Stretchy pants have taken over the world. Not a fan of Spandex but want to get in on the action? Consider investing in Lululemon, the company that sparked a global fashion revolution often called “athleisure,” permanently blurring the lines between spin-class attire and everyday street clothes. This guide will analyze the most important facts about the retailer, explain how to buy Lululemon stock, as well as provide you with an overview of the best brokers to use.
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What is Lululemon?
Lululemon is credited for inventing yoga pants, introduced in 1998 in their first store in Vancouver, Canada. The idea reportedly came to the company’s founder when he attended a yoga class in 1997, where he noticed the instructor sporting something resembling “slinky dance attire” that fitted like a second skin, inspiring him to mass-produce his own vision of the ensemble.
Since the inception of yoga pants, the company has trademarked its original stretch fabric Luon with more nylon microfibre (as opposed to the typical polyester blend), followed by several more specialized materials such as moisture-wicking, compression, and odor-reducing fabrics.
In June 2020, Lululemon acquired MIRROR (now Lululemon Studio), a fitness startup that produces an interactive mirror with a camera and speakers for at-home workouts, capitalizing on a growing trend (initially catapulted by the COVID-19 pandemic) of virtual exercise instead of going to a gym.
Recommended video: How Lululemon Dominates High-End Active Wear
Lululemon IPO
Lululemon went public through an initial public offering (IPO) in July 2007, raising $327.6 million—Lululemon stock trades on the NASDAQ exchange under the stock symbol LULU.
With Can$41.24 billion, the “athleisure” maker is the 14th largest Canadian company by market capitalization as of 2023.
How to buy Lululemon stock: Step-by-step process
Lululemon is a publicly-traded company, which means you can buy LULU stock through a broker. The steps involved in purchasing Lululemon shares are summarized in detail in the following section.
Step 1: Choose a broker
To buy Lululemon stock online, you’ll need a brokerage account. While several platforms are available, the one that suits you will depend on your investment style (long-term buy-and-hold strategy or active day trading) and needs (e.g., whether you want to trade more advanced financial products such as options). When assessing brokers, consider the following features:
- Fees: Brokerage fees are a type of fee collected by brokers to execute your transactions or provide specialized services. Fortunately, today, the vast majority of online brokers offer commission-free stock and exchange-traded funds (ETF) trading;
- Security: Pick a trustworthy broker by ensuring it is fully licensed by state regulatory authorities as well as FINRA and registered with the Securities and Exchange Commission (SEC);
- Trading tools: Active traders may prefer brokerage accounts with all the bells and whistles. Some brokers offer fully customizable platforms with comprehensive analysis tools or access to additional data for an extra cost. If such additions are unnecessary for your purposes, avoid paying extra for them. It’s typically a good idea to look for a user-friendly platform with a competitive fee structure if you are new to stock trading. A dedicated section with investing tips and tricks is a bonus;
- Access to market data: You should search for a platform that allows access to solid market research and reporting tools to help you trade confidently with updated data;
- Fractional stock trading: Fractional shares allow investors to buy stock or ETFs by the dollar amount instead of the number of shares; especially helpful for investors who don’t have unlimited capital but want to build a diversified portfolio or are looking to set up a dollar-cost averaging strategy.
Where can I buy Lululemon stock?
Thanks to various online brokers, access to the stock market has never been more accessible as well as affordable. However, choosing the right broker optimized for your needs (investing goals, educational tools, trading style) is critical for a stress-free trading experience.
To securely invest in Lululemon and buy LULU stock, consider Interactive Brokers (IBKR), which offers:
- Commission-free stock trading;
- Global stock-trading on 90+ market centers;
- Fractional shares available;
- Extra income on fully paid shares;
- Lowest financing rates for margin accounts in the industry;
- No account minimum.
