Q: What to do about LULU? I have half positions in LULU, BKNG and BYD. It appears that there has been a shift in consumer spending to frugality and, if so, sell, hold LULU or move funds to one of the others to full positions or move to another discretionary stock?
5i Research Answer:
We don’t think the fundamental of LULU’s business is impaired, there may be some hiccups along the growth trend. Although competition is heating up from start-ups, like Alo and Gymshark, overall LULU’s brand name is well-recognized and its international potential is largely untapped. We would not sell LULU here, and we are okay to hold LULU and even add to the position if prices drop further.