Q: In an earlier answer you said LULU won't be exempt from tariffs. Does LULU have any production capacity it the US? What amount of their revenues come from the US ( which could presumably be hit by tariffs? Is the tariff threat appropriately baked into current share prices. In short, is this the time to hold, reduce, or run?
5i Research Answer:
LULU has a tiny amount of US production, but most is in Asia. In 2024, $7.6B of $9.5B in sales was in the 'Americas' which is how the company classifies regions. Valuation right now is well below historical levels, so we think the risk is at least partially priced in. We would view it as a buy into any more weakness.