lululemon athletica: Introducing Patel’s Pricing Playbook: Raising Estimates on Strong 2Q Data
Needham: "We are introducing Patel's Pricing Playbook for lululemon. Using proprietary algorithms, we collected & analyzed data on ~2,000 products on LULU's website on a weekly basis over the past year. Given digital sales are 22% of total, we believe this data is an important indicator of inventory and margin health. Our big takeaway -- discounting for 2Q18 was well-controlled and better than 1Q18 across multiple women's and men's categories. We have increased confidence that LULU's strong 1Q performance carried through to 2Q, and accordingly raise our 2Q comp, GM, and EPS ests. We remain on the sidelines on the stock given its significant outperformance and premium multiple. In this report, we detail SKU counts (full-price and promotional), pricing data, and discounting trends for 12 of LULU's product categories (across women & men's, bottoms & tops)."