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Now taking a look at shares of Lululemon, they're up right now by about 1.2%, the athletic wear company going to be reporting its Q2 earnings after the bell today. Investors are going to be looking for further guidance here, as cautious consumers and more competition have led to shares falling almost 50% year to date. For more, let's welcome in Jim Duffy, good friend of the show. He's Seaport's managing director of Equity Research and analyst for sports and lifestyle brands. Jim, great to have you back on here. So, let's, I mean, let's tee it up here for Lululemon. We've already been looking across the retail environment and trying to figure out what a more cost-conscious consumer and a consumer that's looking for value hacks will spell out for this company. What's your estimation? What's your anticipation here?

Yeah, hey, Brad. Uh, thanks for having me back on the program. Um, super interesting quarter that Lululemon's about to report. Uh, as you mentioned, the stock's down about 50% year to date. They've had a product which they had to pull from the shelves, a product line called Breeze True, which creates a hole in the merchandising assortment. So, we think it's broadly expected that there's going to be a reset to the outlook. Uh, we, however, want to buy the stock ahead of that. Um, this is the best economic model in my coverage universe. Uh, we are believers in the, uh, global trend of, uh, greater concern for health, wellness, fitness, self-actualization, Lululemon uniquely positioned to lead that trend. The prevailing narrative here is that Lululemon is done growing in, uh, the US market, uh, due to competition, some other factors, but we don't believe that's the case. Uh, and we think this is a good opportunity in shares.

So, you're very bullish, it sounds like, on Lulu. Now, personally, I'm I'm a customer. I have gone and I've purchased, uh, products from Lulu. However, I always note how expensive their brands are and how you can often find very similar types of clothing at other cheaper retailers out there. So, when we talk about this this cost-conscious consumer that Brad was just alluding to, is the pricing too high for Lulu? Is is the competitive environment too great at this point? What are the biggest risks in your view?

Well, first off, I'm glad to hear you're a customer, Alexandra. Uh, the pricing, like that's been a concern on Lulu, and competition has been a concern on Lulu for as long as I've been following the stock. The key for Lulu and and the key to their success is innovation and the quality of the product, which distinguishes it from alternatives in the marketplace. And we believe they still have that. What we see from consumers is a willingness to pay up for quality, a willingness to pay up for innovation, and a willingness to pay up for newness. And where Lulu may be lacking some now, uh, is on the newness front, but that's a fixable problem. We expect they can address that in the merchandise assortment in coming quarters.