Key Insights:

• Lululemon Athletica (NASDAQ: LULU) is one of the more popular athletic apparel brands that sells clothing for yoga, running, training, and other activities.
• The company recently saw a big dip in stock price after full-year guidance fell short of analyst and consensus estimates, though this could be an opportunity for investors.
• Lululemon has grown greatly over the last few years and quarters, and also had a very strong fiscal 2023 – with net revenue for the year increasing by 19% to $9.6 billion.
• The company boasts attractive margins (a gross profit margin of 58.31% and a net income margin of 16.12% trumping many competitors) and maintains a strong balance sheet with cash and cash equivalents of $2.2 billion and total liabilities of $2.86 billion ($1.15 billion of which are capital leases)
• Following this drop in stock price, Chair of the Board Martha Morfitt (who has served on the board since 2008) purchased shares for the first time since 2021

Lululemon Athletica Inc. (LULU): $390.65

Market Cap: $49.23B

Enterprise Value: $48.38B

Lululemon Athletica (LULU) is one of the more popular athletic apparel brands that sells clothing for yoga, running, training, and other activities. Lululemon has taken the higher-end athleisure market by storm and investors have reacted enthusiastically – driving the stock price up by over 60% in 2023.

The Canadian company was founded in 1998 as a manufacturer of women's yoga pants, but has largely expanded its product offerings to various forms of apparel, accessories, and personal care products. With 711 stores across the globe, Lululemon is focused on global expansion while maintaining their high quality of goods – opening 25 net new stores during the fourth quarter of 2023. Thirteen of these stores were opened in mainland China, 7 in the US, and 5 others in the rest of the world.

Lululemon Growth

The company had a strong fiscal 2023 (ended January 28, 2024), with net revenue for the year increasing by 19% to $9.6 billion (compared to fiscal 2022). Comparable sales also increased by 13% – with mainland China comparable sales increasing by 39%, Americas comparable sales increasing by 8%, and the rest of the world comparable sales increasing by 32%. Gross profit increased by 25% to a strong $5.6 billion and net income grew by 81.4 % to $1.55 billion. In fiscal 2023, the company also announced a partnership with the exercise machinery company Peloton Inc. (NASDAQ: PTON), becoming their primary apparel provider.

Lululemon's Revenue Breakdown by Region

Lululemon also has relatively strong margins compared to its competitors – a gross profit margin of 58.31% and a net income margin of 16.12% trumps similar athletic apparel companies like Nike Inc. (NYSE: NKE), which has a gross profit and net income margins of 44.30% and 10.14% respectively. The company's balance sheet is also fairly attractive, with total inventories in Q4 2023 decreasing 9% to $1.3 billion compared to Q4 2022 – a good sign, especially considering that the fourth quarter of the year is typically when retailers end up with excess inventory after ramping up for the holidays. Cash and cash equivalents were also $2.2 billion at the end of Q4 2023, which is especially attractive considering total liabilities are $2.86 billion – $1.15 billion of which are capital leases.

Despite these strong results, the company took a hit in recent weeks after full-year guidance fell below analyst and investor expectations. The company expected Q1 2024 revenue to fall between $2.18 billion to $2.20 billion, versus the $2.26 billion consensus and full-year revenue to be between $10.7 billion and $10.8 billion, as opposed to the $11 billion consensus. This dip in stock price is likely what convinced Chair of the Board Martha Morfitt to purchase shares.

The last time Ms. Morfitt purchased shares was in June 2021, when the stock was trading at roughly $330 a share. Since then, the stock price has seen a high of over $500 (at which point many insiders of the company, such as the CFO, CEO, and Chief Brand Officer, began to sell shares) but Ms. Morfitt only purchased shares once more when the stock price settled back at roughly $389 a share.

We always like to see purchases by insiders that have been with a company for a long period of time and Ms. Morfitt has served on Lululemon's board since December 2008, observing the company operate through the Great Recession and the pandemic. Ms. Morfitt also serves as a principal of River Rock Partners, a business and cultural transformation consulting firm, and is a Director of the fluid handling systems and components company Graco Inc. (NYSE: GGG) and the haircare company Olaplex Inc. (NASDAQ: OLPX).

