Leggings are losing their cool factor. That could be trouble for companies that built their business on our love of spandex, says @andreafelsted (via @opinion) https://t.co/Elz4TgwrST ...

What is athleisure in a post-leggings world? The founder of Outdoor Voices thinks it might be equestrian wear https://t.co/jeBd2SQBKD ...

Core Viewpoint - The article highlights three stocks with significant long-term upside potential, suggesting that they could double in value by 2030 due to favorable growth conditions in their respective industries [2]. Group 1: Take-Two Interactive - Take-Two Interactive is positioned in a resilient $190 billion video game industry, experiencing strong financial results and entering a major growth phase [4]. - The company is set to launch the sixth installment of the Grand Theft Auto series in May 2026, which is expected to drive substantial revenue growth [5]. - In fiscal 2026, Take-Two's first-quarter results exceeded expectations, with strong player interest in franchises like Grand Theft Auto and NBA 2K, and success in mobile game expansion [6]. - Recurrent consumer spending, which constitutes 83% of net bookings, grew 17% year-over-year, indicating strong momentum [7]. - Analysts project revenue to reach a record $9.2 billion in fiscal 2027, driven by the upcoming Grand Theft Auto VI sales, with earnings expected to grow at an annualized rate of 42% [8]. Group 2: On Holding - On Holding is outperforming larger activewear brands like Nike and Adidas, showing strong growth and resilience in a challenging market [9]. - The company has low brand penetration in key markets, presenting significant growth opportunities, with only 6% in major U.S. cities like New York and San Francisco [10]. - On Holding's growth strategy focuses on product innovation, brand awareness, geographic expansion, and operational excellence, supported by a robust direct-to-consumer segment [11]. - In the second quarter, sales increased by 38% year-over-year, with direct-to-consumer sales up 54% and wholesale up 29%, alongside the highest gross margin in the industry at 61.6% [12]. - Management aims for a compound annual growth rate (CAGR) of 26% through 2026, with potential revenue growth from $3.1 billion to $9.5 billion by 2030 [13]. Group 3: Lululemon Athletica - Lululemon has faced challenges this year, being the second-worst-performing stock on the S&P 500, down 57% year-to-date [14]. - The company is experiencing weak discretionary spending in the U.S. due to economic pressures and shifting fashion trends away from its core products [15]. - Lululemon has adjusted its full-year guidance and is redesigning its supply chain to adapt to new import tax regulations [16]. - Despite these challenges, the stock trades at a forward P/E of 13, suggesting potential for recovery and doubling by 2030 [16]. - The company is increasing the percentage of new styles in its collection and enhancing its responsiveness to consumer demand [17]. - Lululemon is witnessing strong growth in China, with a 25% revenue increase in Q2, and continues to expand its store presence [18]. - Given its current valuation, the stock has a reasonable chance to double in value over the next five years [19].

RIP leggings. We’re in the Big Workout Pant era now. https://t.co/hELQGmm0iP ...

Market Trends - The market is shifting from leggings to workout pants [1]

RIP leggings. We’re in the Big Workout Pant era now. https://t.co/iRHiKSEPkQ ...

Core Viewpoint - Lululemon is facing significant challenges as customer interest declines and competition from brands like Alo Yoga and Vuori intensifies, leading to increased discounting practices that were previously uncommon for the brand [1][4][19] Company Performance - Lululemon's stock price has dropped 38% in 2023, closing at $238 on July 10, and is down 54% from its all-time high of $516 in December 2023 [11] - The company reported a 7% increase in revenues to $2.4 billion for the first quarter ended May 4, but comparable store sales in North America decreased by 2% [16] - Lululemon has opened at least two dozen outlet stores since 2019, indicating a shift in strategy to attract more customers [13] Discounting and Pricing Strategy - The retailer has begun discounting items at "alarming rates," with markdowns on products such as skirts and jogger pants [1][3] - Historically, 95% of Lululemon's merchandise was sold at full price, but now only about 75% achieves that status [4] Competitive Landscape - Competitors Alo Yoga and Vuori are gaining market share and have expanded their retail presence aggressively, with Alo having 99 stores and Vuori 93 in the U.S. [5][19] - Both competitors have effectively utilized social media and influencer marketing to enhance their brand visibility [7] Product Strategy and Brand Image - Lululemon has introduced bright colors and non-athletic apparel, which have not resonated well with its core customer base, leading to further discounting [8][9] - The company is also focusing on "logomania," prominently displaying its logo on products, which has resulted in a disjointed product assortment [15][16] Operational Adjustments - In response to declining store traffic and economic pressures, Lululemon announced layoffs of 150 corporate employees and cut its profit forecast for the year [18] - The company attributes lower store traffic to economic uncertainty, inflation, and changes in consumer spending habits [18]

