Industry Comparison: Evaluating Lululemon Athletica Against 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 700 company-owned stores in about 20 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 24.74 9.13 3.98 17.26% $1.02 $1.9 15.63%
Ralph Lauren Corp 18.99 4.70 1.85 3.61% $0.18 $1.04 1.76%
Tapestry Inc 11.54 3.60 1.52 5.13% $0.24 $1.11 -1.8%
Levi Strauss & Co 80.57 4.87 1.60 -0.53% $0.04 $0.91 -7.77%
PVH Corp 11.04 1.38 0.83 2.97% $0.21 $1.2 -21.61%
Columbia Sportswear Co 20.69 2.60 1.49 2.2% $0.06 $0.39 -6.17%
Kontoor Brands Inc 18.74 10.67 1.64 15.68% $0.09 $0.29 -5.38%
Under Armour Inc 12.92 1.36 0.53 -0.01% $0.03 $0.6 -4.75%
Carter's Inc 10.70 2.94 0.84 4.43% $0.07 $0.32 -4.94%
Oxford Industries Inc 28.10 2.99 1.09 -10.11% $-0.06 $0.25 5.74%
G-III Apparel Group Ltd 8.35 0.91 0.47 1.89% $0.05 $0.28 -10.49%
FIGS Inc 44.42 2.33 1.78 0.37% $0.0 $0.08 -0.78%
Movado Group Inc 14.69 1.17 0.90 0.57% $0.01 $0.08 -5.68%
Superior Group Of Companies Inc 29.57 1.78 0.63 1.96% $0.01 $0.06 6.17%
Vera Bradley Inc 32 0.95 0.53 -0.71% $0.01 $0.07 -9.4%
Lakeland Industries Inc 27.08 1.21 1.18 -0.79% $0.0 $0.01 7.73%
Average 24.63 2.9 1.13 1.78% $0.06 $0.45 -3.82%

By carefully studying Lululemon Athletica, we can deduce the following trends:

  • Notably, the current Price to Earnings ratio for this stock, 24.74, is 1.0x above the industry norm, reflecting a higher valuation relative to the industry.

  • With a Price to Book ratio of 9.13, which is 3.15x 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.

  • The stock's relatively high Price to Sales ratio of 3.98, surpassing the industry average by 3.52x, may indicate an aspect of overvaluation in terms of sales performance.

  • The Return on Equity (ROE) of 17.26% is 15.48% above the industry average, highlighting efficient use of equity to generate profits.

  • With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $1.02 Billion, which is 17.0x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.

  • Compared to its industry, the company has higher gross profit of $1.9 Billion, which indicates 4.22x above the industry average, indicating stronger profitability and higher earnings from its core operations.

  • The company's revenue growth of 15.63% exceeds the industry average of -3.82%, indicating strong sales performance and market outperformance.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.

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.

In light of the Debt-to-Equity ratio, a comparison between Lululemon Athletica and its top 4 peers reveals the following information:

  • Lululemon Athletica has a stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.33.

  • This suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator by investors.

Key Takeaways

For Lululemon Athletica, the PE, PB, and PS ratios are all high compared to its industry peers, indicating the stock may be overvalued. On the other hand, Lululemon Athletica shows high ROE, EBITDA, gross profit, and revenue growth compared to its industry peers, suggesting strong operational performance and growth potential within 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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