Stock Talk Podcast Episode 343

Speaker A: Foreign. Uh, you are listening to Keystone's stock Talk show, episode 343. It's great to chat with you again. This week we dive into a tale of two Canadian fashion retail stocks. Aritzia symbol ATZ on the TSX versus Lululemon Athletica Inc. Symbol Lulu on the New York Stock Exchange. Both iconic Canadian brands started in my hometown of Vancouver, bc. However, in terms of market returns, it's been a tale of two retailers over the past five years, with the former jumping 275%, while the latter is down 70% over that same time period. I will start with our review of Aritzia, which has been a Keystone focus buy dating back to January of 2029. It has gained 715% since that timely buy. And Brennan, review the slide of Lululemon, which we have reviewed many times on the podcast but elected not to buy. We'll tell you today which provides the best combination of growth at a reasonable price for your portfolio. So let's get to it. We'll get to the show. I'm going to welcome one half of the Killer Bees today. Uh, Brett is here. There's some, uh, gentleman named Willie from Saskatoon that is also joining us. I don't recognize the man. And we're gonna welcome our top free agent signing, Rahil. Welcome, gentlemen. How are you guys doing? Doing well. I'm just gonna say. What happened to your face? Brandon, that's. I can't believe you're looking at today.

Speaker B: I can't believe you made it through the intro without laughing because, I mean, before we went live, uh, I think we were all laughing for about, uh.

Speaker A: Brandon is usually bearded. We can't see his lips. And now he's got some kind of. What is that, a ferret under your lip or something? What is happening?

Speaker B: Big caterpillar.

Speaker A: It is. It, um, looks great, man. Apparently, uh, the world says you've. You've aged 10 years, right?

Speaker B: Yeah, that's, uh. I went golfing with a couple of my buddies and I show up to the golf course and one of them didn't even realize. One of my friends didn't even realize

Speaker A: how they're like, where the hell's Brennan? Is what they said, is Brennan coming?

Speaker B: But he said, brandon, you look five years younger. I kind of like this look on you. So, uh, yeah, you know, the only reason that I'm actually doing this is because, uh, Carly, uh, and I, um, my fiance, we're. We're scraping our, our popcorn ceiling at our new home that we built or that we Bought. And, uh, well, right there.

Speaker A: Shave your beard. That makes sense.

Speaker B: I had to shave my beard because of the respirator. It wasn't fitting over my beard, and I was sucking in popcorn and not the right kind of popcorn. And so, yeah, I had to, uh, to shave the beard, and now I got a mustache for, I don't know, probably at least half a month. But trust me, the beard's coming back.

Speaker A: You should be holding on to that till November.

Speaker B: Right?

Speaker A: Like, I mean, that's a long time. I mean, let. Let's have anybody who wants to reach out in the comments and say, should Brennan hold on to this new look till at least no Movember, please vote yes. That should be the poll question. Please, Brandon, hold on to that mustache.

Speaker C: Shave the mustache. Uh, go full.

Speaker B: Oh, no, no. I. Facial hair is makeup for men, and, uh, I need a little bit of makeup.

Speaker A: So, uh, yeah, maybe we do for Movember. Like, we run a campaign where clients, uh, donate for Brian to shave off completely the mustache and see what he looks like with no facial hair. That's the scary part. What would we have to get to? 2, 10, 5,000? What do we get? Pick a charity. We're doing it.

Speaker B: Yeah, we'll see about that. If we get enough likes and comments, uh, on the. On the.

Speaker A: That would be great. Well, sure. You look wonderful, Brandon. That's right.

Speaker B: Yeah. My fiance says I look like a walrus, so, uh, yes.

Speaker A: Oh, that is so nice. Does she. Does she like it, though?

Speaker B: Um, she thinks that I. I look decent. M. I look younger.

Speaker A: Yeah. I don't know if she wants you to look younger. Well, that's good. Cool.

Speaker B: Well, she's just happy I'm healthy, though, that, you know, I'm not, uh, sucking in, uh, the popcorn dust, so.

Speaker A: Yeah. Sucking in popcorn dust.

Speaker B: Yeah.

