5 years ago. i bought Lululemon stocks but sold very soon later. .The reason is at the time, I think there’s some quality issue with some pants. it’s too thin and able to see through. and then if you think about it, Lululemon sells some very simple pants and shirts, what kind of durable competitive advantage does it have?
I just looked at LULU"s stock price: a 6 times increase from 5 years ago. I am a bit shocked. 40% annualized. and during the last 3 years, Lululemon 's revenue growth rate was just around 15% to 20% per year! Not bad! Imagine what the Peloton 's stock will do with 100% revenue growth for the next few years?
I belive Peloton and Lululemon belong to the same category of business: It’s a club. It’s a niche. It’s a culture. Peloton is very similar to Lululemon. Both offer simple product yet have very loyal customers. Lots of people will say Peloton sells bikes. What future does it have? You can say the same with Lululemon. Peloton business model is a lot stronger than Lululemon.
My conviction in Peloton just increased a lot after this thought process. I feel more comfortable holding a large position.
You might not be considering the Mirror, which Lulu just bought in the second half of the year? I see that as Peloton + your ‘club’ clothes in one store.
@rtichy You might not be considering the Mirror, which Lulu just bought in the second half of the year? I see that as Peloton + your ‘club’ clothes in one store.
Hi rtichy,
Nowhere did I say LULU and PTON sell the same product. I did not even mention PTON sells apparels. I did say LULU sells shirts and pants and yoga lessons. I did say PTON sells connected bikes and exercise lessons. Isn’t that clearly written? And I observed the similarity between the two in their attributes.
Thanks for the reminder. I looked in the mirror and realized I am too obsessed with money and I should take a break from it. It’s too addictive to watch the networth to go up every month consistently at a high rate. It’s like p*rn.
Rtichy just clarified his reply. He meant Lululemon Mirror home Gym… I literally read that is the mirror in our bathroom. LOL
There are reasons for one of the board rule: No one liner reply. and this can be one of them. Rtichy’s reply is not a one liner but it is ambiguous and can have two meanings. Since I didnt follow LULU for long time. I was not aware of LULU has a product: Mirror Gym. If there’s ambiguity, please be more specific. I’ve read his reply as: “I bought PTON in second half of year which LULU did I buy?”
i am not worried about competitions. As I said, lulu’s current revenue growth is 20% per year and PTON is 100% per year. Numbers speak for themself.