LULU's single-brand nature causes volatile sales cycles and prevents long-term compounding; the speaker dropped it from his portfolio.
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And Lululemon has been a real learning lesson for me on this show. It's a company that some will know I I pitched about a year ago and was quite excited about, but the entire thesis moved against me and I felt there was no other choice than to just drop it from our intrinsic value portfolio.
And and to be fair, both Daniel and Kyle had warned me about their hesitations around Lulu and investing in retail in general and I pushed ahead anyways.
And so Lulu though is trying to do something very different from Walmart, of course, as a premium athletic wear brand. But the most important difference is that Lululemon is a single brand.
They're not a marketplace of brands and single brands will inevitably have the popularity and and coolness of their products fluctuate over time making for a very volatile sales cycle and no real ability to be a true compounder in the long term.
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