Speaker A: Somebody, um, said pre show that we're going to lose some clients over this or some listeners. I mean, uh, or viewers. It would be viewers more because, like. But. But we may gain some in some other side. I think you appeal to. You appeal to a different, uh, genre. Now, we don't know what that is, but we'll see who likes it and who doesn't like it. That's what I'd like to see. All right, let's get to the show. We got a poll question, don't we? And then we're going to get to Aritzia and Lululemon. I'm kind of excited to go through those two.

Speaker C: Yeah. Yeah. So tariffs are back. You. The US is putting tariffs on. On 60 countries. Do you think the tariffs will stick this time? 81 of our listeners said the tariffs won't last, and 19% said tariffs are last, which obviously that's pretty fair. It's. This time it's over forced labor for the broad tariffs. Then we as well have the specific Canadian terrorists, which is over wildfire smoke, which I'd say it's even a bit. Quite a bit more absurd.

Speaker A: Yeah, I mean, it is sad. And we said this pre show that, you know, like, when there are wildfires in the U.S. we send our firefighters down, they send them up here. Um, you know, I. Perhaps we should buy more fire bombers. I'm not sure that's, uh, anything to do with what's going on right now, but, uh, yeah, I mean, it's just. It's just picking any reason let's at this point too.

Speaker B: And it's in super bad taste as well, because from my understanding, we, um, had a helicopter, Canadian helicopter pilot, ah, Lose his life fighting fires in Colorado, uh, early in early July. So it's just, you know, come on. Where we're a team here. Um.

Speaker A: Yeah. No, yeah. I mean, we're laughing about Brennan's face, but this is. This is. It is serious. It's ridiculous like that. Uh, you know, there's. That's being used. But I mean, again, I don't think it has anything to do with wildfires or anything to do with forced labor. It's just tariffs. We, uh, got to find a reason to do it.

Speaker C: Yeah. It just really exemplifies the shift in US Foreign policy when it comes to really isolationism to a point where withdrawing, obviously geopolitically from any like, World Health Organization, obviously all the NATO and defense spending shenanigans there. Then economically as well, it's a very big shift in policy from the wanting, uh, to have globalization for really the last 40 years or more.

Speaker A: Yeah, it'll be interesting to see the midterms. I mean, that'll be something to track for sure, to see if there is, uh, any change there, to see if there's pushback or there's support now. Who knows? We'll see. We'll see what happens, uh, through that. But there's some, like, swing states, border states right now that are hotly contested, and it'll be interesting to see, uh, which way the, uh, you know, they go in these midterm elections. So, I mean, you're gonna see a lot of campaigning on that front right now.

Speaker B: Cbc.

Speaker C: I was just gonna say who tear Brennan's face.

Speaker B: The renovations.

Speaker A: Yeah.

Speaker B: Sorry.

Speaker A: What Was. What was. What was CBC saying? Uh, CBC was saying this episode is Must View. That's all I can say. If you're listening to this TR, try to find this on YouTube and check out Brennan's face. That's all I can say. It's wonderful. Sorry, CBC. I was saying. CBC was saying there would be a minimum hit of $8 billion to Canadian economy if tariffs were implemented from August 19th. I think BC would be the most impacted, um, province. Um, the electronics would have at least a $4 billion worth of hit. And then, plus plastics would have $3 billion worth of it. And then roughly a billion dollars worth of beverage is also at risk.

Speaker C: So.

Speaker A: So overall, we are looking at 8 to 10, $10 billion worth of risk, uh, to Canadian economy. Yeah. And, uh, I mean, they want our strong beer and now they're taxing it more as far as what I understand, but. And hockey sticks. Come on. Yeah, that's really, that's really plastics.

Speaker C: The other hand, though, they're. They're not tariffing energy, potash, critical minerals, the stuff they really don't have that they need because they just don't have either.

Speaker A: But they say they don't need. They say they don't. Certain people say they don't need it. Yeah, they don't need it. Don't need it. But, yeah, it's certainly needed. And that is why Alberta and Saskatchewan is only going to have 1% impact of tariffs, uh, to Canada.

Speaker C: I think.

Speaker A: Major impact would be to Eastern NPCs.

Speaker B: Yes.

