September 9, 2019 BARRON’S 11
Fashion That’s a Stretch
SPANDEX IS EATING THE WORLD. FLEECE, TOO. BUT LET’S
This past Thursday, yoga tights pioneer Lulu-
lemon Athletica (ticker: LULU) reported blowout
day. Quarterly sales increased 22%. That came atop
called out high demand for shorts and other garments
among a relatively new customer group: men.
That’s one sign that the so-called athleisure trend—
wearing athletic fashions in casual settings or even at
sports apparel sales have grown at a compounded 6% a
year since 2013, 2.5 points faster than other apparel.
down from the attic, however; designs have changed.
women. What the garments generally have in common are high-tech
fabrics and a focus on comfort.
a Men’s Health article asked, “Should You Be Wearing an Athleisure
Suit?” It featured fleece business suits made by a couple of fashion-
ing my wool suits with weightlifting belts and snorkels.
7% to 9% more on sportswear over the coming year, versus 4% to 6%
suggesting plenty of room for growth.
UBS reckons that bodes well for Nike (NKE) and VF (VFC), the
looking to up their athleisure games. The three aforementioned stocks
years, double the return of the S&P 500 index. Ralph Lauren (RL),
Hanesbrands (HBI), and PVH (PVH), which sells Calvin Klein gar-
ments, have all lost shareholders money over that stretch.
sure stocks and the cheap but troubled rest. J.P. Morgan’s Matthew
day, he raised his price target to $230 a share from $200.
year’s earnings per share, and implies 14% more upside
for the shares from here. If that valuation gives pause,
well-received quarterly report in July, to $108 from $95.
suggests a 23% gain from here.
Thereisnotechstockbubble, Barron’s hasargued.
are Microsoft (MSFT), Apple (AAPL), Amazon.com
(AMZN), Alphabet (GOOGL), and Facebook (FB). But those don’t
It may be huge, but it’s still growing like a start-up, with revenue ex-
as more advertising dollars move to digital platforms.
But profits, like prices, can form bubbles of their own. In a report
this past week, strategists at Bank of America Merrill Lynch pointed
at 25% of the total.
This time, it’s difficult to foresee what could cause tech profits to
of the overall pie soon. That will mean index investors will have their
fortunes tied all the more to the same five companies.
and North Face smartphone holsters.
You don’t want to know what that will mean for casual Fridays.
By Jack Hough