Publicly Available Research
We have established dedicated research coverage of several companies, including Academy Sports*, Adidas*, Amer Sports, Arhaus*, Deckers*, Dick’s Sporting Goods*, Floor & Decor*, Lululemon*, Nike, On*, Restoration Hardware, Tractor Supply*, Under Armour*, VF Corp*, and Williams Sonoma*. You can find the respective landing page for each company using the drop down box. Further, we have provided examples of research that we have written on several other companies below.
We are currently in the soft launch of a subscription service for dedicated research of the retail and consumer industry. Companies with an asterisk* next to their name are available only to subscribers. We will slowly transition the bulk of our public coverage to the subscription model over the coming months but will always provide all of our work on Nike and Restoration Hardware free of charge.
OTHER RESEARCH NOTES
Lululemon: All This Board Intrigue Can Drive A Person Lulu - 12/31/25
Tickers: LULU
At one point in my life, I thought Kevin Plank (founder Under Armour) was the king of narrative generation, but it would seem Chip Wilson (founder Lululemon) has surpassed him by a mile. Chip has practically refined his image into a modern day “Rocky” story by now and everybody (in the all-important Americas segment of Lululemon) likes an underdog that’s been training for over a decade to take out the status quo. Nobody cares about the massive shareholder value delivered by Calvin McDonald, all the current Board seems to hear is “Rocky, Rocky, Rocky”.
That’s kind of the problem here. It’s one thing to set high level strategy (which is what the Board does) and it’s another thing to execute that strategy (which is what CEOs do). Outsiders really don’t know where the failure is, but as we discuss in this note, the Board has largely boxed themselves in on this topic. We are almost certain Chip has been waiting on the sidelines for this one moment, but he is correct to question the current situation in our opinion.
This note is unusual as we dig deeply into the corporate governance of Lululemon. We assess the slate of directors proposed by Chip, which quite frankly seem highly difficult to find much fault with on surface level. We look at the activist Elliott and seriously wonder why of all people they seem to think that Jane Nielsen should lead a company that most would agree has a product problem. But most importantly, we talk about the current Board of Lululemon, where there surprisingly are a lot of perspectives from the consumer staples world for a consumer discretionary company. However, we also find it a bit confusing how an $11 billion revenue company with positive revenue growth and 20% EBIT margins (despite tariffs) is the new definition of “weak” (according to the current market narrative), especially when they are still gaining market share.
The potential Lululemon stock timeline that we proposed in our September note remains somewhat on track. The only difference is the unforeseen proxy war that Chip hinted at and then proceeded to subsequently launch since we last wrote. That got the sell-side upgrade cycle happening a bit earlier than expected (particularly with super bears) but there is a long way to go on that topic. We had previously hoped for Jonathan Cheung to be at the upcoming ICR meetings but at this point investors deserve a chance to meet Andre Maestrini since they almost certainly won’t be meeting Marti Morfitt (Chairwoman) – probably the person Chip is most directly going after. Highly recommend that she also does some investor meetings like the one I personally hosted in Boston when Glenn Murphy (former Chairman, CEO Gap, etc) managed a similar transition.
We continue to believe the reasonable range of EPS outcomes this year is $12.75 to $13.40 (same range as our note from September). We also continue to believe there is a significantly wide range of potential outcomes in 2026, although we are incrementally warming up to the more optimistic scenarios.
Fashion Island: A “Tight Fit” For Athleisure - 12/16/25
Tickers: ADDYY, AS, DKS, GAP, LEVI, LULU, NKE, ONON, UAA VFC
There are many one hit music wonders from the 1980’s so am willing to bet that most have forgot the song “Fantasy Island” from the group “Tight Fit”. Makes us think about how most have also forgotten the countless new “Athleisure” brands over the past 20+ years that many were highly convinced at the time would ultimately become the next Lululemon. The one that resonates the most to us is Kit + Ace, which used to have a store in “Fashion Island” mall, Newport Beach. That specific case study is extra interesting: the founder of Lululemon, Chip Wilson, with ample resources and relationships just couldn’t make the brand work despite a premium price positioning in one of the wealthiest cities in the entire world. This selective amnesia across the investment community today is likely the reason why several brands have all been able to attempt a similar strategic position for athletic apparel: Arc’teryx, On, and Rhone.
Arc’teryx is most interesting of those names as Chip Wilson is on the Board of parent company Amer Sports, so we understand why he is giving the strategy the “old college try” once again. That said, at least they are doing it in a highly controlled manner where even today most of the product for the sub-brand “Veilance” remains the outerwear that is true to the Arc’teryx brand’s heritage. It is highly debatable just how large the TAM (total addressable market) is for Athleisure apparel product at the high price points we see in both On and Rhone.
Overall mall traffic was worse than last year, and that includes both times we visited the mall this time around (12/7 and 12/12). However, promotional activity was much more controlled this year than last year. We must believe that largely comes down to the tariff situation that makes it incrementally difficult to put lower cost product on sale when you know that replenishment will come at a much higher premium.
We find it strange that both Alo and Rhone are testing the idea of putting out catalogs. It’s an expensive proposition for a product category that has a much shorter purchase cycle and ASP (average selling price) than say the furniture you see in a Restoration Hardware catalog.
As far as who is winning the Athleisure wars, it certainly seems like both Alo and Vuori are not as hot this year as they were last year. Have to admit am very much looking forward to the inevitable IPO’s of both Alo and Vuori. When those S-1 filings come out am going to have ample content to deliver from an independent perspective.
This is our 4th in a series of semi-annual channel check visits to this mall. We have a particular fondness for this mall as its where we bought our very first Lululemon product well over a decade ago. You can find our historical takeaways for all other visits over past two years on X (profile name in the grey box at top of this page).
Ground Zero in the Athletic Footwear Debate - 11/12/24
Tickers: FL, NKE, ONON, DECK, UAA, VFC, ASCCY, ADS-DE, PUM-DE
Nike recently admitted that “the multi-brand environment is very competitive today and it will take time to expand market share”. Newer brands such as On and Hoka have proven formidable competitors, particularly within the Running category. Meanwhile, missteps by Nike have opened the door for traditional niche brands (Asics, Brooks, New Balance) to expand. As the largest retailer of athletic footwear in the US, Foot Locker is ground zero in this once in a generation realignment of the athletic footwear industry.
Good Luck Shorting Costco - 6/25/24
Tickers: COST
So much hate towards Costco on Fintwit recently, primarily based on the valuation multiple alone. Really don’t want to spend time on this name but the noise is deafening. The reality here is that NOBODY shorts a stock professionally based on only a valuation thesis. Just like how value managers won’t buy every stock that is cheap – the overall market tends to need something more. That something can’t be only a macro call as that’s probably the easiest thing to hedge (i.e. there are much better ways to execute that idea).