Weekly Roundup 2022-08-05

Weekly Roundup 2022-08-05

Lunar Capital Weekly Roundup

Index / Fund / Rate Start of Year Last week This Week % change YTD
JSE ALSI 73 723 68 934 69 519 -5.70%
NASDAQ Composite 15 833 12 391 12 658 -20.05%
S&P 500 4 797 4 130 4 145 -13.58%
Prime Lending Rate 7.25% 9.00% 9.00% 24.14%
Lunar BCI WW Flexible Fund 165.68 148.08 150.04 -9.44%
USD/ZAR 15.96 16.53 16.77 5.08%
EUR/ZAR 17.95 17.00 17.07 -4.90%
Brent Crude 77.86 103.59 94.38 21.22%

Source: iress

Company and Market News

Under Armour: a creator, marketer, and distributor of branded athletic apparel, released their Q1 2023 results last week. For the quarter, revenue remained flat at $1.3 bn compared to Q1 a year ago. Net income decreased from $59m in Q1 2022 to $8m in Q1 2023. The share price of Under Armour increased by 4.06% this week despite the disappointing news.

Under Armour operates in the athleisure/athletic apparel space with other brands such as Nike and Lululemon. Despite Under Armour and Lululemon making athletics-wear for the same purpose, Under Armour sells products to the mid-income market compared to Lululemon, who sell products to an upper-income market. An example would be if we compared the price of leggings. A pair of Under Amour leggings go for just under $75; whereas a pair of leggings from Lululemon can go for just under $100, with some leggings being priced at just under $120.

One of the things we like about premium brands, at Lunar Capital, is that they have higher margins compared to other brands. People that like a specific premium brand will stick to buying that brand compared to others. A downside, however, would be that in this current market, when interest rates are going up, and the disposal income of consumers is decreasing – consumers who were on the fringe of buying premium products may hold off on buying these products.

Below is a table comparing the margins and other financial indicators of Under Armour and Lululemon.

Company Market Cap @ 5 Aug 2022 ($bn) PE Ratio @ 5 Aug 2022 Gross Margin Net Margin
Under Armour 4.04 12.80 49.67% 5.43%
Lululemon 40.56 40.43 56.87% 15.35%


Disclosure: Lululemon is held in the Lunar BCI Worldwide Flexible Fund.

Read our full Disclosure statement: https://lunarcapital.co.za/disclosures/

Our Privacy Notice: https://lunarcapital.co.za/privacy-policy/

The Lunar BCI Worldwide Flexible Fund Fact Sheet together with our Disclaimers can be read here.

Share article

Latest Posts

Snowflake – A Benefactor of Artificial Intelligence
Snowflake – A Benefactor of Artificial Intelligence
Find out how Snowflake is using artificial intelligence to enhance their product offering.
Nvidia – Bringing on the Competition
Nvidia – Bringing on the Competition
Faster semiconductors and the battle for AI Dominance. Which companies are trying to close the gap on chipmaker: Nvidia?
Walmart – History of Opportunity
Walmart – History of Opportunity
From rural towns to global domination, let’s look at how Walmart became one of the world’s biggest retailers.

Lunar Capital
on Eastwave Radio

Every Wednesday, at 07h45, Sabir chats with Nazia from Eastwave Radio (92.2 fm, live stream on
www.eastwave.co.za) on investing and the markets.

Scroll to Top