Broke the 10,000 follower barrier - all for an account that only talks about a Consumer/Retail world that only goes down! Had a lot of help along the way to get here and want to use this moment to thank everyone. There are so many X accounts that we love but, on this occasion, want to single out those that have proactively helped us gain ample followers over the past few years. Greatly apologize if missed anyone. @NeelyTamminga: Former US Retail Softlines competitor on the sell-side but X got us reacquainted and now consider a sister. Matthew 12:50. @AsifSuria: His podcast is outstanding but talk about a great human being – was helping me understand the X world when I only had 100 followers despite him having 100x that. @AnalystEgg: Maybe first person to make me realize that X can be a platform for thoughtful, knowledgeable discussion. @ConsensusGurus: Wish he posted more on homebuilders as that world needs his thoughts on X. Good enough of a guy to ignore his strange love for the UF Gators 😉 @paulcerro: Profile picture aside 😉, does excellent work on the companies he looks into. @JacobJaber: Really changed the way I think about a lot of things. Founders just have a different outlook on life than sell-side research analysts. @gregoryblotnick: So much anonymous bullshit on X so was solid gold to come across his account as its written in the exact language of an institutional investor in consumer. The process, understanding, sarcasm, self-deprecation. @ProfPaulNary: Talk about a home run account to follow – why is he not already at 100k+. @k3ithmccullough: We share a love of athletic footwear, and he is 100% on top of my space at all times. @JeffMacke: Surprisingly the consumer world is pretty small on X right now (unlike tech) but Jeff is a must follow regardless. Unnatural love of Minnesota though 😉 @barryknapp: If there is only one macro account to follow this is it. Worked with Barry for probably a decade, yet he has the independent voice that is helpful relative to the sea of macro sameness you find at most banks. I guess the next milestone is 100,000? Does that mean I have to start making political posts and engaging in twitter wars with higher profile people? If so, guess I wont be making that milestone... Thanks again everyone and a special extra thanks to all the content creators that focus on the Consumer/Retail world. I didn't call many of you out but plan to make that kind of post in the upcoming future.

(2/3) $LULU: Lululemon Can Make A “Heidi” Look Good We are far from the days when Lululemon product was all the rage because of a strong reputation for flattering a certain part of the body anatomy. Of course, the business model was always much more than that and ultimately allowed the company to become an $11+ billion global brand. The core reasons for that success largely remain in place today and necessary change is already underway to return the brand to health. This isn’t an earnings preview note – it’s more a state of the union address for this company. We discuss major aspects of the story today including discounting, merchandising, and IT, as well as provide thoughts from Asia channel checks. The bull thesis here is that after a highly damaging proxy fight, the company is “really trying to set the business up so that Heidi steps in, hits the ground running, and builds on top of the actions that are already underway.” We don’t yet know if any of these actions are successful, but the company’s direction seems materially better now that founder Chip Wilson is back in the fold. Unfortunately, Heidi O’Neill doesn’t start as CEO until September 8th, which is after 2Q26 earnings. That gives interim management one more shot at kitchen sinking expectations to provide a fresh start but now with, importantly, input from Chip and two of his Board members. Now is probably a good time for a fresh look at corporate communications given the announced departure of CCO Bill Chandler. The old “good cop, bad cop” routine has the potential to work well with Interim Co-CEO Meghan Frank taking the hit upfront to ensure Heidi gets to prove all the doubters wrong and beat the perpetual bears off this story once and for all. It’s almost certain that Heidi will not have the same grace period that Elliott Hill at Nike enjoyed given the credibility hole she already sits in with investors (largely thanks to the incumbent Board)... ...(Abridged)... There was heavy discounting online this quarter (particularly emails) but we didn’t notice much in the stores themselves. The direction of discounting shouldn’t be too surprising given markdowns were expected to be up 50 basis points but difficult to judge if that covers the full magnitude that we noticed. We know Interim Co-CEO Andre Maestrini is focused on reducing instore markdown activity to create a more premium shopping experience but suppose if clearance was getting out of hand we would have seen more of it in the stores anyway. There seems to be a substantial trend change post quarter though as promotional email intensity has dropped off in a meaningful way. Our dataset from Random Walk shows almost zero activity for the last two weeks of the quarter and our own personal observations indicate that this trend continued throughout August. ...(Abridged)... As mentioned, this is a highly abridged version of this 9 page note. Subscribers can find the complete deep dive note and financial model at our website in post #3 of this thread (link also in profile). We currently have coverage of 20 consumer/retail companies and will always provide all work on Nike and Restoration Hardware for free. See our website for more information.