The recent dip in Lululemon's stock price has made the company fairly attractive to us, although it does remain expensive with a P/E of 32.02. Despite the guidance not meeting consensus estimates, the company still expects growth over the next few quarters and years, and if they can maintain their favorable margins and balance sheet, the company is well positioned for the future. While we won't start a position in the company immediately, we may revisit it for an upcoming mid-month or monthly newsletter idea.

Editor's Note: Tamanna Suria contributed to this article.

Welcome to edition 727 of Insider Weekends. Insider buying increased last week; with insiders purchasing $110.06 million of stock compared to $74.12 million in the week prior. Selling declined sharply to $ 1.94 billion compared to $3.29 billion in the week prior.

Sell/Buy Ratio: The Insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by the total insider purchases that week. The adjusted ratio dropped notably to 17.65 . In other words, insiders sold almost 18 times as much stock as they purchased. This week again the Sell/Buy ratio was favorable; compared to the prior week when the ratio stood at 44.5.

Notable Insider Buys:

1. Snowflake Inc. (NYSE: SNOW): $161.6

Chief Executive Officer Sridhar Ramaswamy acquired 31,542 shares of this cloud-based data warehousing company, paying $158.52 per share for a total amount of $5.00 million.

While not revealed in the Form 4 filing, as you can see from the second page of his employment agreement, the new CEO of Snowflake will receive an additional RSU grant of $5 million if he purchases $5 million worth of stock in the open market.

2. Lululemon Athletica Inc. (LULU): $390.65

Director Martha A. Morfitt acquired 3,700 shares of this premium athletic apparel company, paying $389.05 per share for a total amount of $1.44 million.

3. OmniAb Inc (NASDAQ: OABI): $5.42

President and CEO Matthew W. Foehr acquired 225,000 shares of this biotechnology company, paying $5.19 per share for a total amount of $1.17 million. Mr. Foehr increased his stake by 8.38% to 2,908,803 shares with this purchase.

4. Grocery Outlet Holding Corp (NASDAQ: GO): $28.78

Director Erik D. Ragatz acquired 36,500 shares of this discount grocery retail chain, paying $28.25 per share for a total amount of $1.03 million.

5. Summit Therapeutics Inc. (NASDAQ: SMMT): $4.14

Shares of this biopharmaceutical company were acquired by 2 insiders:

• Chief Executive Officer Mahkam Zanganeh acquired 110,321 shares, paying $3.73 per share for a total amount of $411,094. Mr. Zanganeh increased his stake by 0.44% to 24,923,800 shares with this purchase.
• Chief Financial Officer Ankur Dhingra acquired 100,000 shares, paying $3.75 per share for a total amount of $375,000.

Notable Insider Sales:

1. Meta Platforms Inc. (NASDAQ: META): $485.58

Shares of Meta were sold by 3 insiders:

• COB and CEO Mark Zuckerberg sold 386,636 shares for $503.79, generating $194.78 million from the sale. A majority of these shares were sold through the Chan Zuckerberg Initiative Foundation.
• Chief Legal Officer Jennifer Newstead sold 585 shares for $505.29, generating $295,595 from the sale.
• Chief Operating Officer Javier Olivan sold 490 shares for $507.00, generating $248,430 from the sale.

2. Autozone Inc. (NYSE: AZO): $3151.65

Executive Chairman William C. Rhodes sold 18,751 shares of this specialty automotive retail company for $3189.77, generating $59.81 million from the sale.

3. Microstrategy Inc. (NASDAQ: MSTR): $1704.56

Executive Chairman Michael J. Saylor sold 25,000 shares of this business intelligence software company for $1776.62, generating $44.42 million from the sale.

4. Arista Networks Inc. (NYSE: ANET): $289.98

President and CEO Jayshree Ullal sold 111,500 shares of this leading networking technology company for $299.70, generating $33.42 million from the sale.

5. Salesforce Inc (NYSE: CRM): $301.18

Shares of this cloud-based software company were sold by 6 insiders:

• Chair and CEO Marc Benioff sold 75,000 shares for $304.61, generating $22.85 million from the sale.
• Co-Founder and CTO, Slack Parker Harris sold 5,142 shares for $306.31, generating $1.58 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
• President and COO Brian Millham sold 3,342 shares for $306.47, generating $1.02 million from the sale.
• President and CFO Amy E. Weaver sold 942 shares for $305.46, generating $287,741 from the sale.
• Pres/Chief Engineering Officer Srinivas Tallapragada sold 942 shares for $305.46, generating $287,741 from the sale.
• EVP & Chief Accounting Officer Sundeep G. Reddy sold 66 shares for $305.46, generating $20,160 from the sale.

