Lululemon Athletica Inc. (NASDAQ:LULU) and Fanatics have teamed up to create a new line of NHL apparel.
The shares of athletic clothing retailer have risen by 2.0% Tuesday.
This year, eleven NHL teams will be featured in the new merchandise line, which includes pants, jackets, crewnecks, shirts and belt bags. The product will then expand to include all NHL teams by 2025-2026.
From October 29 to November 30, these products will be sold at selected Lids and Shop NHL stores.
Low Ah Kee said today that the new Fanatics collection was a “pivotal moment” in connecting men and women with the teams and brands they support. It brings them together, in comfort and style through an assortment of premium products.
Lululemon is experiencing a perfect storm
The Lululemon shares did react positively on Tuesday to NHL’s news.
It is hard to ignore the fact that this company, which produces high-end athletic clothing, has seen its sales slow down. If estimates are correct, there does not appear to be a significant turnaround in sight.
Lululemon is expecting up to $10.48 Billion in Revenue for 2024. This would be an increase year on year of 8.9%, which would be its lowest top line growth since 2019.
After this NHL report, I am still cautious about buying Lululemon shares. This is also due to the fact that athletic clothing is an extremely competitive market.
The Nasdaq listed firm competes with Nike, Adidas Puma and Under Armour.
It’s a combination of a cautious consumer and a company selling a lot of high-end products that makes it a perfect storm.
Lululemon is not innovative enough
It may sound exciting to partner with the National Hockey League, but let’s be honest: Lululemon Athletica is a company that caters directly to consumers. If it does not innovate it will lose out.
LULU disappointed its investors on this front in 2024.
Lululemon was forced to stop selling its Breezethrough leggings after receiving negative feedback 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’s average price target for Lululemon is $311 at the time of writing. This does not suggest a significant upside potential.
The shares of Lululemon Athletica Inc. have increased by close to 30 percent since the beginning of August. This makes me wonder if all of this good news has already been factored in its stock price.
Can NHL’s deal with Lululemon save its stock from a slump? This post may change as new information becomes available
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