Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Luxottica Group SpA (ADR) (LUX), Lululemon Athletica inc. (LULU): Athletic Wear Companies Target Sporty Women

Women who wear girly sunglasses socialize. Women who choose sunglasses from Oakley exercise.

That’s the message of the spring ad campaign for Oakley. In the ad, which actually does read, “For exercising not socializing,” a woman clad in exercise gear strolls in front of two socializing diners, wearing a pair of Oakley sunglasses. The message is clear. Oakley sunglasses are for women who work out. The same message is seen in an Oakley athletic wear ad, which reads that the company’s clothing is for running, not running errands.

Looking forward

Oakley’s parent company, Luxottica Group SpA (ADR) (NYSE:LUX), knows eyewear. When the company purchased Oakley in 2007, it was already an established company, owning such big-name brands as Ray-Ban and Sunglass Hut. Since Ray-Ban has an established women’s line, the company likely saw value in beefing up its women’s store, which advertises sunglasses for sports, swim and surf, and “lifestyle,” which looks suspiciously like the “socializing” the company eschewed in its campaign.

Perhaps, Oakley is wise to listen to its parent company. In its most recent quarter, Luxottica Group SpA (ADR) (NYSE:LUX) reported a 10% increase in net profit year-on-year, reaching $280.5 million. The company recently began making sunglasses for Giorgio Armani, a deal the company’s CEO predicted could bring in as much as EUR200 million ($265.52 million) in coming years.

Competing for female shoppers

Luxottica Group SpA (ADR) (NYSE:LUX) has steep competition if it wants to try to win the American female shopper away from competitors like Lululemon Athletica inc. (NASDAQ:LULU) and NIKE, Inc. (NYSE:NKE). Both companies have long been reaching out to sporty females. Lululemon, in particular, has been a stock market darling in recent months, with revenue rising 21% to $345.8 million in its most recent quarter.

The company boldly goes after the female athlete, focusing specifically on feminine yoga clothing. Specializing in this small segment of the female customer base has allowed Lululemon Athletica inc. (NASDAQ:LULU) to thrive.

However, a snafu with see-through yoga pants earlier this year, combined with the exit of CEO Christine Day, makes Lululemon Athletica inc. (NASDAQ:LULU) an uncertain investment. In fact, the company has boldly stated that the recall of the flawed pants will cost it $40 million in profits during the fiscal year.

A true classic

One company that could teach both Lululemon Athletica inc. (NASDAQ:LULU) and Luxottica Group SpA (ADR) (NYSE:LUX) a thing or two is NIKE, Inc. (NYSE:NKE). The company has long included women in its marketing, launching a series of ads just last year celebrating pioneering athletes. The company also set an entire site aside for its women’s brand:

The company reported fourth-quarter earnings of $0.76 per share, which was up 27% year-over-year, beating estimates. The company’s total revenue came in at $6.7 billion, up 9% from the previous year.

However, soon after its earnings announcement, NIKE, Inc. (NYSE:NKE) lowered its earnings forecast for the year, citing low revenue in China as the reason. The company has noticed declining revenue in the country, which accounted for 9.7% of the company’s revenue in its most recent fiscal year.

Interestingly, in 2012, NIKE, Inc. (NYSE:NKE) wowed women with a series of ads that celebrated a positive body image. The ads went viral, but as it turned out, the ads weren’t from Nike. They were based on a real ad campaign that lounged in obscurity.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.