Full story available on Benzinga.com

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Textile art is having a revival, as the artists on show at the Barbican exhibition, Unravel: The Power and Politics of Textiles in Art, attest.

The show is a comprehensive journey through the themes explored by artists utilising textiles as a medium. But it also invites deeper reflection on the societal shifts that have prompted a revival of the art form. Historically associated with femininity, domesticity and craft, textiles possess a deceptive simplicity that conceals their potential for subversion and political dissent.

The exhibition focuses on this subversive nature of textiles in contemporary art through works by artists including Feliciano Centurión. His delicate floral embroideries on modest blanket squares are accompanied by poignant stitched phrases such as “Soy alma en pena” (“I am a soul in pain”) and “Estoy vivo” (“I am alive”). These words express his battle with HIV and affirm his queer masculine identity.

Małgorzata Mirga-Tas’s collaged textile hanging, meanwhile, revises historical depictions of the Romani community. In doing so, the artist reclaims space for stories excluded from historical accounts. And Igshaan Adams’s immersive ethereal installation, crafted from beads and wire structures, prompts reflection on the collective opposition to artificially imposed borders in South Africa’s apartheid regime.

The changing landscape of exhibiting textiles

The exhibition also includes works by established figures such as Sheila Hicks and Magdalena Abakanowicz. Their works were displayed in the Wall Hangings exhibition at New York’s Museum of Modern Art in 1969, a pivotal show that legitimised the use of fibre within the realm of the fine arts.

Using unorthodox and found materials, female artists of this era departed from the European tapestry tradition. Their three-dimensional fibre structures both physically and metaphorically reclaimed space in an art world largely dominated by their male counterparts.

In the catalogue for the Barbican exhibition one of the curators, Lotte Johnson, remarks: “Back in 2020, we had collectively noted how textiles were proliferating across contemporary art practices.” This proliferation can be traced back to recent societal changes, as well as the instrumental role of cultural intermediaries including museums and private galleries.

Social movements like #MeToo and Black Lives Matter have highlighted the need to tell a more inclusive history of art and acknowledge the contributions of women, people of colour and indigenous artists who have been overlooked in traditional accounts.

Further, the global spread of biennials and fairs, along with increase mobility of curators, has contributed greater visibility of artists from countries such as Africa and South America. Their practices often employ textiles and recycled elements, transcending the European dichotomy between art and craft.

The consumer demand for handmade textile items – a trend in response to an increasingly digitised society – has also played a role in the renewed appreciation for textile-based art. Additionally, movements associated with environmentalism and third-wave feminism have embraced traditionally domestic practices such as knitting and crocheting. These enjoyed further popularity during the COVID pandemic as a stress-coping mechanism.

Museums have been pivotal in endorsing the revival of textiles. And the increased prevalence of women in positions of power at cultural institutions is partly why. The retrospective on Anni Albers at the Tate Modern in 2018, for example, is much-cited as a show that put the spotlight back on textiles. The show was supported by the appointments of Frances Morris as director of Tate Modern in 2016 and Maria Balshaw as director of Tate the following year.

Additionally, a new generation of curators are shaping curatorial programmes to include a more diverse range of artistic practices. These curators were educated by feminist art history scholars such as Griselda Pollock and have now moved into influential roles within prominent art institutions.

Interest in textiles is also gaining momentum within the private art sector. According to the art market database Artprice, textile works generated US$40 million (£31.6m) in 2022, a significant increase from $13 million in 2012.

Private galleries are exerting a growing influence on the art world, and have contributed significantly to the visibility of fibre art and textiles. Last October, the private gallery Alison Jacques opened a new space in London with a solo show on Sheila Hicks. At the Brafa art fair in Brussels in January 2024, Richard Saltoun showcased Textile Pioneers, which exhibited works by Barbara Levittoux-Świderska and Magdalena Abakanowicz, among others.

While the promotion of female textile artists is certainly a welcome shift towards a more inclusive representation of historical artistic contributions, the private sector’s commercial considerations cannot be overlooked. Female artists have been defined as “the bargain of our time”, and textile works are an affordable purchase for underfunded institutions and collectors who cannot afford works by male artists from the same period.

