Lululemon’s revenue growth in North America should quickly turn the corner.
Her China and other international income have many future growth opportunities.
The shares sell at a cheap price and the management buys shares.
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It has been difficult to sleeve in recent years Lululemon Athletica(Nasdaq: lulu) Investors. Although the extensive market indicators are growing rapidly, the retailers’ reserves have decreased by 20%over the last five years and 52%of the highest level of all time.
Revenue growth has slowed down significantly when new competitions participated in the market when the total cost of consumer athletes was slowing down. Pessimism gradually became involved in the price of shares, sending its price to income ratio (p/e) for almost 10 years.
Despite this pain and insufficient performance, I think Lululemon has the opportunity to reserve 10 times to shareholders over a long period of time. That’s why.
The first 2022 Lululemon’s North American income increased by 29%a year. 2025 In the first quarter, the number was constantly decreased to 4%. This is the main factor that determines the decline in the price of Lululemon shares. Wall Street is very concerned that the brand has reached saturation in the US and Canada, along with major Copycat brands competition.
New brands may have some truth stolen by some customers who would have gone to Lululemon, but data does not support that this is the major reason for this huge income growth. NikeLast quarters decreased by 11% per year and athleta 8%. Lululemon grows until the race is shrinking. That is why the leadership stated that so far 2025 Acquired part of his product category, which is attributed to the highest quality athletic outfit.
So what causes income to slow down? Pandemia and work at the top of the house, releasing Lululemon, releasing athletics. Now, this trend is partially changing, which affects Lululemon growth. Looking at a longer image, more casual Athlesure clothes have taken official clothing for decades. I hope this will last when this pandemic reversion is over.
Lululemon, as a market share of the market share, should be able to speed up income growth in North America as soon as it happens. This is still a small US clothing market player who is believed to have $ 359 billion annual spending.
Image Source: Getty Images.
America still has 73% of Lululemon’s net income, although the region is much lower than the percentage of overall clothing sales worldwide. This gives Lululemon a clear way to grow in the international year for the coming year.
In the last quarter, the Chinese continent has increased 22% per year to 368.1 million a year. USD. This barely does the date of the 1.4 billion people. At the same time consumer spending in China was injured by that An apple; Nevertheless, Lululemon growth in China looks fantastic, which should be a positive signal to investors.
Growth was solid in other markets, and revenue from North America or China increased by 17% to $ 328 million a year. USD. In places such as Australia, other Asian countries and Latin America Lululemon have many opportunities to grow the highest quality Athlesure brand. The segment of both China and the rest of the world should continue to increase the total percentage of Lululemon’s revenue, which would be a useful wind that helps change this slow income growth.
Put the potential of North America, China and the remaining segments of the world, and I believe Lululemon can generate a consolidated double -digit income growth over the next decade, although it has only increased in the last quarter of a constant currency.
Ycharts Lulu PE ratio data.
Today, Lululemon’s revenue is slightly less than $ 11 billion a year. Due to the factors discussed above, I think Lululemon’s revenue may double or triple over the next 10 years.
We need a few more factors to increase the stock price to increase the higher. On the one hand, Lululemon has constantly increased its profit margling tape due to its price determination power in high -end athletes. Imports to the US tariffs can lead to this progress in the near future, but I do not see any reason why the further scale will cause further brand profit margins.
Second, Lululemon is constantly buying its unpaid shares for this cheap price. In the last three years, its shares have fallen by 6%. This may not seem like that, but the stable decrease in the number of shares can be another way to make a complex interest in magic to increase the return of stock by connecting the negative direction alone. As Lululemon’s shares do not decrease, its shares should rise even more over the next 10 years.
Finally, Lululemon shares sell a 16.6 p/e ratio, at their lowest level in the last 10 years. As income growth in speed, this increase in income should begin to normalize to a long -term average, which will further receive juice stocks.
This will not happen due to any increased revenue line, but Lululemon can 10x shareholders due to constant growth, margin expansion, stock purchase and multifaceted development combination over the next 10 years.
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Brett Schafer has no position in any of the above shares. Motley fool is positions and recommend Apple, Lululemon Athletica Inc. and Nike. The Motley fool has a disclosure policy.
Lululemon Stock is now beaten, but it could 10x initially released by The Motley Fool
