Q: I am wondering if you can share your insights on recent developments with Lulu and whether you would be growing a position as price is down from their high, or sit and wait considering the less than ideal news lately.
5i Research Answer:
We have been a big fan of LULU over the years. The recent slowdown in sales growth was due to a combination of a slowdown in consumer spending (which should recover), and intensifying competition (lots of start-up and emerging brands such as Gymshark, Alo, etc.). We think the brand of LULU is strong and still has a long growth runway, especially in the international market. We are okay to add some here.