It's Thursday September 9th. Welcome to Marketfoolery. I'm Chris Hill with me today the one and only bill man. Good to see you. Thanks for having me on Chris. It's nice to see you buddy. Good to see you as well, my friend. We've got beer. We've got games. I mean, not really. Really. We're going to talk about beer and games. We're going to be bad. This game. This show is going to be awesome. We're going to start with the

stock of the day. Shares of Lululemon, Athletica, up 13% this morning hitting an all time high after a monster second quarter report. And I know the default thinking for a lot of people, myself included when they hear Lululemon, they think, well, this is women's apparel. This is a women's brand. But a big part of the story today and really over the last couple years has been the way Lululemon has grown their men's business.

And by the way, Lululemon for men is fantastic. It's absolutely fantastic stuff. Yeah, and they came out and they said sales were up strongly in the women's and men's categories, which make you wonder what other categories they have. I don't I don't recall they're being Lululemon for pets. But that's pretty, that's right. It's pretty much the categories. They did great up 61% and this is even so about a

third of Lululemon's supply chain, their manufacturing is in Vietnam, which is suffered all sorts of shutdowns due to COVID. So they have had supply chain issues. And yet they have still absolutely crushed it. And they don't see this as being a COVID phenomenon. I mean, obviously, who amongst us isn't sitting around in more comfortable clothes than usual.

But they see this as being a long, live trend because they their guidance was very, very strong.

And part of that guidance was hinting at updating guidance that they gave in 2019. Around the men's line, which was we're going to double our men's line by 2023. And the language we got today was, it's almost certainly going to be sooner than that. And it could be as early as

you know, basically they said, check back with us after the holidays. We'll update you then. But it all signs point to them being early on doubling their men's business.

Yeah. And again, this is not a segment. It's like, hey, it's now a couple guys. And you know, in 2023, it's going to be a couple more guys. These are meaningful amounts of revenues for for Lululemon. The other thing. So it's really interesting to me. Lululemon has been one of the really the select few apparel retailers that's absolutely

thrive during the pandemic. So much so that they made that transaction of, you know, they bought mirror. And they're also now talking about how they're going to integrate that into into more of the lifestyle part of what, you know, of what of what Lululemon is. It's absolutely an aspirational brand. And more and more people seem to be aspiring to Lululemon because their guidance on every level was fantastic on top of really great results.

It'll be interesting to see over the next few months. I just think back to the holiday season last year. And so much of Lululemon's marketing was built around mirror and built around sort of that.

Obviously, it was a recent acquisition for them. They were really pushing it, you know, sort of trying to dovetail on what Peloton's been doing. I'll be curious to see if they repeat that this year because it's not to say that that.

The mirror hasn't worked for them, but it's it's obviously more nascent than their established business lines, it is. And we have seen, we have seen a number of companies that have attempted to integrate technology into their existing line of goods under armor and Nike, probably at the top of the list. One was much more successful than than the other at doing so.

So this is still this is still a complex bet for them, but because Lululemon's stores are still getting great foot traffic. What they've been doing is putting store within a store. They've got 500 stores now. And by the end of this year by Christmas, 40% of them will have mirror store within the stores. So they're really doubling down on the technology component of what of what this business can be.

Last thing before we move on, how expensive is this stock that when you're on a valuation basis, obviously it's a good day for Lululemon shareholders when the stocks hitting an all time high. Do you look at it and think it's particularly expensive?

I think for me, and it may, how to really put this, I think that I think that fashion has such a trend of boom and bust that Lululemon is a company that has been serially underappreciated and undervalued over a period of time.

Their returns now over a 15 year period are sensational, absolutely sensational. They're moving internationally in a much bigger way than they have been in the past. Yeah, the stock is pretty expensive based on current earnings. And there is that fashion risk that should always be in the back of your mind for any company like this.

But Lululemon is a monster and they have been executing and they've been shifting to meet fashion trends and driving fashion trends now for the better part of a decade, which is really a rarity.

GameStop's second quarter loss was wider than expected. They are growing sales, but shares of GameStop falling 8% this morning.

And the fact that their executives aren't taking questions on the conference call and they're not talking about their plans for turning the business around, that is not helping. That is absolutely not helping matters.

It's so great for us to be able to talk about actual results from GameStop under any circumstances because GameStop, GameStop, all it's been a fad, it's been a meme, it's been a cause for a certain type of investor.

So it is somewhat rare. I actually went to jump onto the call yesterday was supposed to start at 430 Eastern time. I hopped on to the call at like 441, which is usually the time by which the company in a call has done all of their disclosures and the call was over.

It was totally over. It was like they were on for nine minutes. No questions, no, nothing. Now I guess in some ways because management is aware that GameStop stock has not really had much to do with operations. Maybe they're just playing true to type, but this was in fact a money losing company in 2019.

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