McGough Nails $LULU Short

Takeaway: Lululemon shares are tanking. Hedgeye's Brian McGough nailed it.

Got process? Brian McGough does.

 

Hedgeye’s Retail Guru-In-Chief held a jam-packed conference call this past Friday outlining his concerns and bearish thesis for Lululemon.  Here’s one key chart among three or four dozen from his deck.

 

(Ping sales@hedgeye.com for more information.)

 

McGough Nails $LULU Short - lulu0

 

Fast forward to this morning.

 

Lululemon is getting crushed down 18%. Cutting your forecast, lingering effects of an embarrassing recall and controversial comments by its founder will do that to you.

 

According to McGough, this is a top line issue for LULU. To be fair, it’s in line with what myriad retailers have said over the past week. On the flip side however, he says LULU has always been immune to any kind of Macro fluctuations.

 

The point here? The competitive landscape has gotten so fierce, and its sales productivity has gotten so high, that Lululemon needs to fundamentally change how it operates the business.

 

Finally, McGough mentions that the company is set to present tomorrow down in Orlando at ICR. But their new CEO won’t be there – at least that’s the plan.

 

#pathetic 

 

Click here to learn more about the Hedgeye Revolution. 


Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more

A Sneak Peek At Hedgeye's 2017 GDP Estimates

Here's an inside look at our GDP estimates versus Wall Street consensus.

read more

Cartoon of the Day: Green Thumb

So far, 64 of 498 companies in the S&P 500 have reported aggregate sales and earnings growth of 6.1% and 16.8% respectively.

read more

Europe's Battles Against Apple, Google, Innovation & Jobs

"“I am very concerned the E.U. maintains a battle against the American giants while doing everything possible to sustain so-called national champions," writes economist Daniel Lacalle. "Attacking innovation doesn’t create jobs.”

read more

An Open Letter to Pandora Management...

"Please stop leaking information to the press," writes Hedgeye Internet & Media analyst Hesham Shaaban. "You are getting in your own way, and blowing up your shareholders in the process."

read more

A 'Toxic Cocktail' Brewing for A Best Idea Short

The first quarter earnings pre-announcement today is not the end of the story for Mednax (MD). Rising labor costs and slowing volume is a toxic cocktail...

read more

Energy Stocks: Time to Buy? Here's What You Need to Know

If you're heavily-invested in Energy stocks it's been a heck of a year. Energy is the worst-performing sector in the S&P 500 year-to-date and value investors are now hunting for bargains in the oil patch. Before you buy, here's what you need to know.

read more

McCullough: ‘My 1-Minute Summary of My Institutional Meetings in NYC Yesterday’

What are even some of the smartest investors in the world missing right now?

read more

Cartoon of the Day: Political Portfolio Positioning

Leave your politics out of your portfolio.

read more

Jim Rickards Answers the Hedgeye 21

Bestselling author Jim Rickards says if he could be any animal he’d be a T-Rex. He also loves bonds and hates equities. Check out all of his answers to the Hedgeye 21.

read more

Amazon's New 'Big Idea': Ignore It At Your Own Peril

"We all see another ‘big idea’ out of Amazon (or the press making one up) just about every day," writes Retail Sector Head Brian McGough. "But whatever you do, DON’T ignore this one!"

read more