Moreover, the practicality of textiles, being easier to transport and install compared to paintings, further enhances their appeal to galleries.

The resurgence of textiles in contemporary art provides a vital opportunity for conversation and revision within both the art world and society at large. It also highlights the complex interplay of cultural intermediaries who juggle idealistic efforts and pragmatic commercial interests.

Looking for something good? Cut through the noise with a carefully curated selection of the latest releases, live events and exhibitions, straight to your inbox every fortnight, on Fridays. Sign up here.

Francesca Stocco does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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You may think of dust as an annoyance to be vacuumed and disposed of, but actually, on a grander scale, it is far more important than most people realise. Globally, dust plays a critical role in regulating our climate, radiation balance, nutrient cycles, soil formation, air quality and even human health.

But our understanding of it has been hampered by limitations in current mathematical models. These models, built on methods developed decades ago, struggle to accurately simulate the properties and quantities of dust.

The latest research by my colleagues and I sheds light on these limitations and suggests a more nuanced picture of dust. Our findings reveal that dust emissions are not constant but shift seasonally and between hemispheres, across deserts and shrublands. This challenges the long-held notion that north Africa and the Middle East are the dominant sources of global dust.

Using two types of satellite data, our research suggests that dust emissions during dust storms are rare and localised, much like lightning strikes, and occur in constantly shifting locations.

Dust’s complexity

The cycle of dust emission, transport and deposition has positive and negative effects on our environment. Nutrients in deposited dust fertilise our oceans and rainforests. But dust from eroded sediment can also damage plants and trees and disrupt photosynthesis, while dust deposited on ice increases the speed at which it melts.

Variations in dust composition, like mineral type and colour, create a complex cocktail of particles injected into the atmosphere. This, in turn, interacts with clouds to influence how sunlight is reflected or absorbed, ultimately regulating Earth’s temperature.

So, it is vital we have an accurate understanding of where dust emissions are coming from, in what quantities, how dust is transported across the planet and where it ends up.

Dust emission models were developed nearly 30 years ago when there was far less data available. Consequently, those now classical dust cycle models made some assumptions. One important assumption was that Earth’s land surface was uniformly covered in perpetually loose and dry material, which was always available and caused dust emissions.

However, we now know from field measurements that soils are often crusted or covered in different types of gravel. The threshold for the wind to lift the soil and release it to the atmosphere was also assumed to be fixed and unchanging over time.

We also now know that sediment moves around the landscape and may not always be available. Vegetation covering the soil reduces the wind’s speed at reaching the soil surface, which then reduces dust emission. Dust models still assume that “greenness” indicates the presence of vegetation. However, in drylands where most dust emission happens, the vegetation is often brown, but its roughness still reduces the wind’s speed and shelters the soil from dust emission.

Consequently, classical dust cycle models have over-estimated the amount of dust emission. These weaknesses have remained since models were developed. This is mainly because modellers assume that by adjusting their dust cycle models to the measurements of dust in the atmosphere they overcome any weaknesses in the dust emission modelling.

A new approach

Almost a decade ago we developed a new approach using shadow to estimate how much of the wind’s speed is reduced by roughness, such as vegetation, on the Earth’s surface. This approach was still limited by the previous model assumptions described.

However, during the pandemic, traditional field studies became impossible. So, we adopted a new approach. Using satellites, we produced a global collection of dust emission points. This provided valuable data and paved the way for further research.

We found that existing models overestimated the role of north Africa as the primary source of global dust emissions. Our research shows that dust emissions shift seasonally and between hemispheres, from deserts in east Asia, the Middle East and north Africa as well as shrublands in Australia and North America.

Current models have only been providing a fraction of the story based on dust in the atmosphere above north Africa and the Middle East. Little dust emission was predicted to occur in the southern hemisphere. But this contrasts with field observations and the experiences of people in those regions.

These new findings are crucial for large scale models because the properties of dust are different depending on where they come from. Not only that, but dust may change as it is transported within a hemisphere to different destinations where it settles on land, in our oceans and on icecaps.

Our new understanding of dust distribution, quantity and seasonal shifts has significant implications. It will require revisions to historical reconstructions that explain past climate changes. Our findings will also influence future climate projections and how the dust cycle interacts with the carbon, energy and water cycles of Earth’s systems.

Adrian Chappell receives funding from the UK Natural Environmental Research Council (NERC).

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