Lululemon's second-quarter sales fell 4% on an 8% decline in the Americas (67% of sales) and a 4% international increase (33%). Including a 560-basis-point benefit from tariff refunds, operating margin fell 190 basis points to 18.8% on sales weakness and higher marketing spending.
Despite having many rivals, Lululemon’s productivity stands out in the sportswear space. Its yearly sales per square foot are more than $1,400, and its gross margins exceed 55%.
Competition is ubiquitous in all of Lululemon’s key apparel categories. The firm faces challenges from firms like Athleta, Vuori, and Alo Yoga, and Nike is improving its competitiveness through its Skims partnership.
|
Metric
|
LULU
|
GAP
|
UAA
|
|---|---|---|---|
Price/Earnings (Normalized) | 8.24 | 11.39 | 34.13 |
Price/Book Value | 2.38 | 2.04 | 1.58 |
Price/Sales | 1.05 | 0.55 | 0.46 |
Price/Cash Flow | 6.06 | 4.26 | 88.63 |
|
Metric
|
LULU
|
GAP
|
UAA
|
|---|---|---|---|
Quick Ratio | 1.17 | 0.77 | 0.80 |
Current Ratio | 2.23 | 1.82 | 1.81 |
Interest Coverage | — | 18.11 | −3.51 |
|
Metric
|
LULU
|
GAP
|
UAA
|
|---|---|---|---|
Return on Assets (Normalized) | 17.83% | 10.03% | −7.69% |
Return on Equity (Normalized) | 31.12% | 33.73% | −22.00% |
Return on Invested Capital (Normalized) | 22.08% | 13.24% | −9.74% |
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Morningstar Rating for Stocks
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United States