lululemon

Fundamental Analysis

Founded by Chip Wilson in Vancouver, Canada in 1998, lululemon is a yoga-inspired, technical athletic apparel company for women and men. What started as a design studio by day and yoga studio by night soon became a standalone store in November of 2000 on West 4th Avenue in Vancouver’s Kitsilano neighbourhood.

Our vision for our store was to create more than a place where people could get gear to sweat in, we wanted to create a community hub where people could learn and discuss the physical aspects of healthy living, mindfulness and living a life of possibility. It was also important for us to create real relationships with our guests and understand what they were passionate about, how they liked to sweat and help them celebrate their goals. Today, we do this in our stores around the globe.

https://info.lululemon.com/about/our-story/history

1

2

Reasons to buy – lululemon athletica

High level decisions on buy or sell for a stock should be driven by

1. The margin that the company makes. i.e. Out of $1 that the company sells how much does the company taken home.

    • Here we see lululemon athletica makes a margin of 16% on Operating Level and about 11% on Net level. This means that out of $1 that it makes $0.41 is being pocketed as profits.

2. The growth rates of the company on revenue, net income, EPS and Dividend. i.e. If it sold $1 last year how much more did it sell this year.

    • Here we see net revenue growth of 25% in the revenue and the net profit figures grew by 140%.

3. The efficiency ratios of the company on Equity and Assets. i.e. How well is the company able to sweat each $1 that it puts to work in the company.

    • Here we see lululemon athletica makes a Return on Assets of 15% and Return of Equity of 18% which is pretty good.

Lululemon creates yoga-inspired, technical athletic apparel company for women and men. Given the brand recall, improvement in health consciousness and low cost of production, this is one to keep in the pocket.

GOLD STANDARD : This is one of the no-debate stocks that are a must have in ones portfolio.

All these ratios can be found in the attached excel sheets and are based on the EDGAR report submitted by lululemon athletica to the SEC. All the data on the above analysis can be found at the link below

https://www.sec.gov/cgi-bin/viewer?action=view&cik=1397187&accession_number=0001397187-18-000030&xbrl_type=v


Balance Sheet

3

 


Income Statement

4

 

 


Leave a Reply