Speaker A: Yep. Yep. For sure. All right. Um, do we want to just get into, uh, get into the tale, uh, of two retailers? Incidentally, we are updating. We're not going to talk about the company here today, but we're updating one, uh, company over the course of this week that we interviewed, uh, last week. That's been in our coverage for just over a year now. Company, uh, has done well, but we think there's an opportunity there. So we may be upgrading that company. It's not the same sector. So that's a teaser. If you're a client, you'll get that over the course of this week. Uh, and if you're not a client, become one so you can, uh, get involved with, uh, that business. All right, I'm going to start with Aritzia. Stock trades around $137 today. This is a company in 2019 that we recommended when it traded at 1680. It's obviously done tremendously well over that period. They were founded in 1984, uh, out of Vancouver by the Hill family. Aritzia is a long term growth oriented innovated design house fashion retailer. Exclusive brands targeted primarily at women but they have and women in the 15 to 45 age range. They have moved into men's fashion as well. Through recent acquisitions the company positions itself strategically above mid market and slightly below sub luxury at its own coined market of everyday luxury. Not cheap by any stretch. I know my wallet feels lighter each time I am coerced into entering the store. So definitely not inexpensive but not ultra expensive. So Aritzia now operates around 143 stores across Canada. 67 there. Six seven nice. And uh the US about 76 in addition to an established E commerce platform. Now these are not small stores. The uh company's evolved significantly over time as part of their real estate strategy. Uh historically stores uh averaged around 6,000 to 8,000 square feet. But new boutique targets are footprints of around 10,000. They do have some urban flagship locations. Massive stores in this segment uh ranging from 30,000 to 40,000 plus square feet. They have a Chicago Magnificent Mile store which is over 45,000 square feet. Uh across their entire fleet their average is about 8 to 10,000 square feet. So let's dig into what has been driving the share price gains over the past year. It's up around 65% and uh, really over the last 78 years for that matter matter and that is really just great financial growth. And we could see this is the uh gains over the past year but the growth what is driving that is the financial performance. We'll look at the highlights of the last quarter for a company of this size. 43% revenue growth uh and same store or comparable Same store sales growth in the quarter was 30, 35% 35.1. In the US the growth was the highest 54.5% and the US now comprises around 67% of net revenue. When uh we originally recommended it it was uh far in favor of Canadian uh, uh in terms of their revenue base. Canadian net revenues increased 25% now now comprises around 32.9% of net revenue. The retail net revenue was up 38%. Uh the e Commerce or digital uh now known as digital revenue was up 55.5%. Significant growth there. Let's look at the profitability. Adjusted EBITDA increased 80 and a half percent. Uh and adjusted EBITDA as a percentage of net revenues increased significantly 410 basis points to 20.1%. Uh net income jumped 176.6%. Net income as a percentage of revenue increased 590 basis points to 12.3%. Uh, net income per diluted share also increased to uh, around 175%. Significant growth there. Adjusted net income increased 98.3% and adjusted net income per share 95.9% up to 96 cents per share from 49 in the same period of fiscal year 2026. Let's look at their balance sheet. We can pull that up strong balance sheet. Um, if we look at net debt right now, uh, if we do not include the leases is um, it's positive. So they have a no debt on the books right now and a significant cash position up from it's around 471.9 million up from 292.6 million at UH Q1 2026. Now if we include the total leases, uh, its net Debt is about 608 and a half million. Let's look at their guidance for fiscal year 2026. Aritzia increased its uh, overall outlook upwards. Uh if we see here it's about right now the guidance is for 4.55 to 4.75 billion. That would be in the mid range around, well sorry the range of around 23 to 28% year over year growth. Uh, this is at the high end and 3% above Q1 forecast which was 4.61 billion. The revised forecast of 4.75 billion anchored at the high end of the guidance range reflecting continued strong momentum across the business. Consensus range going into the quarter was 444.44 to 4.66 billion. So the raise was decently above consensus. Let's look at the valuations on the business right now PE on an adjusted basis. If we look at actual numbers for 2026 fiscal year which they just came out of is 4.41.64. So that's definitely a premium. But because of the expected 52% growth in EPS over the course of this year, uh, the company on a forward looking basis based on adjusted earnings is about 27.34 times. And if we look out into 2028 uh, it is 21.7 times. That is optimistic but achievable given the growth rate and the margin increase on the business. So in conclusion here, at the risk of sounding like a brokered record, this was another impressive quarter from Aritzia anchored by strong demand and momentum, outstanding execution, uh, driving sustained sector leading performance. Q1 revenue up 43.4%. Um, sustained essentially by strong same store sales increase of above 35% is 11% unit growth in the quarter as well. We do caution that the same store sales growth will now lap Liberation Day price increases. So they will be lower year over year. But EPS should continue to be considerably higher given the margin improvement in the, the operating leverage there. Um, store openings remain one of the more reliable predictors of revenue growth. Low teens square footage growth through fiscal year 20, uh, 27, strong payback on those stores with margins improving, although the pace of that will slow. Operating leverage is strong and the consensus is for a significant profit jump in both fiscal 2027 and fiscal year 2028. So momentum will continue in the near term. Aritzia has increased 715% since we recommended it in January of 2029. We continue to like it long term based on its growth at a relatively reasonable price. You're not paying the cheap valuations we did back in 2019 or several times as we bought it over the course uh, of the last eight years. But it certainly uh, with the growth that is there right now, it trades at a relatively reasonable range. Uh, and if that growth momentum continues, Aritzia can to grow for sure.

