(Bloomberg) — Last week’s selloff, which comes on the heels of what has been a generally successful earnings season for Corporate America, has investors bracing
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John Zolidis, founder of consumer-focused investment adviser Quo Vadis Capital, also removed his long recommendation on Lululemon shares this week. He noted that Choe’s departure follows concerning commentary from the company on its March earnings call, where it blamed both squeezed shoppers and the wrong product assortment for a softer start to its fiscal year.
“It’s very troubling,” he said. “It sounds like something is very wrong with the merchandising or the execution.”
John Zolidis, founder of consumer-focused investment adviser Quo Vadis Capital, expects to see weakness in discretionary spending as retailers report first-quarter results. One headwind, he said, is that there’s no major occasion straight ahead, like back-to-school, to bring shoppers out.
“They’re addicted to raising prices,” John Zolidis, president of Quo Vadis Capital told The Post. “There is a risk that the whole industry goes too far.”
“What helps Nike to be relevant more broadly is how many different consumer segments they touch,” said John Zolidis, founder of consumer-focused investment adviser Quo Vadis Capital. It’s not a high-end business and it’s not a low-end business, so “it’s a pretty good indicator of what’s happening out there.”
This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down Lululemon Athletica. The Canadian company, founded by Chip Wilson in 1998,
That, and an uptick in shoplifting, has John Zolidis, founder of consumer-focused investment adviser Quo Vadis Capital, bracing for choppy performance in retail stocks over the coming months.
“It’s a lot easier to see the bearish scenario coming to pass,” he said. “The consumer has been stronger than expected so far, so it could continue, but the environment’s working against that outcome.”
John Zolidis, a veteran retail analyst and president of Quo Vadis Capital, told MarketWatch that retailers might want to limit their expectations, noting that with so many stores looking to fill the Bed Bath & Beyond void, the sales bump might be limited for each.
In effect, the bump “is going to be dispersed,” Zolidis said.
Will LULU maintain the growth rate and margins? Zolidis, who rates the company’s shares BUY, thinks so.
“The company has kept it going much longer than nearly all others,” he said. “Bottom-line, after two years of the stock moving sideways despite consistent upward revisions to earnings, last night’s results could be the event that sets off a round of valuation expansion and vaults the name firmly back into the momentum camp. Certainly, this profile is not for everyone but for those already involved, we feel that playing for additional gains is supported by the fundamentals and outlook.”