Jim Cramer Recently Discussed These 9 Stocks

6. Lululemon Athletica Inc. (NASDAQ:LULU)

Number of Hedge Fund Holders: 60

A caller asked if it is a good time to add to their position in Lululemon Athletica Inc. (NASDAQ:LULU). Here’s what Cramer had to say:

“Alright, remember, we don’t care where a stock has come from, we care where it’s going. I do believe that at 17 times earnings, this stock is frantically trying to bottom. And I’m actually going to say, I have not said this before, I think if you want to put a small position on LULU, you can do it now.”

Lululemon (NASDAQ:LULU) manufactures, produces, and retails athletic clothing, footwear, and accessories. River Road Asset Management stated the following regarding Lululemon Athletica Inc. (NASDAQ:LULU) in its Q4 2024 investor letter:

“Lululemon Athletica Inc. (NASDAQ:LULU) was our largest new purchase last quarter (Q3) and the holding with the highest contribution to active return in the portfolio during Q4. As the pioneer of the “athleisure” industry, LULU has secured its position as North America’s leading athletic apparel retailer through its innovative technical fabrics and controlled distribution model. With 90% of sales through company-owned channels, LULU maintains exceptional brand integrity and pricing power. We believe this strategy has delivered outstanding results: 24% annual sales growth over the past five years and sustained 40%+ returns on invested capital. The company’s growth trajectory remains compelling, driven by rapid international expansion (~40% compound annual growth rate [CAGR] since 2019) and a thriving men’s business (~30% CAGR since 2019), while its robust balance sheet and disciplined capital allocation reinforce long-term value creation potential.

lululemon’s stock rebounded strongly in Q4 after the company reported robust performance metrics, including record Black Friday e-commerce traffic and the highest operating margin in a decade at 20.5%. While U.S. growth remained flat, the company’s premium positioning and controlled distribution strategy (avoiding broad sales events) drove adjusted gross margins up 40 bps to 58.5%, significantly outperforming guidance. International momentum continues to impress, with China growing 36% and Rest of World up 23%, while the company’s opportunistic capital return program, including $409MM in share repurchases during the quarter, further supported investor confidence in management’s execution and long-term value creation strategy. We trimmed the position as it approached our assessed value.”