Lululemon Under
Athletica Nike Adidas Armour
Market Cap
($Billions) 2.049 31.221 10.613 1.386
PEG 1.65 1.37 1.47
ROA 18.42% 11.53% 7.19% 10.24%
Operating
Margin 16.55% 13.06% 9.90% 9.98%
EV/EBITDA 23.51 10.056 11.689
ROE 24.50% 17.00% 20.03% 11.25%
PE 50.38 21.25 11.8 34.75
Price/Book 10.61 3.36 2.2 3.53
Date LULU % Change S&P Close % Change
25-Jan-10 29.02 (3.40%) 1,092.17 0.04%
19-Jan-10 30.04 (3.53%) 1,091.76 (3.90%)
11-Jan-10 31.14 (3.50%) 1,136.03 (0.78%)
4-Jan-10 32.27 7.21% 1,144.98 2.68%
28-Dec-09 30.1 (0.46%) 1,115.10 (1.01%)
21-Dec-09 30.24 9.96% 1,126.48 2.18%
14-Dec-09 27.5 1.21% 1,102.47 (0.36%)
7-Dec-09 27.17 0.52% 1,106.41 0.04%
30-Nov-09 27.03 2.27% 1,105.98 1.33%
23-Nov-09 26.43 (0.11%) 1,091.49 0.01%
16-Nov-09 26.46 (2.43%) 1,091.38 (0.19%)
9-Nov-09 27.12 4.79% 1,093.48 2.26%
2-Nov-09 25.88 3.03% 1,069.30 3.20%
26-Oct-09 25.12 (0.83%) 1,036.19 (4.02%)
19-Oct-09 25.33 (0.78%) 1,079.60 (0.74%)
12-Oct-09 25.53 4.93% 1,087.68 1.51%
5-Oct-09 24.33 12.48% 1,071.49 4.51%
28-Sep-09 21.63 (1.37%) 1,025.21 (1.84%)
21-Sep-09 21.93 (10.27%) 1,044.38 (2.24%)
14-Sep-09 24.44 5.66% 1,068.30 2.45%
8-Sep-09 23.13 15.82% 1,042.73 2.59%
31-Aug-09 19.97 (0.30%) 1,016.40 (1.22%)
24-Aug-09 20.03 0.91% 1,028.93 0.27%
17-Aug-09 19.85 (0.85%) 1,026.13 2.20%
10-Aug-09 20.02 1.73% 1,004.09 (0.63%)
3-Aug-09 19.68 11.06% 1,010.48 2.33%
27-Jul-09 17.72 3.63% 987.48 0.84%
20-Jul-09 17.1 19.08% 979.26 4.13%
13-Jul-09 14.36 21.49% 940.38 6.97%
6-Jul-09 11.82 (3.59%) 879.13 (1.93%)
29-Jun-09 12.26 (8.58%) 896.42 (2.45%)
22-Jun-09 13.41 (0.07%) 918.9 (0.25%)
15-Jun-09 13.42 (5.69%) 921.23 (2.64%)
8-Jun-09 14.23 1.86% 946.21 0.65%
1-Jun-09 13.97 10.61% 940.09 2.28%
26-May-09 12.63 11.77% 919.14 3.62%
18-May-09 11.3 (7.00%) 887 0.47%
11-May-09 12.15 (17.91%) 882.88 (4.99%)
4-May-09 14.8 5.34% 929.23 5.89%
27-Apr-09 14.05 (2.09%) 877.52 1.30%
20-Apr-09 14.35 0.63% 866.23 (0.39%)
13-Apr-09 14.26 31.55% 869.6 1.52%
6-Apr-09 10.84 6.27% 856.56 1.67%
30-Mar-09 10.2 21.86% 842.5 3.26%
23-Mar-09 8.37 30.37% 815.94 6.17%
16-Mar-09 6.42 0.94% 768.54 1.58%
9-Mar-09 6.36 41.33% 756.55 10.71%
2-Mar-09 4.5 (21.33%) 683.38 (7.03%)
23-Feb-09 5.72 4.76% 735.09 (4.54%)
17-Feb-09 5.46 (15.48%) 770.05 (6.87%)
9-Feb-09 6.46 (17.39%) 826.84 (4.81%)
2-Feb-09 7.82 15.00% 868.6 5.17%
26-Jan-09 6.8 (5.82%) 825.88 (0.73%)
20-Jan-09 7.22 4.64% 831.95 (2.14%)
12-Jan-09 6.9 (9.09%) 850.12 (4.52%)
5-Jan-09 7.59 (2.57%) 890.35 (4.45%)
29-Dec-08 7.79 5.27% 931.8 6.76%
22-Dec-08 7.4 (9.42%) 872.8 (1.70%)
15-Dec-08 8.17 9.66% 887.88 0.93%
8-Dec-08 7.45 (30.95%) 879.73 0.42%
1-Dec-08 10.79 9.88% 876.07 (2.25%)
