Core Viewpoint - Investors are becoming pessimistic about Lululemon, which may present a buying opportunity as the stock has declined significantly despite the company's potential for growth in international markets [2][12]. Group 1: Current Stock Performance - Lululemon's stock is down approximately 60% from its highs at the beginning of 2024, while the overall market is benefiting from AI growth [2]. - The brand is facing challenges such as slowing growth in North America, increased competition, and macroeconomic headwinds [2][4]. Group 2: Company Growth and Strategy - Despite recent challenges, Lululemon's revenue grew over 7% year-over-year last quarter, with a notable 22% growth in China [5]. - The company is expanding its product offerings beyond athleisure, including running shoes and accessories, which could enhance its market position [6]. - Lululemon is investing in international expansion, including a new store in Milan, indicating a commitment to growth in Europe [7]. Group 3: Financial Metrics and Valuation - Lululemon maintains high profit margins of over 23% over the last 12 months [6]. - The stock is currently trading at a low P/E ratio of around 12, suggesting it is undervalued relative to its historical growth [12]. - The company is increasing its stock buyback program, having spent $430 million last quarter to reduce shares outstanding, which should positively impact earnings per share [9]. Group 4: Long-term Outlook - Lululemon is expected to grow its revenue at an annual rate of 5%-10% for the remainder of the decade, despite current market challenges [8]. - The combination of a cheap valuation and ongoing stock buybacks may instill confidence in long-term investors [12].