By Lululemon Athletica Inc (NASDAQ: LULU) has teamed up with Fanatics on a new lineup of NHL apparel.
Shares of the athletic apparel retailer are up 2.0% on Tuesday.
The new line of merchandise that includes pants, hoodies, shirts, crews, and belt bags will feature eleven NHL teams this year and will expand to all teams in the 2025-26 season.
These products will be available at select Lids stores and Shop NHL from October 29th.
“This new collection is a pivotal moment in how we connect both men and women to the teams they love – bringing them together in style and comfort through a truly premium assortment,” Low Ah Kee, the chief executive of Fanatics said in a statement today.
Lululemon stock is seeing a perfect storm
Lululemon stock did respond positively to the NHL news on Tuesday.
But it remains hard to shy away from a harsh reality that sales are slowing down at this premium athletic apparel company and if estimates are to be believed, it looks like a meaningful reversal is not in sight, at least in the near term.
Lululemon expects up to $10.48 billion in revenue for 2024 – a year-on-year increase of 8.9% that would mark its slowest top-line growth since 2019.
I remain cautious in buying Lululemon stock on the heels of this NHL news also because athletic apparel is a very competitive market.
This Nasdaq-listed firm is up against the likes of Nike, Adidas, Puma, and even Under Armour.
Couple it with a timid consumer environment and it starts to look more like a perfect storm for an athletic apparel company that primarily sells premium-priced products.
Lululemon has not been innovative enough
Teaming up with the National Hockey League sounds all upbeat and exciting but let’s face it: a consumer facing company like Lululemon Athletica runs the risk of being left out if it fails at innovation.
And that’s where LULU has disappointed investors in 2024.
Lululemon had to discontinue its “Breezethrough” leggings this summer following negative reviews from customers.
So, this Vancouver-headquartered firm has been a laggard in launching new ideas and products – a concern that many analysts have expressed in their recent research notes.
Wall Street has an average price target of $311 on Lululemon stock at writing that does not indicate potential for a meaningful upside from here.
Finally, shares of Lululemon Athletica Inc have gained close to 30% since early August that makes me question if much of the good news is already factored into its share price.
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