What Lululemon’s sold-out belt bag says about the stock

Yahoo Finance Live anchors discuss Lululemon's belt bag and what it's sold-out status says about the apparel company's stock.

Video transcript

JULIE HYMAN: Well, Cyber Monday spending hit a record topping $11.3 billion. That's from Adobe data, showing consumers are still shopping despite record inflation, or maybe they're just paying more for stuff. One thing people hit by on with the Lululemon belt bag. It sold out once again on Black Friday. That hot item is where we find Sozzi's Take. And we also find it on Sozzi. He borrowed my belt bag for the segment, which I was lucky enough to get-- I don't know-- quite a while ago, so.

BRIAN SOZZI: I will say, it's a real honor to wear your vintage Lululemon belt bag, Julie. I appreciate it, you know. It's, I'm glad we're friends. All right, but look, this analysis comes from our other friend, Simeon Siegel, over at BMO Capital Markets, out with a note this morning talking about these belt bags here that Lululemon is selling on its site, $58 to $78.

And Simeon is saying-- and you can see in the Google search data right there-- first, Google searches for belt bags has been absolutely robust in November. This remains a very hot item, and as Simeon noted, has been out of stock pretty much throughout the year.

And you can see it right there on the screen. That is the modern day belt bag, a little more-- a little different than the other one that Julie has here that I am wearing. But still, Simeon Siegel saying Lululemon got the inventory for this bag back in the stores, high margin product. And it looks like those products sold out very nicely for the holiday season.

Now, Simeon is adding this might be a good indication on what Lululemon might report in terms of earnings when they announce results later this week. Strong sales of belt bags. Plus, strong traffic Simeon talks about, really, throughout Black Friday weekend might mean good things in terms of Lululemon's quarter, but also more importantly, when it comes to a stock priced for perfection like this, more importantly, their outlook.

So Simeon is looking for a good outlook from the company as well. Whether that leads to a higher stock price, to be determined. As I mentioned, this probably is one of the most expensive stocks in all of the retail sector right now, which leads me to my take. And I get these belt bags are cool. I happen to-- oh, look. We all--

BRAD SMITH: Hey, yes.

BRIAN SOZZI: We all have belt bags.

BRAD SMITH: Belt bags for everyone.

BRIAN SOZZI: Wow, just-- we're just absolutely fab. But look, these modern day fanny packs, as you can see right here-- and that's what they are, fanny packs, just with great or improved marketing for the modern age. They are likely to just not be popular at some point next year. And Julie's not liking that take.

JULIE HYMAN: You're so wrong.

BRIAN SOZZI: But-- but--

JULIE HYMAN: You are so wrong about that.

BRIAN SOZZI: Well, hold on. In addition to those belt bags, the stock, at some point, is probably to come back down to Earth as Lululemon cycles tough sales--

JULIE HYMAN: The stock's already come down.

BRIAN SOZZI: Now let me add this, Julie. We are likely looking at an environment next year where many more people are back in the office. Do we need this bag in our office life?

BRAD SMITH: Yes.

JULIE HYMAN: Yes.

BRIAN SOZZI: Don't we need a backpack again as we go into the office?

JULIE HYMAN: People are still going to be wearing these.

BRIAN SOZZI: Really?

JULIE HYMAN: Yes.

BRIAN SOZZI: OK. Fanny packs.

JULIE HYMAN: Definitely, fanny packs.

BRIAN SOZZI: Why can't we call them fanny packs?

JULIE HYMAN: And PS, if you can't get one of these, I also have a Dagne Dover fanny pack. Not quite as useful. It doesn't have as many little compartments, but it looks cool, so.

BRIAN SOZZI: I really like this green.

JULIE HYMAN: There are options.

BRIAN SOZZI: Is this green?

JULIE HYMAN: People out there-- it's-- I would call it an aqua.

BRAD SMITH: It's like a teal green.

JULIE HYMAN: I would call it an aqua.

BRIAN SOZZI: It really brings out my eyes. I love it.

JULIE HYMAN: If you can't find this belt bag, there are other belt bags out there, people, for you to buy for your loved ones for the holidays.

BRAD SMITH: What's the difference between the belt bags and the satchels? Maybe that's where I'm--

JULIE HYMAN: A satchel is a backpack.

BRIAN SOZZI: Ah, it's all the same.

BRAD SMITH: That's a backpack?

JULIE HYMAN: A satchel is a backpack or a book bag. A satchel--

BRAD SMITH: I'm not cool enough to rock that.

JULIE HYMAN: A satchel is a book bag. A belt bag or a fanny pack is that.

BRIAN SOZZI: What do you put in this? I'm not going through your bag.

JULIE HYMAN: My phone.

BRIAN SOZZI: Broadly speaking.

JULIE HYMAN: Money.

BRIAN SOZZI: Money.

BRAD SMITH: Your card--

JULIE HYMAN: Lipstick.

BRAD SMITH: --to get into the building. Yeah.

JULIE HYMAN: Yeah.

BRIAN SOZZI: I mean, I'm not saying it doesn't serve a purpose, but.

JULIE HYMAN: It's quite useful.

BRIAN SOZZI: Interesting.

JULIE HYMAN: Yes. Your backpack, you got to take-- you got to go--

BRIAN SOZZI: I'm required to buy another one of these.

JULIE HYMAN: This is right there.

BRIAN SOZZI: How many of these do you have? Just one?

JULIE HYMAN: I have one of this brand, and I have one of the Dagne Dover.

BRIAN SOZZI: Well, they're back in stock at Lululemon. 78 bucks, Julie.

JULIE HYMAN: Are they in stock?

BRIAN SOZZI: I need a new one. Time to get it.

JULIE HYMAN: I think that's fake news.

BRAD SMITH: All right, we're going to check in the stores.