Speaker B: And I mean when I get into Lululemon here, it's just an absolute, you know, opposite world where low valuation, low growth. Um, but like, let me just share my.

Speaker A: It is crazy. It's good juxtaposition. When we go and look at these two companies, um, both well known brands now in the Canadian market, or at least well known stores, the brand is more of a focus with Lululemon it's the stores, the experience within those stores. And they have several brands under the Aritzia.

Speaker B: So this is Aritzia here, um, uh, the, the Keystone Green essentially. And then down here we have uh, Under Armour, Reitman's or Reitmans as well as Nike, you know, just, or Nike. You know, look at the absolute, you know, contrast between uh, you know, the returns here where all of them are, are down over this period and Aritzia's growth has just, you know, driven the stock higher and higher.

Speaker A: Um, yeah, better business, better returns. I mean Nike is a good business, but I mean it's the growth in those businesses and when you bought them trading at a relatively reasonable price. I mean that's the, you know, and then you know, good balance sheets. Uh, you know that, that always helps in this business because there is always a rainy day and you got to monitor the brand too. More difficult. In the case of Ritzia, one of the reasons why we liked it is they have Aritzia is the storefront name but they have several brands under Aritzia within stores. If one is out, you know, you get rid of that brand or you scale back and you push the others under. Um, I think they do a good job of that. I mean it, fashion is fickle. It's very difficult to always be, you know, a go to brand even if you produce good clothing. I mean Lululemon has had some missteps in production and along those steps, but I think they still make a quality product, uh, overall. But you know, it perhaps, I mean there's more competition in the segment as well. But you know it is Lululemon the must the go to athletic brand anymore. And they've also tried to expand in so many different areas.

Speaker C: That gets to be, and correct me if I'm wrong, but in it was September ish 2023, we saw growth slowdown and you just saw the valuation during that time period just collapsed. And remember there being fears around oh, is the brand dead? Effectively. Is it, is it out of fashion now? Effectively.

Speaker A: And that is always the worry. Right? Like that is like, like for, you know, on a trailing basis you're talking about aritzia trading at 40 plus times earnings. They do not get, you know and for, because of the jump in earnings is about 27, 28 times forward now. You don't get that multiple if the growth slows and if people think the growth is going to slow significantly. Right. So uh, that is something you have to monitor with these names because like Lulu always got a premium multiple. Now it's getting a discount significant multiple. And it is all about uh, not executing on growth in my opinion. But Brandon's going to get into um, what you're looking at in terms of Lululemon right now or Lulu.

Speaker B: Yeah. And just on that point too, I think that you know, the fundamental, you know, thought of, you know, how a company gets its valuation is often missed where growth is, you know, one of the most important factors. That's why, you know, our philosophy is growth at a reasonable price. That's what we're looking for. Um, you know, because again we've been like, I'll go through it in my section here, but we get time and time again, you know, on Lulu here the stock is, is down. You know, a lot of individuals think that just because the stock is down that's you know, a screaming opportunity potentially. Um, but again it's that growth factor is missing.

