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- 1. lululemon athletica A Look into 2012
- 2. Meet LULU • http://bloom.bg/vZ0k4P#ooid=gyb2g1NDpH5 XHXwELNDM92chibNaEj46
- 3. Why LULU? » History of growth » Outperforming our competition » Outperforming performance standards » Potential for growth » Who’s in already
- 4. GROWTH: Historical Heights 1000.839 1000 800 711.704 $ Thousands 600 452.898 353.488 400 272.713 184.063 200 121.847 30.842 39.363 58.281 0 2008 2009 2010 2011 2012 Net Income Net Revenue
- 5. COMPETITIVE STRENGTHS bibbity Premium Active Brand bobbity Distinctive Retail Experience boo Innovative Design Process Culture of Training & Personal Growth Community-Based Marketing Excellent Management
- 6. Outperforming the Competition 60 50 40 Market Cap 30 Debt to Equity 20 ROIC 10 0 LULU Adidas Gap Nike UA
- 7. Outperforming the Competition 10 9 8 7 6 RNOA 5 NOPM 4 NOAT 3 2 1 0 LULU Adidas Gap Nike UA
- 8. LULU v. S&P 500 Performance 27-Jul-07 3-Feb-08 1-Feb-09 31-Jan-10 30-Jan-11 lululemon athletica inc $100.00 $124.64 $24.29 $100.86 $245.04 S&P 500 Index $100.00 $ 95.65 $56.61 $ 73.61 $ 87.48 S&P Retail Index $100.00 $ 87.67 $53.70 $ 82.13 $103.04 NASDAQ Index
- 9. Our Numbers for Your Analysis • LOW Avg. Inventory Turnover • LOW Avg. Days Outstanding • LOW PPE Turnover • NO debt • NO “Off-Balance Sheet” Financing
- 10. Some Risks… » Cost of Materials – “silverescent line” (includes silver threading) » Ability to maintain inventory and distribution channels » Ability to meet technology needs of expanding e-commerce and information systems Thomson Reuters
- 11. The Future is Bright
- 12. The Future is Bright 2.5 2 $ dollars 1.5 Due to heavy capitalization needed to fund growth 1 EPS 0.5 0 2009 2010 2011 2012 2013 2014 Source: Thomson Reuters
- 13. The Future is Bright PROJECTED EPS 150% 130% NIKE 110% 90% UA 70% % Growth 50% GAP 30% 10% ADIDAS -10% -30% Due to heavy capitalization LULU needed to fund growth -50% ‘09-10 ‘10-11 ‘11-12 ‘12-13 ‘13-14 Year Source: Thomson Reuters
- 14. The Future is Bright » Opening Additional 37 Corporate Stores » Repurchased Franchisees » Expanding to London, Australia & Southeast Asia » Focus on E-Commerce Business Revenue has doubled each year since 2009 Source: Thomson Reuters
- 15. Who’s Already In? • ARE WE STILL DOING THIS?
- 16. CHA-CHINGGG
- 17. 77.06 + 1.76
Editor's Notes
- Lululemon’s Competitive StrengthsPremium Active Brand(notes: Customers associate the lululemonathletica brand stands for apparel that incorporate technically advanced materials, innovative functional features, and style. Lulu has roots in yoga but products are increasingly being designed and used for general fitness) Distinctive Retail Experience(notes: Stores are positioned to be an integral part of the community, and sales associates are coached to develop personal connection with guests and receive in-house training. Innovative Design Process(notes: Apparel is high quality and designed for performance, comfort, functionality, and style. Vertical retail strategy can respond to customer feedback in as little as two months)Deep Rooted Culture Centered on Training and Personal Growth(notes: Lulu believes the relationship with their employees is exceptional and a key contributor to their success)Community-Based Marketing Approach (notes: Product differentiation achieved through innovative, community based approach using multifaceted grassroots marketing strategy)Experienced Management Team with Proven Ability to Execute(notes: CEO was at Starbucks for 20 years and most recently served at President of Asia Pacific Group of Starbucks International. Management team has background in retail, design, operations, product sourcing, marketing, and information technology)
- Lululemon’s Competitive StrengthsPremium Active Brand(notes: Customers associate the lululemonathletica brand stands for apparel that incorporate technically advanced materials, innovative functional features, and style. Lulu has roots in yoga but products are increasingly being designed and used for general fitness) Distinctive Retail Experience(notes: Stores are positioned to be an integral part of the community, and sales associates are coached to develop personal connection with guests and receive in-house training. Innovative Design Process(notes: Apparel is high quality and designed for performance, comfort, functionality, and style. Vertical retail strategy can respond to customer feedback in as little as two months)Deep Rooted Culture Centered on Training and Personal Growth(notes: Lulu believes the relationship with their employees is exceptional and a key contributor to their success)Community-Based Marketing Approach (notes: Product differentiation achieved through innovative, community based approach using multifaceted grassroots marketing strategy)Experienced Management Team with Proven Ability to Execute(notes: CEO was at Starbucks for 20 years and most recently served at President of Asia Pacific Group of Starbucks International. Management team has background in retail, design, operations, product sourcing, marketing, and information technology)
- EPS = Net Income less Dividends/Avg Outstanding SharesE-Commerce:2009(less than 1%), 2010(4%), 2011(8%), projected 15% growth next year… also opening discrete websites in U.K., Australia and AsiaOpening Showrooms in London & Hong KOng
- Silverescent line is odor-inhibiting athletic products that are threaded with silver to deter the spread of odour-producing bacteria and fungi in human sweat into accessoriesTalk about “scarcity model” of having “just enough inventory” requiring customers to purchase at full price to obtain product
- EPS = Net Income less Dividends/AvgOutstanding Shares
- EPS = Net Income less Dividends/AvgOutstanding Shares
- EPS = Net Income less Dividends/Avg Outstanding SharesWill be investing heavily in Information Technology opening 37 new stores($70-$75M capital investments)
- EPS = Net Income less Dividends/Avg Outstanding SharesWill be investing heavily in Information Technology opening 37 new stores($70-$75M capital investments)
- EPS = Net Income less Dividends/Avg Outstanding SharesE-Commerce:2009(less than 1%), 2010(4%), 2011(8%), projected 15% growth next year… also opening discrete websites in U.K., Australia and AsiaOpening Showrooms in London & Hong KOng