Comparative Study: Lululemon Athletica And Industry Competitors In Textiles, Apparel & Luxury Goods Industry

In the fast-paced and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Lululemon Athletica LULU in comparison to its major competitors within the Textiles, Apparel & Luxury Goods industry. By analyzing crucial financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in 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.

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

• The Price to Earnings ratio of 20.8 is 0.82x lower than the industry average, indicating potential undervaluation for the stock.

• The elevated Price to Book ratio of 7.68 relative to the industry average by 2.76x suggests company might be overvalued based on its book value.

• The stock's relatively high Price to Sales ratio of 3.34, surpassing the industry average by 3.09x, may indicate an aspect of overvaluation in terms of sales performance.

• The Return on Equity (ROE) of 7.61% is 4.81% above the industry average, highlighting efficient use of equity to generate profits.

• With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $530 Million, which is 5.89x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.

• With higher gross profit of $1.28 Billion, which indicates 2.98x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 10.4% is notably higher compared to the industry average of -0.72%, showcasing exceptional sales performance and strong demand for its products or services.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is an important measure to assess the financial structure and risk profile of a company.

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.

When evaluating Lululemon Athletica alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:

• When comparing the debt-to-equity ratio, Lululemon Athletica is in a stronger financial position compared to its top 4 peers.

• The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.33.

Key Takeaways

For Lululemon Athletica in the Textiles, Apparel & Luxury Goods industry, the PE ratio is low compared to peers, indicating potential undervaluation. The high PB and PS ratios suggest the market values the company's assets and sales highly. Lululemon's high ROE, EBITDA, gross profit, and revenue growth outperform industry peers, reflecting strong financial performance and growth potential.

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