THE KING HAS RETURNED: Davey Day Trader Makes Picking Stocks Look Easy... Again
Jesus rose from the dead, and now, Davey Day Trader has as well.
This is not a drill. Davey Day Trader is back. Dave dusted off the green hammer of death with a DDTG pick from the clouds.
Eight minutes before the close, on the first night of College Football no less, Dave shook the world of high finance to its core…
Lululemon, the company behind the preferred yoga pants of horn dogs everywhere, dropped earnings after the closing bell. And saying its most recent quarter went well would be an understatement…
Davey Day Trader didn't share his thesis, but it probably went something like this…
LULULEMON IS IMMUNE TO RECESSIONS, DOWNTURNS, OR PRETTY MUCH ANY OTHER GOD AWFUL CATALYST THAT HAS BEEN MAKING LITERALLY EVERY OTHER STOCK ITS BITCH.
LULU put on an absolute clinic in being a publicly traded company…
It beat Wall Street's expectations for the quarter by a mile on the top and bottom line. And before you go all "wElL maYbe ItS MaNAGeMenT TEam waS JUsT SanDBaggING," keep in mind that same store sales grew 23% in the quarter. Traffic at stores grew 30%, while e-comm visits jumped 40%. Those are OnlyFans numbers, you guys.
"Well, I bet profit dried up just like every other retailer." - the haters
Nope. Lululemon is to poor people what A&F was to fat people in the early 2000's (spoiler: inaccessible). The affluent (read: no peasants) shopper Lululemon attracts is largely immune to inflation. Which means Lululemon hasn't had to offer deep discounts like pretty much every other retailer. That means it can maintain its profit margins.
For fuck's sake, the company even went full spin zone on its girthy inventory, which rose 85% vs. the same period last year. In most instances that would be a nightmare scenario for a retailer. But not Lululemon in the second quarter of the year of our lord 2022. Leadership said it was thankful for the fuck tons of leggings and other bougie exercise gear piling up in its warehouses after supply chain issues. Why? Because those will come in handy when all the households with in-ground pools and drop top Sebrings in the driveways are looking for holiday gifts. Spoiler: LULU expects to put up big numbers this holiday szn. These guys are good… almost as good as Davey Day Trader.
But wait, there's more…
While pretty much every other company is slashing its full year outlook and making excuses (see: "inflationary pressures," "turmoil in Eastern Europe," and "monkeypox") Lululemon is making it rain. The company Peloton wants to be when it grows up is, you guessed it, hiking its revenue and earnings estimates for the rest of the year.
Honestly, the only surprise is that shares jumped just 9.3% on the news…
Snap necks and cash checks,
Tyler (@JPMorinChase on Twitter)
BTW, Large and I host a weekly podcast called The Family Office. We discuss the biggest finance and markets' stories and are taking you along for the ride as we invest our own money. Watch on YouTube. Or listen on Spotify or Apple.