Daily Brief: Lululemon Gets Into Pre-Pandemic Shape, But With Post-Pandemic Problems

Daily Brief: Lululemon Gets Into Pre-Pandemic Shape, But With Post-Pandemic Problems

over 2 years ago3 mins

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Lululemon reported better-than-expected quarterly earnings late on Wednesday, as the high-end athleisure brand works its ath off to get back into pre-pandemic shape.

What does this mean?

Lululemon’s ecommerce business had a great run last quarter, though that’s hardly a surprise given all the online shopping habits people have picked up over the last year. What’s really got people talking is the return of bricks-and-mortar shopping, with sales at Lululemon’s stores almost back to levels not seen since the beforetimes. Between the on and the offline, the company’s revenue climbed 61% compared to the same time last year. And all those hard yards seem to be paying off: Lululemon’s on track to beat its 2023 revenue target by the end of this year.

Outpacing expectations

Why should I care?

For markets: Don’t slow down.

Investors sent Lululemon’s shares up 13% following the update, but they might not want to put all their money into lycra just yet: the company has been dealing with supply delays since the pandemic’s last wave, and any new spikes could make it even more difficult to get sweatpants through the door. And while some of the company’s Asian factories are set to reopen later this month, local outbreaks and global shipping slowdowns can’t be ruled out just yet.

Lululemon stock
Source: Google Finance

The bigger picture: Come fly with EasyJet.

At least all those Lululemonheads are finally able to head out on a much-needed yoga retreat: airlines have been making a comeback after a year languishing on tarmac. EasyJet in particular is reportedly set to raise $1.4 billion by selling more of its shares, which the UK-based budget airline is hoping will help it build up package holiday offerings and better compete with its rivals. One ticket to Bali, please.

Keep reading for our next story...

The ECB Is Slowing Down Its Bond-Buying Program

ECB image

The European Central Bank (ECB) announced on Thursday that it’s planning to slow down its bond-buying program, as the region proves it’s just about ready to stand on its own two feet.

What does this mean?

Central banks around the world rolled out measures to help keep the pandemic-driven economic disaster at bay last year, and the ECB was no different: it’s been buying roughly $95 billion worth of bonds every month ever since. Now, though, the region’s economy is well and truly in full swing, growing by a better-than-expected 2.2% last quarter versus the quarter before. That puts it on track to reach pre-pandemic levels by the end of the year, so now seems like as good a time as any to take off the training wheels…

Closing the gap

Why should I care?

The bigger picture: The EU’s not out of the woods yet.

The ECB was quick to point out that it wouldn’t withdraw support fully any time soon – until March 2022, at least. That might not be such a bad idea: European manufacturers are still trying to deal with blocked up supply chains and the higher costs that come with them, while the recent spike in coronavirus cases is threatening to knock the region’s recovery off balance.

For markets: High risk, no reward.

The ECB’s bond-buying program might’ve kept Europe’s economy afloat over the past year, but it’s also driven the region’s bond yields to record lows. Even junk bonds – debt issued by companies most at risk of not paying it back – are now paying out less in interest than the inflation rate. In other words, investors are actually losing money on them for the first time ever, even though their higher risk is usually offset by bigger payouts. Then again, there aren’t exactly many better options in the bond market these days...

Europe bonds


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