Why Lululemon Isn't Worried About This Red Flag

Lululemon Athletica (NASDAQ: LULU) has a lot of inventory on hand, which normally would be a red flag for any retailing business. That risk is even more elevated at a time when economic growth rates are slowing and inflation is spiking.

However, the apparel retailer isn't as exposed to inventory writedowns as you might think. Strong demand trends through the first part of 2022 also imply Lululemon is striking the right balance in keeping its shelves fully stocked.

Let's take a closer look.

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Source Fool.com