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Lululemon Hidden Challenges

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Image by lululemon athletica via Flickr

Lululemon Athletica Inc (LULU) announced blow out Q3 numbers. The stock popped to 52 week highs. The press release begs more questions than provides answers. Yes the increases are dramatic. The question becomes what do you do to sustain the growth. Very little information about the future was provided.

Currently Lululemon relies on their own stores. This is very capital-intensive. To continue growing they will need to make inroads with major retailers and set up either in store boutiques or become another offering. No real discussion of the issues. How do investors look into the future.

Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post.