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-
Highly trusted multi-asset broker with clients in over 200 countries
-
Trade on 150 markets globally from a single platform (stocks, ETFs, futures, currencies, crypto & more)
-
Low commissions starting at $0 with no platform fees or account minimums
-
Easily fund your account and trade assets in 26 currencies
-
IBKR pays up to 4.58% interest on cash balances of $10k or more
Step 2: Fund your account
Once you have decided on a broker, it’s time to fund your account. Remember, it can sometimes take up to three days for the money to reach your account.
Step 3: Research the company
When investing your money in the stock market, research is crucial. Of course, the best place to start your research on a stock is to go through its public filings with the SEC. Fortunately, as a publicly traded company, Lululemon’s quarterly (form 10-Q) and annual (form 10-K) earning reports, SEC filings, shareholder presentations, as well as recent press releases can be accessed directly from the Lululemon investor relations section.
Within those reports, you can find details on Lululemon’s financial performance and strategies for the future, as well as information about challenges facing the company or industry as a whole, such as the continued impacts of the pandemic, inflationary pressures, and supply-chain disruptions.
After weighing both the expected risks and rewards, decide whether you want LULU stock as part of your investment portfolio.
Step 4: Decide how much you want to invest
Now that you’ve decided that Lululemon stock is the right choice for you, you’ll need to determine how much you want to invest.
The amount of money you invest depends on the stock price and the number of shares you want to buy. If the share price of a stock you’re interested in is financially out of reach, you can also explore fractional shares. Fractional shares allow you to purchase shares on the dollar amount you’re comfortable with, so you may end up with less than a whole share, a whole share, or more than a whole share.
Because investing can have unpredictable returns, it’s essential only to invest what you can afford to lose and to be mindful of your risk appetite.
Step 5: Place your order and buy Lululemon stock
Once you decide on the number of shares or the dollar amount you’d like to purchase, you can place your order. If you’re working with an advisor, tell them you’d like to buy Lululemon stock and how much you can invest, and they’ll do it for you. If using a brokerage account, simply log in and enter the ticker LULU in the search bar.
There are a few different execution options to choose from, including:
- Market order: A market order is an order to buy the stock at the current market price that is generally executed immediately (subject to availability);
- Limit order: A limit order is processed once the stock reaches your specified price. For example, imagine you want to buy Lululemon stock at $350 or lower. You would then set the limit price at $350, and the order will only execute when the stock reaches the set price or lower;
- Options contract: Options speculation allows for leveraged positions in a security at a fraction of the cost of the underlying asset. A call option allows the trader to profit if the price of the stock increases, and a put option enables them to profit if the stock price declines. Remember, derivative instruments can only be traded on a margin account, which typically has higher minimum balance requirements than standard brokerage accounts.
Step 6: Monitor your investment
While momentum is constantly shifting in the fashion industry, the activewear market worldwide is still expected to grow. In fact, the size of the global sportswear market is forecast to increase from $379.77 billion in 2022 to over $455.42 billion by 2027.
And though Lululemon is one of the brands driving this growth, it is still paramount that investors monitor the company’s financial health, sporadically checking indicators such as revenue and net income and keeping up to date with relevant press releases as well as keeping an eye on the fashion (“athleisure” and activewear in particular) industry performance (and factors that can influence it, e.g., a pandemic/consumer trends), as well as overall economic conditions.
You may also want to track the performance of similar stocks in the industry for comparisons, such as Nike (NYSE: NKE) or Under Armor (NYSE: UAA).
Lululemon stock price
Should I buy Lululemon stock?
Besides looking at Lululemon’s fundamentals, you can use technical analysis to evaluate the company and identify trading opportunities in price trends and patterns seen on charts.
This gauge displays a real-time technical analysis overview for your specified timeframe. It can be a valuable technical analysis tool for many traders by simplifying trading decisions by demonstrating the real-time recommendations of popular technical indicators such as moving averages and oscillators.
Disclaimer: TradingView does not recommend trading financial instruments based exclusively on the advice of the Technical Rating indicator. These recommendations cannot predict future movements and are meant as assistance for spotting potentially favorable buy/sell conditions if this is consistent with their strategy.
