On October 24th, we suggested that Lululemon was a favorable alternative to Nike, given its low valuation and better revenue trajectory. Since that time, Lulu has materially outperformed. Lulu shares gained 7.25% through last Friday, November 29th, versus a 4.02% total return of the S&P 500 and a .34% decline for Nike. A common mistake investors make is taking profits too early, ignoring the old investment adage "let your winners run." Still, as Lulu's quarterly earnings report approaches, the company reports Wednesday, December 4th, after the close, investors may be concerned that the stock could give back its recent outperformance.
