When investors think about 'lockdown stocks' they probably imagine companies that allowed people to connect with one other from their homes, such as Zoom (US:ZM). The company's shares rose sharply in 2020, before crashing back down. However, we shouldn’t forget the retailers. Many US consumers used their pandemic stimulus cheques to outfit themselves in Lululemon Athletica's (US:LULU) pricey yoga clothes.
- Wider operating margin than peers
- Very strong performance over the past decade
- Recognisable brand
- Slowing sales growth
- High price point
- Recent product launch failures
- US consumers under pressure
Lululemon was founded in Vancouver in 1998 and originally designed high-quality yoga apparel for women. It then expanded into a broader range of ‘activewear’ and ‘athleisure’ which people could wear out and about, as well as in the yoga studio. These product ranges were a hit and the group’s growth trajectory was impressive. Between 2012 and 2019, revenue more than trebled to $3.3bn (£2.5bn). Growth stepped up again during the pandemic, with revenue rising to $8.1bn in the year to January 2023.