24-Nov-08 9.82 18.74% 896.24 12.03%
17-Nov-08 8.27 0.36% 800.03 (8.39%)
10-Nov-08 8.24 (25.23%) 873.29 (6.20%)
3-Nov-08 11.02 (22.23%) 930.99 (3.90%)
27-Oct-08 14.17 28.58% 968.75 10.49%
20-Oct-08 11.02 (19.91%) 876.77 (6.78%)
13-Oct-08 13.76 (29.65%) 940.55 4.60%
6-Oct-08 19.56 (6.41%) 899.22 (18.20%)
29-Sep-08 20.9 (15.66%) 1,099.23 (9.40%)
22-Sep-08 24.78 (0.28%) 1,213.27 (3.33%)
15-Sep-08 24.85 12.04% 1,255.08 0.27%
8-Sep-08 22.18 18.86% 1,251.70 0.76%
2-Sep-08 18.66 (3.67%) 1,242.31 (3.16%)
25-Aug-08 19.37 (3.10%) 1,282.83 (0.73%)
18-Aug-08 19.99 (12.52%) 1,292.20 (0.46%)
11-Aug-08 22.85 3.63% 1,298.20 0.15%
4-Aug-08 22.05 0.14% 1,296.32 2.86%
28-Jul-08 22.02 (12.62%) 1,260.31 0.20%
21-Jul-08 25.2 (12.04%) 1,257.76 (0.23%)
14-Jul-08 28.65 20.63% 1,260.68 1.71%
7-Jul-08 23.75 (13.54%) 1,239.49 (1.85%)
30-Jun-08 27.47 (7.91%) 1,262.90 (1.21%)
23-Jun-08 29.83 5.04% 1,278.38 (3.00%)
16-Jun-08 28.4 1.36% 1,317.93 (3.10%)
9-Jun-08 28.02 (3.65%) 1,360.03 (0.05%)
2-Jun-08 29.08 (9.10%) 1,360.68 (2.83%)
27-May-08 31.99 3.66% 1,400.38 1.78%
19-May-08 30.86 (15.57%) 1,375.93 (3.47%)
12-May-08 36.55 8.62% 1,425.35 2.67%
5-May-08 33.65 7.44% 1,388.28 (1.81%)
28-Apr-08 31.32 (6.40%) 1,413.90 1.15%
21-Apr-08 33.46 5.55% 1,397.84 0.54%
14-Apr-08 31.7 1.99% 1,390.33 4.31%
7-Apr-08 31.08 (7.88%) 1,332.83 (2.74%)
31-Mar-08 33.74 14.49% 1,370.40 4.20%
24-Mar-08 29.47 6.62% 1,315.22 (1.07%)
17-Mar-08 27.64 1.66% 1,329.51 3.21%
10-Mar-08 27.19 17.76% 1,288.14 (0.40%)
3-Mar-08 23.09 (14.16%) 1,293.37 (2.80%)
25-Feb-08 26.9 (10.12%) 1,330.63 (1.66%)
19-Feb-08 29.93 (6.64%) 1,353.11 0.23%
11-Feb-08 32.06 (6.39%) 1,349.99 1.40%
4-Feb-08 34.25 (1.86%) 1,331.29 (4.60%)
28-Jan-08 34.9 13.79% 1,395.42 4.87%
22-Jan-08 30.67 (0.81%) 1,330.61 0.41%
14-Jan-08 30.92 (6.50%) 1,325.19 (5.41%)
7-Jan-08 33.07 (18.43%) 1,401.02 (0.75%)
31-Dec-07 40.54 (15.31%) 1,411.63 (4.52%)
24-Dec-07 47.87 0.82% 1,478.49 (0.40%)
17-Dec-07 47.48 5.84% 1,484.46 1.12%
10-Dec-07 44.86 7.19% 1,467.95 (2.44%)
3-Dec-07 41.85 14.13% 1,504.66 1.59%
26-Nov-07 36.67 (6.31%) 1,481.14 2.81%
19-Nov-07 39.14 (6.23%) 1,440.70 (1.24%)
12-Nov-07 41.74 4.12% 1,458.74 0.35%
5-Nov-07 40.09 (14.61%) 1,453.70 (3.71%)
29-Oct-07 46.95 (6.96%) 1,509.65 (1.67%)
22-Oct-07 50.46 (8.64%) 1,535.28 2.31%
15-Oct-07 55.23 27.49% 1,500.63 (3.92%)
8-Oct-07 43.32 (2.12%) 1,561.80 0.27%
1-Oct-07 44.26 5.31% 1,557.59 2.02%
24-Sep-07 42.03 5.36% 1,526.75 0.07%
17-Sep-07 39.89 16.71% 1,525.75 2.80%
10-Sep-07 34.18 (4.79%) 1,484.25 2.11%
4-Sep-07 35.9 5.37% 1,453.55 (1.39%)
27-Aug-07 34.07 (0.87%) 1,473.99 (0.36%)
20-Aug-07 34.37 4.34% 1,479.37 2.31%