Common mistakes to avoid when investing in stocks
Mistakes are expected when investing in stocks but can be avoided if you recognize them. For an in-depth guide on investing mistakes, we have compiled a list of 17 common mistakes and tips for preventing them. But, for now, let’s list some of the most typical ones:
- Not performing your due diligence on the stock;
- Having unclear financial goals;
- Attempting to time the market;
- Failing to diversify;
- Letting your emotions rule the investment decision-making process.
How to sell Lululemon stock?
You can sell Lululemon stock if you see the company performing differently than expected or after reaching your desired financial goal.
If you’re working with an advisor, they can create a sale order for you. However, if you have your own broker account, simply log on, navigate to the stock’s detail page, input the number of shares or dollar amount you want to offload, and tap sell.
Pros and cons of buying Lululemon stock
So, now that we’re familiar with Lululemon and how to buy its stock, let’s explore the pros and cons of investing in it.
Pros
- Comfort is in: From gyms to offices, “athleisure” has taken the fashion industry by storm;
- Shift into new markets: Lululemon is finding new growth drivers as it expands into additional markets, such as workwear and remote workout gear (Luluslemon Studio);
- Growing revenue even as competition grows: Q3 2022 compared to Q3 2019 saw net revenue increase by $940.8 million, or 103%, representing a three-year compound annual growth rate (CAGR) of 27%;
- Loyal customers: Through a unique blend of guerilla marketing, Lululemon has been able to create an almost cultish following. So while prices are steep compared to the competition, people continue to religiously purchase their apparel because they want to be a part of Lululemon’s carefully crafted brand community;
- Continued funding into research and development: Lululemon maintains an R&D facility called “Whitespace,” integrating technology, neuroscience, physiology, and biomechanics to create high-performance garments that stand out from rivals.
Cons
- Macroeconomic conditions: Lululemon’s growth rates seem solid, but it isn’t immune to inflation. In addition, poor economic conditions might turn some customers away due to the brand’s hefty price point;
- Fierce competition: The popularity of yoga pants has, predictably, led to a flood of competitors as brands fill every market segment, from fast-fashion brands like H&M to industry behemoths such as Nike and Adidas;
- Potentially adverse environmental effects that might turn away an increasingly environmentally-conscious consumer: Sweat-wicking athletic wear and other synthetic garments shed microfibers when laundered, which then are washed into natural waterways, eventually reaching the sea and damaging marine life;
- No dividends: LULU does not pay dividends to its stockholders.
Important
In conclusion
At the intersection of comfortable style and sportswear is “athleisure”– the hybrid clothing category built upon ease of wear and technical materials, catalyzing a new generation of versatile garments that look just as good at the gym as anywhere else. Further accelerated by the COVID-19 pandemic, the category has changed people’s approach to fashion. And at the heart of this shift is Lululemon.
However, the market is stiff with competition from both mass-market retailers and as well as athletic clothing companies, not to mention industry heavyweights such as Nike and Adidas.
So, as always, remember to do your own independent research and have solid risk management tools in place before entering the market. Ultimately, the goal of investing is to make money over the long term, so investors should focus on where companies will be ten years from now rather than short-term fluctuations in the stock market.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about how to buy Lululemon stock
What is Lululemon?
Lululemon is a yoga-inspired, technical athletic apparel retailer that designs garments for yoga, running, cycling, and other training activities for women and men.
How to buy Lululemon stock?
Lululemon is a publicly traded company, and its stock is available on the NASDAQ exchange under the stock symbol LULU, which means you can buy shares of Lululemon through your brokerage account.
Is Lululemon stock a buy?
Whether Lululemon is a suitable investment should be based on your risk tolerance, portfolio size, financial goals, and market experience. So always conduct your due diligence before trading. Also, note that past performance doesn’t guarantee future returns.
Where to buy Lululemon stock?
You can buy Lululemon stock in Canada through a licensed stockbroker such as Interactive Brokers.
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