Daily Gains Letter

retail stock

This $27.0-Billion Niche Industry a Lucrative Opportunity for Retail Investors

By for Daily Gains Letter | Dec 19, 2013

Opportunity for Retail InvestorsIt might not be as flashy as precious metals or the biotech industry, but the $27.0-billion U.S. yoga industry has some pretty strong numbers and corresponding retail stocks.

Over the last year, 15 million people regularly participated in yoga here in the United States, spending more than $27.0 billion on yoga products. Over the last five years, spending on yoga products has soared 87%. And the average annual increase of the number of people who practice yoga is expanding at a rate of 20%. (Source: “Yoga Statistics,” StatisticBrain.com, July 27, 2013.)

Furthermore, almost three-quarters (72.2%) of yoga participants are women and 68% earn at least $75,000 a year. On top of that, more than 40% of participants are in the lucrative 18–34 age demographic, and 41% are between the ages of 35 and 54.

While a number of publicly traded retail stocks operate in the yoga apparel industry, none are quite as well-known, for better or worse, as lululemon athletica inc. (NASDAQ/LULU).

Of course, the “for worse” part refers to the barrage of negative public relations (PR) that has helped to drop this retail stock’s share price down 24% so far this year. Lululemon has been under severe PR pressure since March, when the retail stock recalled its popular black yoga pants for being too see-through. Company CEO Christine Day stepped down in June; and in July, the company was dealing with another PR nightmare after insiders said the company shuns plus-sized shoppers. To make matters worse, company founder Chip Wilson blamed quality control concerns regarding the yoga pants on “women’s bodies” (more specifically, thick thighs).

Clearly, the bad PR … Read More

Are These Retail Stocks Pre-Holiday Bargains?

By for Daily Gains Letter | Nov 14, 2013

Retail Stocks Pre-Holiday BargainsWhile many retailers in the United States might be having visions of sugar plums, a lot will be left holding a chunk of coal. And in spite of the economic pressures facing American retail stocks, this piece of coal will not turn into a diamond.

Even though the U.S. economy is reportedly on stronger footing, you wouldn’t be able to tell by the number of people out shopping. Traffic to U.S. retail stores is expected to slip 1.4% this November and December. In the last two months of 2012, traffic increased by 2.5% after falling 3.1% in 2011. (Source: Wohl, J., “U.S. holiday sales expected to rise less than last year: Reuters web site,” September 17, 2013.)

This cannot help but translate into weaker-than-expected sales. In fact, sales at U.S. stores are projected to rise just 2.4% in November and December, compared to three percent for the same period in 2012, four percent in 2011, and 3.8% in 2010.

Granted, these miserly 2013 holiday sales projections came out ahead of recent economic data that showed the U.S. added more jobs than expected in October. However, even that observation is missing the bigger picture; after all, shoppers need money to shop.

In 2012, the country’s supplemental poverty rate was 16%; despite the great strides made on Wall Street over the last two years, the supplemental poverty rate remained unchanged from 2011. The 2012 official poverty rate in the U.S. was 15%, unchanged from 2011. (Source: “Supplemental Measure of Poverty Remains Unchanged,” U.S. Census Bureau web site, November 6, 2013.)

The supplemental poverty measure accounts for the impact of different benefits and … Read More