13-Aug-07 32.94 (8.88%) 1,445.94 (0.53%)
6-Aug-07 36.15 16.61% 1,453.64 1.44%
30-Jul-07 31 1,433.06
1.8089
Beta: 1.809
Risk Premium: 4.50%
Risk Free Rate: 3.65%
D/C: -%
Tax Rate: 35%
Bond Rating: AAA
Spread: 0.50%
Cost of Equity: 11.79%
Cost of Debt: 4.15%
WACC: 11.79%
Terminal Beta 1
Terminal D/C 30%
Terminal WACC 6.5143%
2004 2005 2006 2007 2008 2009
stores 21 38 52 83 113 119
stores added 17 14 31 35 6
stores closed 5
new sq footage 47600 86800 126000 184800 114800
old sq footage 58800 106400 145600 232400
new store $/sq foot 738 738
same store $/sq foot 1450 1450
same store growth 19% 25% 34% 0% 0.00%
Store Revenue 347,478.00 421,702.40
Internet 42,170.24
Other 4,858.96 6,009.00 7,966.76
Total Revenue 40,748 84,129 147,964 269,942.00 353,488.00 442,598.43
Growth
ave 1450 of sales per sq foot on stores open at least 1 year
ave store is 2800 sq ft
I used the # of old sq ft (stores opened before 07 that had to be more than 1 year old)
store rev 08 (total rev - other rev (no internet then)) $1450 per old sq foot and new sq ft
to get new $ per new square foot of 738 adding in internet it was pretty close to
predicting 09 numbers with no same store growth
a couple analysts reports have said 200 to 300 stores in US would be there saturation point
lulu did not give guidance on this so I used that number + 50 in canada
assuming that they are pretty much saturated in canada already with 42 stores there and canada's relative size to the US mar
terminal store growth I added in largely to factor some growth abroad
I factored same store growth into the sales per sq foot
I set internet rev to start at 7% of revenue as it was over first 3Q of 2009 having it then grow by the same amount as compara
I just had other rev grow 2 percent year over year as the company say this should not grow much in terms of percentage of th
2010 2011 2012 2013 2014 2015 terminal
149 179 209 239 269 299
30 30 30 30 30 30
Adding about 1.5% more stor
100800 168000 168000 168000 168000 168000 per year + comparable store
316400 333200 417200 501200 585200 669200 growth of 2% should give
Terminal growth of 3.5% whi
738 800 800 900 900 1100 is what I used
1595 1738.55 1877.634 2009.06838 2129.612483 2236.093107 2280.815
10% 9% 8% 7% 6% 5% 2%
579,048.40 713,684.86 917,748.90 1,158,145.07 1,397,449.22 1,681,193.51
Clearly biggest factor driving
48,495.78 52,860.40 57,089.23 61,085.47 64,750.60 67,988.13 overall is comparable store
8,763.44 9,552.15 10,316.32 11,038.46 11,700.77 12,285.81 growth or increasing # of store
636,307.62 776,097.41 985,154.45 1,230,269.01 1,473,900.60 1,761,467.45 added.
