Performance Comparison: Lululemon Athletica And Competitors In Textiles, Apparel & Luxury Goods Industry

In today's rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. In this article, we will undertake an in-depth industry comparison, assessing Lululemon Athletica LULU alongside its primary competitors in the Textiles, Apparel & Luxury Goods industry. By meticulously examining crucial financial indicators, market positioning, and growth potential, we aim to provide valuable insights to investors and shed light on company's performance within the industry.

Lululemon Athletica Background

Lululemon Athletica designs, distributes, and markets athletic apparel, footwear, and accessories for women, men, and girls. Lululemon offers pants, shorts, tops, and jackets for both leisure and athletic activities such as yoga and running. The company also sells fitness accessories, such as bags, yoga mats, and equipment. Lululemon sells its products through more than 680 company-owned stores in 19 countries, e-commerce, outlets, and wholesale accounts. The company was founded in 1998 and is based in Vancouver, Canada.

Company P/E P/B P/S ROE EBITDA (in billions) Gross Profit (in billions) Revenue Growth
Lululemon Athletica Inc 58.31 16.40 6.36 7.05% $0.51 $1.26 18.7%
Ralph Lauren Corp 20.97 4.60 1.88 11.2% $0.4 $1.29 5.55%
Tapestry Inc 11.89 4.07 1.65 12.7% $0.49 $1.49 2.92%
PVH Corp 16.41 1.63 0.94 3.2% $0.31 $1.34 3.6%
Levi Strauss & Co 29.42 3.55 1.19 6.36% $0.19 $0.95 3.37%
Capri Holdings Ltd 23.86 2.76 1.04 5.46% $0.17 $0.93 -5.62%
Columbia Sportswear Co 19.85 2.50 1.43 4.87% $0.17 $0.54 -9.37%
Under Armour Inc 9.55 1.70 0.67 5.36% $0.11 $0.67 -6.05%
Kontoor Brands Inc 14.55 8.92 1.29 19.12% $0.09 $0.28 2.33%
Carter's Inc 12.88 3.47 1 12.82% $0.16 $0.42 -5.95%
Oxford Industries Inc 10.65 2.54 1.05 1.72% $0.03 $0.21 4.34%
FIGS Inc 57.67 2.48 1.73 1.78% $0.01 $0.1 10.71%
Movado Group Inc 11.39 1.27 0.95 3.47% $0.02 $0.1 -11.22%
Superior Group Of Companies Inc 30.96 1.20 0.42 1.6% $0.01 $0.05 -1.86%
Lakeland Industries Inc 19.96 1.03 1.07 2.14% $0.0 $0.01 11.59%
Vince Holding Corp 2.05 0.76 0.13 1.94% $0.0 $0.04 -14.7%
Average 19.47 2.83 1.1 6.25% $0.14 $0.56 -0.69%

Upon analyzing Lululemon Athletica, the following trends can be observed:

  • The current Price to Earnings ratio of 58.31 is 2.99x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.

  • With a Price to Book ratio of 16.4, which is 5.8x the industry average, Lululemon Athletica might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.

  • With a relatively high Price to Sales ratio of 6.36, which is 5.78x the industry average, the stock might be considered overvalued based on sales performance.

  • With a Return on Equity (ROE) of 7.05% that is 0.8% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.

  • The company exhibits higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $510 Million, which is 3.64x above the industry average, implying stronger profitability and robust cash flow generation.

  • The company has higher gross profit of $1.26 Billion, which indicates 2.25x above the industry average, indicating stronger profitability and higher earnings from its core operations.

  • With a revenue growth of 18.7%, which surpasses the industry average of -0.69%, the company is demonstrating robust sales expansion and gaining market share.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.

Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.

By considering the Debt-to-Equity ratio, Lululemon Athletica can be compared to its top 4 peers, leading to the following observations:

  • In terms of the debt-to-equity ratio, Lululemon Athletica has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.

  • This implies that the company relies less on debt financing and has a more favorable balance between debt and equity with a lower debt-to-equity ratio of 0.33.

Key Takeaways

For Lululemon Athletica, the PE, PB, and PS ratios are all high compared to its industry peers, indicating a potentially overvalued stock. On the other hand, the high ROE, EBITDA, gross profit, and revenue growth suggest strong financial performance and growth prospects relative to competitors in the Textiles, Apparel & Luxury Goods sector.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

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