Speaker A: But we get questions on companies like Lululemon. I mean these are well known names like we hear about. Well, should we buy Lulu. Should we buy Nike? Should we buy Gap? And you know, big names that, that many people know, um, sometimes they are good value but you have to look at the underlying fundamentals. But like you know, seven, eight years ago, nobody was talking about Aritzia and you know, you got to buy it because nobody was looking at it at a relatively reasonable price and it was executing far beyond the growth levels of these businesses. And if it kept doing it, you know, that's the gains you can get. We identified another company this time, you know, start of last year. Similar. Yeah. Is there a longer term growth story there as well? Potentially again we're going to be updating

Speaker C: clients and just, I know we're just delaying uh, your Lulu, but uh, just the growth when you're referring to it is growth of earnings and cash flows, not just the top line sales. Especially for these companies. When we've seen some margin compression, sort of tariff and other factors just cost inflation over the last few years, many of them if not most have actually had sales growth increase. So you can't just look, oh, their sales are going up, a lot of times the earnings are going down. They issued shares as well. So your net income and then your EPS is even lower. It just doesn't match that growth story. You need actual cash flow and earnings to be a growth at a reasonable price company.

Speaker B: And that's why like investing in general is such an art because it's like, you know, taking the factor of growth then you know, all of the other risk characteristics or factors that are out there, you know, maybe more the qualitative, you know, gauging. Is it worth paying 11 times forward earnings for this business, you know, potentially. Anyways, what were you going to say?

Speaker A: I thought, I thought, yeah, I was just going to say I thought we'd rag the pocket, you know, delay it a little farther because we're waiting for Brennan to actually get here to present or my beard to grow back actually come in. Yeah. All right, get into it. Take a good one.

Speaker B: Yeah. Okay, so uh, today I'm going to uh, update lululemon Athletica here as we last reviewed the company in fall of 2025, about 10, 10 months ago after the company's then share price was cut in half down to $165 per share. But today the stock trades even lower now down to about 117 or $118. Almost cut in half again. So Lulu or Lulu on the NASDAQ currently trading at that 11750 like I noted and a $13 billion market cap. So the company designs, distributes and retails technical athletic apparel, footwear and accessories for women and men. Under the Lululemon brand. There were 106 or 816 and 811 company operated stores uh, as at 5-3-2026 and 2-1-2026 respectively. And in the last quarter over 66% of revenue came from the Americas, which is U.S. canada and Mexico. And about half of total revenue is coming from the US So like I mentioned, uh, the stock has been absolutely decimated over the past year and a half down over 70% from its 2025 peak. This has primarily been due to fierce competition and the fact that, you know, as we noted, their growth machine has stalled, moving from a multi year stretch of double digit percentage expansion down to flatline territory on the top line and declining earnings. Now Ryan discussed this on the podcast back in September of 2025 as the company lowered its full year 2025 revenue and EPS guidance amid expected softness which their then guidance represented growth of 3% and negative 12% respectively over fiscal year 2024. Now although the company was able to uh, actually exceed their guidance in fiscal year 2025, they posted revenue growth of 5% uh, or 6% on a constant currency uh basis if we exclude the 53rd week from from 2024. But diluted EPS came in at 1326, down 9% year over year. So it was better than than their guidance but it was still weak overall. Now the company provided fiscal year 2026 guidance after it reported its Q4 2025 results, but has since revised it lower after Reporting its Q, uh 1 results 2026. Uh, you know this is in contrast to Aritzia. Ryan just went over it. They were actually upping their guidance but in case, or in the case of Lululemon, they dropped their revenue down to a range of 11 to 11.15 billion which equates to revenue growth of essentially flat to down 1%. And diluted EPS is now down to a range of 1095 to 1115 per share, which is representing a decline of 17% from fiscal year 2025. Now as I noted earlier, we have been getting lots of client questions on Lulu given the stock has pulled back. This is an actual recent client question we got in one of our live chat sessions with clients which we do every Monday and Wednesday and this individual said the stock pulled back recently and now available around 12 times trailing uh price to earnings. Do you see the company current valuation uh versus future growth, a good entry point at uh the current market price, which I responded if growth fails to reignite, the business may continue to demand that 12 times earnings or lower and become a bit of a value trap despite the business trading with a median PE uh multiple of 40 times over the last decade. And I noted that the lower valuation is certainly justified as in 2026 they were only guiding low single digit revenue growth. And if growth remains where it is for the foreseeable future, it will not be able to trade back to its highs of the past. So you know, generally speaking the valuation does look intriguing if one believes that that growth will reignite. But, but that thesis is certainly more speculative at this point in time to wrap everything up here. You know, I do think that Lululemon is a high quality business, but its stock price has come under severe pressure due to weak growth and evaluation derating given you know, number one, weak America's sales with strong competition, number two, tariff and markdown pressures and number three, seasonal launches failing to deliver. The company maintains a strong balance sheet and currently trades at 11 times forward fiscal year 2026 earnings which appears cheap compared to its historical self which traded at 40 times uh, trailing earnings. But this is justified given the lower growth and it will never be able to demand that 40 times again if it cannot reignite that earnings per share growth. So I believe that there is some speculative value to you know, a turnaround thesis and rebound in growth here. But personally I believe you know, there are some, some better fashion retail plays out there like Aritzia. Again you got to pay up for that business. But you know, the growth has been quite strong and again we're as a growth at a reasonable price in investor. That's our philosophy. You know, that's what we're looking at. You have to relate growth to, to the valuation to you know, come to uh, you know, if it's a buy or a good value or not. So I'll continue to monitor the businesses uh, growth, earnings growth, uh, through the rest of the year and into 2027. Uh but as we say time and time again, fashion can be fickle. Uh and right now I think that Lulu is a core example of that. You know, just fashion being fickle and you know know, people looking at other options out there. And this is the disclosure.