30% 18% 21% 20% 17% 16%
347502400
anada's relative size to the US market
w by the same amount as comparable store growth in the future
much in terms of percentage of the business and should decreas if the rest of the business grows
Adding about 1.5% more stores
per year + comparable store
growth of 2% should give
Terminal growth of 3.5% which
is what I used
Clearly biggest factor driving
overall is comparable store
growth or increasing # of stores
added.
LULULEMON (LULU)
ANALYSTS: DINA MODEL, ALAN Key Model Assumptions
JIANG, RYAN KREITZER Beta 1.81
Market Risk Premium 4.50%
Risk Free Rate 3.65%
Tax Rate 35%
Cost of Equity 11.79%
After-tax Cost of Debt 2.70%
WACC 11.79%
Terminal WACC 6.51%
Terminal Growth Rate 3.50%
Projected
1 2 3 4
2010E 2011E 2012E 2013E
(in 000s)
Revenues 636,308 776,097 985,154 1,230,269
% Growth 27.5% 22.0% 26.9% 24.9%
COGS 312,561 376,407 472,874 584,378
% Growth 35.3% 20.4% 25.6% 23.6%
Margin 49.1% 48.5% 48.0% 47.5%
Gross Profit 323,747 399,690 512,280 645,891
Margin 50.9% 51.5% 52.0% 52.5%
SG&A 190,892 228,949 285,695 350,627
Margin 30.0% 29.5% 29.0% 28.5%
Operating Income (EBIT) 132,854 170,741 226,586 295,265
Margin 20.9% 22.0% 23.0% 24.0%
Taxes 46,499 59,760 79,305 103,343
Effective Tax Rate 35.0% 35.0% 35.0% 35.0%
Net Income 86,355 110,982 147,281 191,922
Margin 13.6% 14.3% 15.0% 15.6%
+ D&A 12,726 15,522 19,703 24,605
% of Sales 2.0% 2.0% 2.0% 2.0%
- Capex/R&D 74,030 90,294 114,616 143,133
% of Sales 11.6% 11.6% 11.6% 11.6%
- Change in NWC 12,726 15,522 19,703 24,605
% of Sales 2.0% 2.0% 2.0% 2.0%
Free Cash Flow to Firm 12,325 20,688 32,665 48,789
Present Value Factor 100.00% 89.45% 80.02% 71.58%
Present Value of FCFF 12,325 18,506 26,138 34,923
Terminal Value
Present Value of TV
NPV of Operating CF 10.2%
NPV of Terminal Value 89.8%
Value of Operating Business
Add: Cash
Less: Debt
Equity Value
Common Shares Oustanding
Implied Fair Value Per Share
Current Share Price
Upside Potential
Projected
5 6 7
2014E 2015E Terminal
1,473,901 1,761,467 1,849,541
19.8% 19.5% 3.5%
692,733 819,082 850,789
18.5% 18.2% 3.5%
47.0% 46.5% 46.0%
781,167 942,385 998,752
53.0% 53.5% 54.0%
412,692 484,404 499,376
28.0% 27.5% 27.0%
368,475 457,982 499,376
25.0% 26.0% 27.0%
128,966 160,294 174,782
35.0% 35.0% 35.0%
239,509 297,688 324,594
16.3% 16.9% 17.6%
29,478 35,229 36,991
2.0% 2.0% 2.0%
171,478 204,934 215,181
11.6% 11.6% 11.6%
29,478 35,229 36,991
2.0% 2.0% 2.0%
68,031 92,754 109,413
64.03% 57.28% 51.24%
43,560 53,127 56,060
3,756,911
2,151,863
244,640
2,151,863
2,396,503
101,832
-
2,498,335
70,320
$35.53
$28.24
25.8%