Lululemon Athletica (LULU) analysis
Lululemon Athletica Inc.
Sector:Consumer Discretionary · Athletic Apparel
Country:Canada / United States
Profile and moat
Lululemon sells athletic clothes meant to be worn outside the workout as well. Nike, Adidas and newer brands, such as Alo and Vuori, sell into the same use. It did not create the category by decree. Nulu is a fabric it sells. It is not a patent that closes the market. This report does not state a gross margin.
It sells mostly in its own store and on its own site. Wholesale exists too. If inventory does not sell, there is a markdown, and the markdown takes the margin. One market, China or another, can slow. The community is marketing: the customer can leave for another brand.
Cash follows that sale minus the garment left in the store. A strong fashion year is not normal earnings. It is not a 55 percent margin.