Speaker A: Yeah, and it's a good example of the juxtaposition of the two. Why you need growth and you need a reasonable price, but you need some growth in that business. I mean when we originally looked at Aritzia, we looked at Lululemon. We also we looked at some other names. Um, uh, right. Reitman's in the Canadian, uh, market as well. And you know, Reitman's was extremely cheap. Tremendous balance sheet, no growth basically, or you know, negative growth at that time. Uh, and you know, you. Three times earnings, like, yeah, you could. That's. It's incredibly cheap, uh, when you take out the cash. Um, but, uh, you know, Aritzia was then trading at about 16 times earnings, but the growth was above 16, like 20 plus growth. And the growth has actually accelerated, which is excellent to see. Perhaps not even predictable at the time, but if it maintained it, you know, 15 to 20%, uh, it was good value and it quickly reduced the PE to a point where, you know, you're well below the market level. P. So. And we did the same thing with the company we're updating this week. Like we compared it at that time to uh, uh, Reitman's. Right. It's Reitman's, they want us to say. But I've always said Reitman's. That's why I'm struggling between the two. But anyways, um, they, you know, again, it was three, four times earnings if you take the cash out. Uh, the, the other company was 15 times 14, 13 in that range, but had, you know, 15 plus percent growth. So, uh, the growth allows you to pay a little higher multiple. It's still a reasonable price. It's lower than the multi, uh, the market multiple, uh, the average market multiple is what I'm trying to say. Um, and you know, that will power the stock over the long, long term. I'd rather buy the stock trading at, you know, 15 to 20 times earnings that's growing at 12 to 20% versus the stock that's trading at three times. That is flat. That is maybe a turnaround story. Now having said all that, I think there is a path for Lululemon at some point to turn around. I think they need to focus back on some of the core elements that made them highly successful. Um, I know that their founder had a proxy battle with the company and that is now, that is now off the table. Uh, it went forward. The existing. Well, it is kind of new blood coming into the company. But, uh, you know, Chip did, as I understand, did not, uh, win the proxy battle. But, um, you know, having some new ideas in there and uh, you know, again, focusing back on what was core to the business, maybe not selling all the, the shoes, the ancillary products, focusing on the core athletic wear would be a good idea for, you know, what is a good brand. I think they still make good clothes.

Speaker B: Mhm.

Speaker A: Um, although, you know, I don't see like my son who's into fashion as well, like a 20 year old not looking at that brand right now. So you know, that's a bit of a concern.

Speaker B: They're definitely struggling in the area. It is pricey and that's the thing, you know. Like again we're seeing a weak America's sales but you know, uh, mainland China very strong. Hong Kong strong. Um, you know, other geographic, like just internationally sales have been strong but their, their core, you know, market the Americas, the United States, uh, especially has been flat to down. So you know, um, as opposed to

Speaker A: Aritzia who's m. You know, gangbusters in the U.S. right. Like just absolutely killing it in the U.S. their weakest market is Canada. Right.

