| By Andy Swan Just over a month ago, we deemed Lululemon (LULU) an early holiday winner. Web visits were rising at a nice clip as consumers prioritized high-end brands with very intentional shopping. Now that all gifts have been opened, it's the perfect time to check back in. First off, if you played LULU to the upside in early December, congrats! The stock is up 22% since our early note. More important? Our conviction holds. Web visits finished the season strong, peaking during Black Friday shopping where digital traffic trended 71% higher year over year as the company drew the most visits to its Shop app and e-commerce site ever. An industry-wide comparison including high-end labels and athleisure names shows a clear divide in winners and losers: 
Exclusive, popular brands like Aritzia, Hoka (DECK), and Lululemon logged double-digit year-over-year growth in traffic. In contrast, used-to-be-cool brands like Nike (NKE) continue to slide. In the third quarter, Lululemon opened 28 new company-operated stores, including 14 acquired through the Mexico operations acquisition, bringing the total to 749 stores. However, brands like Vuori and Alo intensified competition by expanding aggressively, placing 90% of Vuori stores and 84% of Alo stores within half a mile of Lululemon locations across the United States. Lululemon also benefits from macro gift-giving trends this year featuring apparel – the top category. 
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Bottom line: LULU stock turned a corner in August, and we believe rightfully so. Looking ahead, we are expecting a strong fourth-quarter earnings report and are watching for international expansion. Lululemon's China sales grew 39% year over year in the third quarter, exceeding $1 billion for the first time, driven by expansion into lower-tier cities. Total international sales grew 29% year over year. Other Western brands in China lowered prices to attract customers, but Lululemon raised prices by 20% compared to the U.S., with consumers still clamoring for RMB 4000 ($565) jackets and RMB 850 ($120) leggings. Lululemon is now the third-largest foreign sportswear brand in China, behind Nike and Adidas. Shares remain ~19% lower than they were a year ago, so it is still trading at a discount. We see continued gains from here. TradeSmith’s seasonality tool supports a reliable move higher in the months ahead – showing that between March 14 and April 23, LULU has logged an average gain of 12.98% with an 86.67% accuracy rate: 
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Plus: Has the Government Already Cashed Out its Bitcoin? The U.S. government is reportedly preparing to sell $6.5 billion worth of seized Bitcoin (BTC), raising questions about the timing of the sale and its potential market impact. The sale, involving 69,370 bitcoins, is expected to take place before President-elect Donald Trump takes office. This massive Bitcoin holding originated from the Silk Road, a darknet marketplace that operated from 2011 to 2013. The platform used Bitcoin for its pseudonymous properties to facilitate illegal activities like drug trafficking and hacking services. When U.S. authorities dismantled the operation and seized its assets, the Bitcoin was worth under $200 per coin. Today, at over $93,000 per coin, it represents an extraordinary windfall for the government. The timing of this potential sale has led some to speculate that it may be aimed at preempting Trump’s crypto-friendly policies. Trump has pledged to appoint pro-crypto officials at key financial regulatory agencies, including the Securities and Exchange Commission (SEC), and to promote broader adoption of digital assets. Industry executives see his presidency as an opportunity to overhaul crypto policies, including improved banking access for crypto firms and clear regulatory frameworks. Analysts suggest such a large sale of Bitcoin could create short-term volatility, as similar events have done in the past. We have a different take. It is likely that the U.S. government has already sold these 69k+ Bitcoin via a credit facility with Coinbase (COIN) that did not require the transfer of the coins to a new wallet. We believe it is more likely than not that the market has already absorbed this selling pressure and will likely rebound in the short term as more clarity is provided. If the government does have more Bitcoin to sell and sends prices lower, we would view it as an extraordinary accumulation opportunity ahead of the incoming administration. Until next time, 
Andy Swan
Founder, LikeFolio Discover More Free Insights from Derby City Daily Here’s what you may have missed from Derby City Daily this week… ✓ Fixing Starbucks’ 3 Big Problems Won’t Be Easy ✓ Cruise Into 2025 with This Wave Season Winner ✓ Holiday Demand Could Give These 3 Stocks an Unexpected Boost in 2025 | 
