🎉 We've launched our new mobile app! Learn about it here

Lulu’s Upward-Facing Dog


Image source:

What's going on?

Shares of athletic-wear brand Lululemon stretched 11% higher on Friday, thanks in part to better-than-expected quarterly results.

What does this mean?

Canadian Lululemon started from the bottom 20 years ago – as a design studio by day cum yoga studio by night – and now it’s here, growing sales of its iconic yoga pants by a quarter more than the same time last year. Helping to beat investors’ profit expectations, Lululemon’s Chinese business and ecommerce segment both grew by 50% compared to a year ago. And Lululemon’s predicting even more lemonade: the company increased its own sales and profit forecasts for the rest of the year.

Why should I care?

For markets: Activewear’s getting pumped.

(Millennial) consumers’ shifting of their spending to experiences over products might actually benefit sellers of athleisure products. When consumers are shopping, they’re perhaps more likely to spend on products for experiences – like yoga pants for yoga classes – even if they don’t attend. It’s a trend that’s likely benefited other sporting goods companies, too. While Lululemon’s stock has doubled so far this year, Nike’s has risen by 31%, Adidas’ by 25% and Under Armour’s by 43%.

The bigger picture: I’d rather be anything than ordinary please.

Things are looking good for specialty apparel retailers, but less so for retailers of everyday wear, according to analysts at investment bank Morgan Stanley. On Wednesday, they said that Inditex (owner of fast fashion stores Zara, Bershka and others) was once “world class”, but looking much more “ordinary” these days. Morgan Stanley advised its clients (i.e. investors) to sell shares of Inditex, as its future growth is likely to slow down as the company matures and online competition strengthens – and its stock fell by 6%.

Originally posted as part of the Finimize daily email.

The top 2 financial news stories in 3 minutes. Join over 400,000 Finimizers

Read next

Please Hold For World (Australian) Domination

Sign up to Finimize

Get the two most important global financial news stories each day. Sent at midnight UK time.

Get started with one email a day

The top financial news stories in 3 minutes.