Speaker B: But you know, and yeah, but I mean, because maybe a bit more of a value. Value oriented cost or consumer. I mean we're definitely seeing that here in, in Canada.

Speaker A: I'll tell you, like at this point is there much of a difference between Aritzia and in terms of pricing on many of their clothing items in Lulu? Like, you know, I'm not sure but I know, I know what you're saying. Um, I, Yeah, the one is executing tremendously well on you know, basically all across the board, their fashion, their styles, their store experience, all that. And uh, one, you know, maybe stretch themselves too thin is in executing as well. I mean they've had some product issues too. Even Lulu.

Speaker C: Mhm. And that, that probably is why you're seeing some regional uh, differ divergence because that brand can just still have that good appeal in mainland China like Brandon was saying. But then in the U.S. it's getting older. It's been in Canada, in the U.S. obviously the longest. So you just have that stale fashion

Speaker A: brand within it makes fashion so difficult. You can be made. Even if they were doing like we said, everything right, making the right product, boom. Uh, you're not as cool anymore. I don't know what that it's hard. How do we as an analyst factor in the cool factor? Like that's gotta be cool. Yeah, I know it's, it's difficult. Well, as soon as Brennan owns some Lululemon, so he told me that and the stock I think directly started going down after that. So you know, it finally hit Saskatoon and that's when we got to get the hell out.

Speaker B: I've got some Lulu on right now actually. Um, I'm actually wearing shorts.

Speaker A: So you're wearing the, the brand that are the the batch that was see through by accident.

Speaker B: Yeah.

Speaker A: And, yeah, Brennan's like, oh, everybody's like, I'm avoiding those. And Brennan bought them. Or at least this gentleman here with the mustache bought them. I don't know if Brennan would actually buy them.

Speaker B: You know, like, my sister, she sends me, like, when Lululemon's doing sales all the time, and, like, that's the only time that I'll ever, like, actually, you

Speaker A: know, purchase, uh, leggings, like, usually.

Speaker B: Yeah, like, they're laggings. Um, I just. It is pricey. I find it hard to pay one, uh, hundred and twenty dollars for a pair of pants or.

Speaker A: Yeah.

Speaker B: You know, pair of sweats. And even in the past, I thought that I was getting a screaming deal from. From Lululemon and, you know, bought some shorts or. Or some, uh, some leggings.

Speaker A: Just kidding.

Speaker B: And. And they ended up being, you know, very, very thin. You know, like, they. They weren't kind of the material that I was expecting. Um, so. Yeah, see through.

Speaker C: Yeah.

Speaker A: Well, I mean, uh, I mean, I probably shouldn't tell this, but we were bike riding and Candace, uh, was in front of me, and she's wearing Lulu's. And I. I pulled her over and said, do you know those are literally sea truck. She was, like, horrified, but it was like. It was like, honestly there, and she's just like, oh, my God. So, yeah, yeah, yeah. So the same ones Brandon was wearing. It so weird. All right, well, hopefully next week we get Brennan back on the podcast, but, you know, you never know. I, uh. You gotta vote. If you want this Brennan or the previous Brennan, let us know. Let us know. That's what we want to know.

Speaker B: I think we should do the poll. Uh, should Brandon keep just the stash or.

Speaker A: Yeah,

Speaker B: please bring back the beard.

Speaker A: The option mustache. Brennan beard. Brennan. No Brennan. That's horrible.

Speaker B: I was thinking right before I was on holidays last week, but, uh, I was thinking right before I went on holidays, Rick, Ryan's always calling, uh, Brett and myself the killer bees. I was thinking Ryan Rahil. R squared. No longer. You know, the newest edition could be R R. Right? Our R and R. Yeah, R and R. Just R Squared.

Speaker C: Something.

Speaker A: Yeah, uh, we'll workshop that. Thanks, guys. We don't know who your name is or what your name is. All right, now. All right, let's end it there. Keep your questions coming into our. Your stock, our take segment. We'll endeavor to answer those on a weekly basis. If you're watching this right now on YouTube, smash that subscribe button. If you're listening to this wherever you consume your podcast, rate and review us. And as always, I wish you profitable investing. Thank you.

Speaker B: Thanks everyone.

Speaker C: Thank you.

Speaker A: Thank you for listening.