Lululemon is getting boot-stomped early Friday after the company.... wait for it... beat earnings estimates and guided lower than Wall Street's official estimate for the first quarter and all of 2025. 

There are a few reasons investors shouldn't have been shocked by LULU's soft guide. "Beat and Guide Lower" has been the theme of retail earnings for over a month, as featured in this article called "Beat and Guide Lower' is 2025's Hottest Trend". Lulu flagged weakness in North America a year ago, way before it was hip and the stock has been a murder-pit ever since. Which is also not a secret and something I discussed earlier this week.

Lulu is who we thought they were but that's not proving to be a good enough reason for buyers to step in as the stock probes the bottom of a multi-year range in between $300 and $400 (save for a few spikes):

A few thoughts:

LULU's Growth Problem Is Real

Since 2021 LULU has grown revenues at a CAGR of 19%, expanded margins 170bps and increased EPS from ~$4.50p/s to over $14p/s. In 10yrs Lulu grew its men's business from a...

Ending a correction is a process. Hoping for a capitulation Crash is natural but a bit of a sucker's game and sort of misses the point. Getting into a crash is the same process only bigger. It's like ranking tornados; some are big, some less so but the sequence is always the same.

An Unquantifiably large negative confluence of negative catalysts starts to form. Uncertainty is bad but most people buy the dip. But then the news gets worse. And relentless. The selling builds steam as consumers and businesses start missing/ guiding lower. Indices fall (>10% or it doesn't count) but the damage is way, way worse under the surface. There is no place to hide.

[Emotionally the short version is 1. "Buying the dip, thanks for the free money, Market". 2. "I'm still up huge and can ride this out" 3. "I should have taken some profits" 4. "It's that idiot's fault I'm losing money and I hate Bankers/ Traders / Shorts and this is all a scam" 5. "Capitalism has failed. I'm selling and living in an RV"]

Then we bottom.

We've checked a lot of the required boxes for a bottom to at least get started at this point. The market is still wobbly but the brutal, indiscriminate...