Capitalizing On Brand Rotation
My new favorite brand is Lululemon (LULU). I am celebrating the fact that I am finally “fit” enough to “fit” into their yoga pants. Lululemon is a great example of an aspirational brand. People are willing to pay more to wear this upscale brand of clothing and, as a result, the company’s adjusted gross profit margins are a lofty 57.3% on $3.3 billion in annual revenue.
Brand value is an intangible asset that does not show up on the balance sheet, but it does translate into pricing power, profit margins, and strong sales. It is no wonder then, that owning a basket of the top 50 brands yields superior investment results, beating most major indices over the last 10-year time period.
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EQM Indexes LLC is a woman-owned firm dedicated to creating and supporting innovative indexes that track growth industries and emerging investment themes. Co-founded by Jane Edmondson, a former Institutional Portfolio Manager with more than 25 years in the investment industry.
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