Would You Short This Company?

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1. A specialty retailer trading at 25x earnings.

2. With negative same store sales comps:

Guidance - SSS Comp

3. Expanding into new locations with lower population density and income than current stores (which implies margin pressure going forward):

Market Size per Store

Note: Distinct Market Size per Store is comprised of spending on women’s apparel and sporting goods in a 10-mile radius trade area. Source: Signal Data.

4.  With worldwide online search trends that recently turned negative (side note: if you aren’t tracking worldwide search trends, you are missing out on huge alpha opportunities in the consumer / tech space; the correlation between search to sales is not insignificant – see here):

Google Search Trends

Would you short this company?

To me, the answer is clear: the time to short LULU is now.


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