On Thursday, Franklin Street Advisors disclosed that it sold out its entire position in Lululemon Athletica during the third quarter in an estimated $22.8 million transaction.
What Happened
Franklin Street Advisors reported in a Securities and Exchange Commission filing released on Thursday that it exited its entire stake in Lululemon Athletica (LULU -0.81%) during the third quarter. The fund sold all 95,891 shares, resulting in an estimated transaction value of $22.8 million for the period ended September 30, based on average prices.
What Else to Know
The fund's Lululemon Athletica position previously represented 1.4% of AUM.
Top holdings after the filing:
- NVDA: $132.2 million (7.6% of AUM)
- MSFT: $115.2 million (6.6% of AUM)
- AAPL: $110.4 million (6.4% of AUM)
- GOOGL: $91.2 million (5.3% of AUM)
- AMZN: $72.5 million (4.2% of AUM)
As of Thursday afternoon, Lululemon shares were priced at $174.09, down 36% over the past year and well underperforming the S&P 500, which is up 16% during the same period.
Company Overview
| Metric | Value |
|---|---|
| Price (as of Thursday afternoon) | $174.09 |
| Market Capitalization | $20 billion |
| Revenue (TTM) | $10.9 billion |
| Net Income (TTM) | $1.8 billion |
Company Snapshot
- Lululemon Athletica offers athletic apparel, accessories, and footwear for women and men, with core products including pants, shorts, tops, jackets, and fitness-related accessories.
- The company generates revenue through a mix of company-operated stores, direct-to-consumer e-commerce, and select wholesale and licensing arrangements.
- It targets health-conscious consumers and active lifestyle enthusiasts, with a strong presence in North America and expanding international markets.
Lululemon Athletica Inc. is a leading global retailer in athletic apparel, with a robust e-commerce platform. The company’s strategy emphasizes expanding its omnichannel footprint.
Foolish Take
North Carolina-based Franklin Street Advisors’ decision to liquidate its $22.8 million position in Lululemon Athletica underscores growing investor unease with the retailer’s slowing U.S. growth and declining profitability. The sale follows a rough year for the athletic apparel giant—Lululemon shares have dropped 36% over the past 12 months, sharply lagging the S&P 500’s 16% gain.
In its second-quarter 2025 results, Lululemon reported revenue up 7% year over year to $2.5 billion, driven by 22% international growth, but Americas sales rose just 1%, with comparable sales down 4% in the region. Meanwhile, operating income fell 3%, and margins contracted 210 basis points to 20.7%. CEO Calvin McDonald admitted U.S. execution was disappointing but said the company remains confident in its long-term plan to rebalance merchandise and accelerate growth.
Lululemon said it expected modest 3% to 4% revenue growth for the third quarter and warned that higher tariffs could contribute to annual gross profits falling by roughly $240 million. For investors, the stock’s pullback could signal an opportunity—but only if management delivers on its turnaround and global momentum offsets domestic weakness.
Glossary
13F assets under management (AUM): The total market value of securities reported by institutional investment managers in quarterly SEC Form 13F filings.
Liquidated: Sold off an entire investment position, converting it to cash.
Omnichannel footprint: A business strategy integrating multiple sales channels, such as physical stores and online platforms, for a seamless customer experience.
Direct-to-consumer e-commerce: Selling products directly to customers through a company’s own online platform, bypassing third-party retailers.
Wholesale: Selling goods in large quantities to retailers or distributors, rather than directly to end consumers.
Licensing arrangements: Agreements allowing another party to use a company’s brand, technology, or products for a fee.
TTM: The 12-month period ending with the most recent quarterly report.
