In this episode, Scott Becker breaks down the corporate misdirection in earnings reports from RH and Lululemon.
Chapter 1: What corporate misdirection is discussed in RH's earnings report?
This is Scott Becker with the Becker Private Equity and Business Podcast. Today's discussion is RH, Lululemon, and corporate speak. So one of the things that I love in corporate America, and I say I love it I hate it, but I love watching the ridiculousness in which leaders try and tie themselves in knots to try and tell a story different than what we're seeing. So here's the deal with RH.
Chapter 2: Why is RH's stock down despite positive earnings rhetoric?
RH is down 27% today, and if you read the release on earnings, You would think that it's going fantastic. Revenues are this. This is going that way. Consumers love our stuff. Demand is up. We're opening more locations. And they go on and on about what's great. Then they get to the punchline. Earnings are down and we missed earnings. And I just think it's one of the great misdirections of our time.
Chapter 3: What is the comparison made with Boomer Esiason's play action pass?
It's sort of like the Boomer Esiason play action pass. where he pretends he's going to hand off, then he passes. These guys pretend like it's going well, and then they slip in that earnings just absolutely suck. The corporate misdirection, the corporate speak. Similarly with Lulu. The bloom has sort of fallen off the rose at Lulu. It's just a lot less exciting place to shop than it used to be.
Chapter 4: What is the current shopping experience like at Lululemon?
There's no compelling reason to go into Lulu. You know, no matter how you look at it, it's just not as exciting as it was. Still fine, that's the basics, but even the sweats at 128 are hard to stomach paying that much money for sweats. But here's the deal with Lulu. When Lulu goes poorly, they don't say they've got to re-get back after their creativity.
Chapter 5: What are the concerns regarding Lululemon's product pricing?
They don't say they've got to work on that stuff. Now, the thing I'll tell you is I still love the RH furniture. I think they do a great job on furniture. They just priced it so crazy that you only do it once in a while. They treat you when you go in there like they don't want to talk to you if you're going to spend $20,000 that day. They treat you like you're a poor schlep.
unless they see you looking like one of these tall patrician people or model type woman that looks like they spend a lot of money or model type men that looks like a ton of money if you're not ken and barbie they treat you like trash the the point is and i don't look like kenneth barbie so i get treated that way but anyways lou has become the same thing here you got the ceo not talking about what they got to do to improve things but talking about all the corporate misdirection
You know, tariffs, weak consumer, everything but the fact that Lulu is not attractive anymore for clothing. It's not nearly as exciting. I love the Viore shirts better than the Lulu shirts. I still like the Lulu pants. The shorts are fine. I'm sure I can find alternative shorts, but there's not compelling reasons. They tried to introduce shoes.
They look very unexciting, and I'm a guy who buys way too many shoes. I know it's embarrassing. It's like an Imelda Marcos thing. Anyways, thank you for listening today. We're talking about our age, Lululemon, and corporate speaking, corporate misdirection. It's a little embarrassing to watch. Thank you for listening to the Becker Private Equity and Business Podcast. Thank you very, very much.