Lululemon Athletica Inc 
LULU has partnered with Fanatics for a new line of NHL apparel.
Shares of the athletic apparel retailer rose 2.0% on Tuesday.
The new product line, which includes pants, hoodies, shirts, crew and waist packs, will feature eleven NHL teams this year and will expand to all teams in the 2025-26 season.
These products will be available at selected Lids stores and at Shop NHL starting October 29th.
“This new collection represents a pivotal moment in how we connect men and women with the teams they love, bringing them together in style and comfort through a truly premium assortment,” said Low Ah Kee, CEO of Fanatics, in a statement today. Note.
Lululemon stock is experiencing a perfect storm
Lululemon stock reacted positively to NHL news on Tuesday.
But it remains difficult to ignore the harsh reality: Sales at this high-quality sportswear company are slowing, and if estimates are anything to go by, there doesn’t appear to be a significant turnaround in sight, at least in the near term.
Lululemon forecasts revenue of up to $10.48 billion for 2024, an annual increase of 8.9% that would mark the slowest revenue growth since 2019.
I remain cautious about buying Lululemon stock following this NHL news also because sports apparel is a very competitive market.
This Nasdaq-listed company competes against the likes of Nike, Adidas, Puma and even Under Armour.
Add to that an environment of fearful consumers, and it starts to look like the perfect storm for a sportswear company that primarily sells high-end products.
Lululemon wasn’t innovative enough
Partnering with the National Hockey League seems like an enticing and exciting idea, but let’s face it: a consumer-facing company like Lululemon Athletica runs the risk of being priced out if it fails to innovate.
And this is where LULU disappointed investors in 2024.
Lululemon had to discontinue production of its “Breezethrough” leggings this summer following negative customer reviews.
So, this Vancouver-based company has been slow to launch new ideas and products, a concern that many analysts have expressed in their recent research notes.
At the time of writing, Wall Street set an average price target of $311 for Lululemon shares, which indicates no potential for significant upside from here on out.
Finally, Lululemon Athletica Inc shares have gained nearly 30% since the start of August, which makes me question whether much of the good news has already been priced into its stock price.
