LULU - Holiday Guidance Update
Takeaway: LULU came out this morning and raised guidance consistent with the high end of the range it had set before lowering expectations a few weeks back because of port delay issues. Despite the guide-down the stock has traded up 26% since the 3Q print and is up again following this release. We still like the name here - though the risk reward isn't what it was when the stock was trading in the 30s. Nonetheless, we're willing to give the benefit of the doubt to Co-Chairmen Casey/Mussafer with the hire of CFO Stuart Haselden last week. Is he a 'rockstar' CFO? Probably not. But we think he'll go a long way in building a finance culture at a company that is more devoid of one than any organization we have ever seen. The former management team was incapable of earnings anything over $2.50, in our opinion. But the one that should develop over the next year should put $3.50-$4.00 in play. In other words, the stock has traded up mostly on sentiment factors, but we think that the next leg will hinge upon LULU finally building out its global distribution platform, and growing like a great global growth company as opposed to a niche brand that has outgrown its Yoga pants.
TIF - Holiday Comp Sales Flat Y/Y
Our initial thought when we saw the number was that this was FX-related. While Japan looked terrible (-8%), Europe looked decent-enough at +4% (constant currency). The big problem area was the US, which comped down 1%. Maybe this is due in part to weakness in tourist spending in the US, but any way you slice it this is a rare guide down for a company linked to the high-end consumer.
W - Wayfair Reports Direct Retail gross sales increased 76%, overall company gross sales increased 51% year-over-year for long weekend including Thanksgiving and Cyber Monday
M - Bloomingdale’s to open NBA in-store pop-ups
FirstData: Holiday spend up 3.2%; Christmas Eve busiest spending day
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