Professor Elam

Sept 1 2016 Thursday

Thank goodness for Lululemon.

Female students need not worry about he stigma of wearing reasonably priced togs to yoga class. Yep the hey day of $100 yoga pants and $50 tops has arrived.

But is Lulu  stock a bit pricey at 30 times earnings?

this is an example of how reading for context can make students more aware of accounting terms and their use.

Consider this excerpt

The athleisure market, which Lululemon pioneered, is more crowded than ever. Hundreds of brands have jumped on the bandwagon, with most selling apparel at far cheaper prices. That has hurt Lululemon's gross margins in recent years, pushing them below 50% in four of the past five quarters.

Fetching more than 30 times projected earnings over the next 12 months, Lululemon's multiple has swell-ed from under 20 times in November, its lowest since 2009. The stock is richer than Nike or Adidas AG.

Underdog is a difficult pose to maintain.