acknowledged at its Q2 2021 results briefing that the Vietnam production disruption \"is currently impacting approximately 20% of our second half inventory\", with the country accounting for \"30% of our finished goods.\" A September 13, 2021 Seeking Alpha news article quoted research from BTIG which mentioned that there are \"supply risks in the apparel and footwear sector as the negative impact of Vietnam factory closures becomes clearer.\" LULU's current full-year guidance is based onthe assumptionthat Southern Vietnam commences its re-opening process this month, and if that does not happen, Lululemon's financial numbers in the subsequent quarters could potentially come in below expectations.\nIs LULU Stock A Buy, Sell, Or Hold?\nLULU stock is a Hold based on my analysis.\nI fear that Lululemon could suffer from a valuation de-rating, assuming that the company's future quarterly earnings fall short of market expectations as a result of the various factors that I highlighted in the previous section. That said, I do acknowledge that LULU is the market leader in athleisure with significantmarket share, and its medium-term growth prospects are excellent, especially for the international and e-commerce segments. Considering both the positives and negatives associated with the stock, my opinion is that a Hold rating is fair for Lululemon.\nLULU's key risks are actual investments exceeding its original budget, a failure to ramp up sales of its new footwear products next year to achieve economies of scale, and prolonged lock-downs in Vietnam which bring greater-than-expected disruptions for the company.","news_type":1,"symbols_score_info":{"LULU":0.9}},"isVote":1,"tweetType":1,"viewCount":3757,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"CN","currentLanguage":"CN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":4,"subscribersOnly":false,"subscribersOnlyAccessible":false,"xxTargetLangEnum":"ZH_CN"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/866715620"}