Lone Pine Capital founder Steve Mandel (Trades, Portfolio) took a new stake in leading athleisure company Lululemon Athletica (LULU, Financial) on Jan. 15, purchasing 6,446,607 shares at $55.71 each.
Lululemon is well-known for ushering in the era of wearing yoga pants and workout clothing in life outside the gym. The company has inspired other high-end athletic wear brands that aim to compete in the industry. Lululemon’s stock is down 13% over the past year and up 5% year to date. As of Tuesday morning, it traded at 31x earnings.
The purchase comes after Lululemon revised its fourth-quarter guidance upward, saying it now expects EPS in the range of 78 to 80 cents, up from previous guidance of 75 to 78 cents. CEO Laurent Potdevin said in the press release that Lululemon had a successful holiday season, which may have contributed to the revision. The graph below shows the company’s annual diluted EPS.
For its third quarter ended Nov. 1, Lululemon saw comparable store sales increase by 6% on a constant currency basis, and net revenue increased 14% year over year.
Bloomberg previously reported that Lululemon had struggled with distribution and inventory management, which required incremental markdowns to clear apparel off the shelves.
Consumer cyclical stocks are the second-largest sector represented in Mandel’s portfolio, as the guru is no stranger to retail companies. Mandel also holds stakes in Amazon.com (AMZN, Financial), Nike (NKE, Financial) and Ulta (ULTA, Financial).
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