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Here's How Much a $1000 Investment in Lululemon Made 10 Years Ago Would Be Worth Today

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For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.

FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.

What if you'd invested in Lululemon (LULU - Free Report) ten years ago? It may not have been easy to hold on to LULU for all that time, but if you did, how much would your investment be worth today?

Lululemon's Business In-Depth

With that in mind, let's take a look at Lululemon's main business drivers.

Founded in 1998 and based in Vancouver, Canada, lululemon athletica inc. is a yoga-inspired athletic apparel company that creates lifestyle components. The company designs, manufactures and distributes athletic apparel and accessories for women, men and female youth.

The company offers a line of apparel assortment, including fitness pants, shorts, tops and jackets designed for healthy lifestyle and athletic pursuits, such as yoga, training, and running as well as other sweaty and general fitness under the lululemon athletica brand name. Moreover, its fitness-related items comprise an array of accessories like bags, socks, underwear, yoga mats, instructional yoga DVDs, water bottles and other equipments.

Notably, the company sells its products primarily in North America through a chain of corporate-owned and retail stores, outlets and warehouse sales, independent franchises, and a network of wholesale accounts. Also, the company has an e-commerce site with an aim to rapidly expand its online business.

Additionally, the company has entered into license and supply agreements with partners in the Middle East and Mexico, through which they are permitted to operate lululemon branded retail locations in the United Arab Emirates, Kuwait, Qatar, Oman, Bahrain, and Mexico. Also, they have the rights to sell lululemon products via the company’s e-commerce websites in these countries.

Under these arrangements, the company supplies its license partners with lululemon products, training and other support. While the initial agreement term for the Middle East expires in January 2020, the term for Mexico expires in November 2026.

Furthermore, the company conducts its business through two segments: company-operated stores and direct to consumer.

As of May 2, 2021, lululemon operated 523 company-operated stores.

Bottom Line

While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Lululemon ten years ago, you're probably feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in July 2011 would be worth $6,011.61, or a gain of 501.16%, as of July 21, 2021, and this return excludes dividends but includes price increases.

In comparison, the S&P 500 gained 226.06% and the price of gold went up 9.40% over the same time frame.

Analysts are forecasting more upside for LULU too.

Shares of lululemon outpaced the industry in the past three months owing to solid business fundamentals combined with strong brand positioning in the athletic apparel space as well as continued growth in e-commerce operations, which also aided first-quarter fiscal 2021 results. During the quarter, the company’s top and the bottom line beat estimates and increased year on year. Moreover, the company reported robust growth compared with the first quarter of fiscal 2019. Results gained from growth across regions and rebound in in-store sales. Management noted that the strong business momentum has continued into the second quarter. Further, its financial position keeps it on track to deliver on its Power of Three growth strategy. However, elevated SG&A expense and airfreight costs remain a headwinds, which is likely to persist in the near term.

Shares have gained 6.74% over the past four weeks and there have been 12 higher earnings estimate revisions for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.

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