Core Insights - Lululemon has opened its first European airport store at London Heathrow, marking a significant step in its global expansion strategy [2][4] - The store is located in Terminal 5, primarily serving British Airways customers, and offers a range of athletic and athleisure apparel [3][7] - The opening aligns with Lululemon's growth plan, 'Power of Three ×2', focusing on product innovation, guest experience, and market expansion [4][10] Company Expansion - Lululemon's revenue has more than tripled from approximately $3 billion in 2018 to over $10 billion in the last fiscal year [4][10] - The company operates in 26 countries and plans to expand into Italy, India, and other markets [5][10] - The new store at Heathrow is part of a broader strategy to explore travel retail as a growth market [5] Market Context - Heathrow Airport is Europe's busiest air hub, serving 83.9 million passengers last year, making it an ideal location for Lululemon's first European travel store [4][8] - The 1,100-square-foot store is expected to attract long-haul travelers, particularly during the summer when demand for fitness-to-fashion items typically increases [8][10] - Lululemon's international market showed the best revenue growth in Q1, with a 19% increase compared to just 3% in the Americas [10] Strategic Partnerships - The store's opening was facilitated by Newmark, a commercial real estate company, which has been involved in the project for over two years [6] - Lululemon's UK and EMEA executive director, Hazel Catterall, has been instrumental in executing the brand's travel retail strategy [6] Customer Engagement - Passengers who are members of the Heathrow Rewards loyalty scheme can earn double points on purchases over £100 ($135) in the new Lululemon store for a limited time [10]

Core Viewpoint - Lululemon is suing Costco for allegedly selling unauthorized and unlicensed apparel that imitates its products, claiming this undermines its brand reputation and goodwill [1][4]. Group 1: Lawsuit Details - Lululemon alleges that Costco's pants, priced at $10, infringe on its ABC men's pants, which retail for $128 [2]. - The lawsuit claims that Costco's Kirkland Signature sweatshirts, sold for $8, copy Lululemon's Scuba hoodies priced at $118 [3]. - Lululemon asserts that Costco misleads customers into believing these imitations are produced by the original supplier [4]. Group 2: Legal Actions and Financial Implications - The company is seeking to recover financial losses through unspecified damages and a court order to prevent Costco from selling the infringing products [7]. - Lululemon has previously taken legal action against copycats, including a lawsuit against Peloton in 2021, which was settled in 2022 [7]. - The company recently reduced its full-year forecast due to a challenging macroeconomic environment, citing increased costs and competition [8]. Group 3: Market Response - Following the news of the lawsuit, Lululemon's shares increased by 2.2%, although the stock has declined by 36% year-to-date [8].

Core Viewpoint - Lululemon's shares dropped approximately 20% following a less optimistic earnings report, primarily due to increased costs from tariffs impacting earnings expectations for the year [1][3]. Financial Performance - Lululemon's revenue increased by 7%, but net income fell from $321 million to $314 million year-over-year in fiscal 2025's first quarter [6]. - Earnings per share (EPS) guidance for the year was reduced to a range of $14.58 to $14.78, down from $14.95 to $15.15 [3]. Impact of Tariffs - The weaker outlook is largely attributed to tariffs imposed by the Trump administration, particularly affecting Lululemon's production in Vietnam, where 40% of its manufacturing occurs [4]. - The tariff rate on imports from Vietnam is set at 46%, which is expected to increase production costs for Lululemon [4][7]. Market Conditions - The company faces challenges from rising production costs due to tariffs and potential dampening of sales from premium pricing, especially in a market with weak consumer spending growth [7]. - Comp sales increased only 1%, falling short of Wall Street's expectations of a 3% increase [6]. Valuation - Following the stock's decline, Lululemon's price-to-earnings (P/E) ratio has dropped to around 17, compared to its historical average of 42 [9]. - The stock is currently trading at approximately 18 times forward earnings based on the low end of the new guidance for 2025 [9]. Competitive Landscape - Lululemon operates in a highly competitive apparel market, contending for market share against brands like Nike and Gap [10]. - Price sensitivity is a critical factor in maintaining competitiveness within the industry [10].