The Hottest Retailer in 2011

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

We may be just a few trading days into the new year, but it's going to be hard to find a hotter bricks-and-mortar retailer than lululemon athletica (Nasdaq: LULU  ) .

Shares opened higher this morning after the company raised its already-aggressive guidance for its fiscal fourth quarter, which will end later this month.

lululemon, an upscale yoga gear specialist, is now targeting a profit per share of $0.55 to $0.57. It earned $0.40 a share during its previous holiday quarter, and just last month management was telling investors to expect no more than $0.48 a share on the bottom line.

This isn't just a matter of margins stretching like some of its customers on a yoga mat. Sales are booming, with lululemon expecting net revenue of $237 million to $239 million. This is a far cry from the $210 million to $215 million it had originally forecast. Same-store sales are now expected to climb in percentages in the mid- to upper-20s.

I'll give your jaw a few seconds to pick itself up off the floor.

Got it? See if it drops again when I point out that comps actually rose 29% during last year's holiday quarter. This isn't just a company bouncing back from a sandbagged quarter. This is, quite frankly, the hottest retailer that you can buy these days.

It gets better.

The Canadian company has been trouncing Wall Street expectations over the past year, so even last night's guidance may be underselling the juicy truth.

Let's go over the past four quarters.





Q4 2009 $0.40 $0.29 38%
Q1 2010 $0.27 $0.21 29%
Q2 2010 $0.30 $0.24 25%
Q3 2010 $0.36 $0.25 44%

Source: Thomson Reuters.

Selling expensive fitness apparel is a sweet gig during an economic recovery if you're pushing a hot brand. Under Armour (NYSE: UA  ) has also blown past the pros in each of the past four quarters. Nike (NYSE: NKE  ) is three out of four, and simply met guesstimates during the other quarter. Ritzy handbag maker Vera Bradley (NYSE: VRA  ) has more than doubled since going public three months ago.

The love for big-ticket apparel isn't universal, though. Designer denim has had it rough. True Religion (Nasdaq: TRLG  ) has missed Wall Street's profit targets in each of the two previous quarters, and Joe's Jeans (Nasdaq: JOEZ  ) is trading for less than half of its 52-week high. In other words, investors need to be as choosy with their stocks as well-to-do shoppers are with their purchases.

Do you know a hotter retailer? Prove it! Top lululemon in the comments box below.

lululemon athletica and Under Armour are Motley Fool Rule Breakers picks. Nike is a Motley Fool Stock Advisor recommendation. Under Armour is a Motley Fool Hidden Gems pick. The Fool owns shares of Under Armour. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Longtime Fool contributor Rick Munarriz doesn't think he's cut out for yoga, given his inabilities to relax and focus. He even lacks the patience for yoga through Wii Fit. He does not own shares in any of the stocks in this story. He is also part of the Rule Breakers research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Read/Post Comments (1) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 12, 2011, at 3:28 PM, debshirle wrote:

    I love LULU lemon stock. It's been one hell of a ride after my friends sold it and I hung on for the ride. I knew there was more to this spandex than just a small stretch. Yoga forever and LULU too.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1421952, ~/Articles/ArticleHandler.aspx, 10/25/2016 7:14:10 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,169.27 -53.76 -0.30%
S&P 500 2,143.16 -8.17 -0.38%
NASD 5,283.40 -26.43 -0.50%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/25/2016 3:59 PM
DFBG $4.05 Down -0.15 -3.57%
Joe's Jeans CAPS Rating: *
LULU $55.11 Down -1.09 -1.94%
Lululemon Athletic… CAPS Rating: ***
NKE $51.05 Down -0.82 -1.58%
Nike CAPS Rating: *****
TRLG.DL $0.00 Down +0.00 +0.00%
True Religion Appa… CAPS Rating: **
UA $32.89 Down -5.01 -13.22%
Under Armour (A Sh… CAPS Rating: ****