Lululemon_ a fantastic buy and hold investment – lululemon athletica inc. (nasdaq_lulu) _ seeking alpha

The world of retail is an ever-changing place with consumer habits appearing to shift almost endlessly. Yoga types list Because of this it is easy to whack a label on something as being fad. Yoga hatha youtube But sometimes fads or trends turn into something more, and that’s what we think has happened with Lululemon Athletica (NASDAQ: LULU). Open doors yoga duxbury The apparel retailer blossomed thanks to the sudden emergence of the activewear trend. Yoga jobs boston Thankfully, though, for the company, this trend looks more and more like it will (or perhaps already has) become a staple in the apparel industry.

Thai yoga We believe this makes Lululemon a great buy and hold investment.

The last few years may not have been easy for the company due to several PR disasters including the infamous ” Pantsgate.” Then of course there was the inventory issues caused by the West Coast port delays, which led to heavy discounting of its stock. Yoga exercises to lose weight on thighs Not only did this threaten its margins, but it also threatened the premium brand image it had done so well to develop. Yoga paducah ky Unsurprisingly, this has caused its share price to perform incredibly inconsistently over the last five years as you can see below.

But with the company steering well clear of any further PR disasters and having its inventory well under control, we believe Lululemon is ready to move forward and take its share price higher.

According to NPD Research, U.S. Yoga for diabetes pbs apparel sales grew 2% in 2015. Bikram yoga edmonton south But if you exclude activewear from these figures, apparel sales would have fallen 2% on 2014’s figures. Weight loss yoga bob harper With a 16% rise in activewear sales in 2015, clearly this is the part of the apparel industry to be in.

The great news is that the strong growth in the activewear industry is predicted to continue for the foreseeable future. Amazing yoga poses As the chart below shows, courtesy of Forbes, global activewear sales are expected to be over $350 billion per annum by 2020. Svaroopa yoga poses chart As a market-leader in the industry we believe Lululemon is positioned better than anybody to profit from this growth.

But strong growth prospects bring strong competition. Yoga everyday for a month Under Armour (NYSE: UA), Nike (NYSE: NKE), and even Beyonce are fighting for market share. Indian yoga music Despite this we think the Lululemon still has the edge due to its marketing techniques. Bikram yoga flatiron schedule Brand ambassadors, free yoga classes, and community engagement all promote the brand and drive that all-important customer loyalty.

Often when we talk about Lululemon we hear objections about the price of its products. Yoga funny images Lululemon is by no means cheap. Gentle vinyasa flow sequence With everyone from Target (NYSE: TGT) to Kmart (NASDAQ: SHLD) producing their own activewear, some investors fear that consumers will switch to lower-priced substitutes. Yoga calgary marda loop Whilst this may well be the case for some, we remain confident in our belief that consumers are willing to pay a premium for Lululemon.

Recent research has shown that health and wellness is regarded by millennials to be the new luxury. Ashtanga yoga shala According to Fflur Roberts from Euromonitor, “younger consumers see more value in transformational experiences than material goods […] it’s very much a status thing as well, people want to show that they care about their bodies and self-preservation.” This bodes well for Lululemon. Benefits of bikram yoga poses Yes, its prices may well be higher than its competitors, but its target market is willing to pay these prices just like the previous generation was willing to spend large sums of money on luxury branded goods. Videos de yoga para principiantes en casa Like Fflur Roberts says, if you’re serious about fitness, you want to show it. Yoga with adriene youtube 30 days We don’t believe these consumers will wear Kmart-made activewear – they’re going to wear something that gains attention and the respect of their peers.

Overall we feel confident that the stage is set for Lululemon to deliver on its target of hitting $4 billion in sales by 2021, almost doubling sales in less than five years. Jivamukti yoga schedule Although at 33 times trailing earnings its shares may appear expensive, we believe its growth over the next few years more than justifies the premium. Yoga facial exercises for wrinkles Thanks to the growing global demand for activewear, next year we have forecast for Lululemon to deliver earnings per share of $2.54. Beginner yoga poses Based on a reasonably conservative valuation at 30 times earnings, we have a target price of $76.20 for Lululemon. Yoga meditation quotes This is approximately 11% higher than the last close price of $68.64.

As long as the company stays clear of any PR disasters, we feel confident that it is onwards and upwards from here. Sunstone yoga The last five years may have been a little turbulent, but the next five should be a smooth ride higher in our eyes.