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Crocs And Lululemon Have Seen Stock Swell 3x In Two Years, But Which Is A Better Bet Now?



Lululemon’s stock (NASDAQ: LULU) has grown by 195% between the beginning of 2018 and 2020 – a handsome return for an investor by any count. Investors in Crocs’ stock (NASDAQ: CROX) fared even better with returns in excess of 230% over the same time period. But it is hard to believe that Crocs’ stock outperformed Lululemon’s – especially since Lululemon’s revenue growth for the 2017-2019 period stood at 50%, while Crocs’ revenue grew by 20%. Keeping in mind that Crocs’ stock has shrunk 36% year-to-date, while Lululemon stock added another 20%, doesn’t Crocs’ look like a buying opportunity?

Not quite. We believe that Lululemon continues to be the stronger investment, as we highlight in our dashboard Lululemon vs. Crocs: Does the price movement makes sense.

Lululemon’s profit margins (net income as a percentage of net revenues) are higher at 16.2% versus 9.7% for Crocs. Notably, both companies have witnessed a steady improvement in the margin figure over the last three years. Lululemon’s profit margin has jumped from 9.8% in 2017 to 16.2% in 2019, whereas Crocs’ margin figure has gone up from 1% to nearly 10% over the same timeframe. That said, Lululemon’s strong revenue and margin performance over recent years are reflected in its much higher P/E multiple of 56x (based on its current market price and FY’19 EPS), compared to Crocs’ P/E of around 15.7x now. Despite Lululemon’s P/E being at an all-time high, we believe that its stock can gain more in the long run.

How Do The Core Businesses For Lululemon And Crocs Compare?

Lululemon derives a bulk of its revenues from the sale of healthy-lifestyle-inspired athletic apparel products and accessories. Lululemon has achieved unparalleled growth in the apparel industry in the last few years, with the company’s revenues growing by a stellar 50% over 2017-2019. Although the coronavirus outbreak will have a sizable impact on Lululemon’s revenues in FY20 due to lower discretionary spending, the adverse impact of store closures, and increased unemployment, we believe the demand for yoga and athleisure products will rebound as the outbreak of the virus subsides. Furthermore, Lululemon’s well-established digital business is helping to mitigate the impact of store closures on the company’s top-line.

On the other hand, Crocs primarily makes money by selling casual footwear products and accessories for all age groups. Crocs’ revenues grew by 20% over 2017-2019 led by strong growth in units sold and higher average selling prices. However, the impact of Covid-19 was evident from Crocs’ Q1 2020 results which saw its revenues shrink by 5% while total units sold fell by more than 7% as stores remain closed and consumer spending saw a meaningful decline. Nevertheless, as the situation inches towards normalcy, Crocs’ business will likely return to growth but it is unlikely to be as robust as that of Lululemon’s. LULU has a huge customer base and faces less competition in the athleisure space. On the other hand, Crocs faces stiff competition from the large, established players like Nike and Skechers as well as local players in the fragmented footwear market.

The final difference can be attributed to the retail footprint of these companies. As of 2019, Lululemon was operating more than 490 stores while Crocs’ store count stood at 367. As the fears related to the virus subside, we believe Lululemon’s larger retail footprint will play a major role in its growth. To distill, we believe Lululemon stock is likely to outperform Crocs stock, if not near-term, at least in the medium- to long-run.

While Lululemon is going strong, the ongoing crisis has raised questions about the very survival of certain companies in the retail sector due to their precarious financial position. We find out whether Gap Can Survive The Covid-19 Recession in a separate analysis.


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Fashion & Style

Lady Gaga is the face of Valentino Beauty’s new fragrance




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Lady Gaga is set to star in Valentino Beauty’s latest fragrance campaign. The Italian fashion house announced Gaga as the new face of Voce Viva, a perfume created by Valentino creative director Pierpaolo Piccioli.

“Imagined as a voice to spread a message around the world, Valentino Voce Viva invites everyone to touch hearts, inspire others and live their dreams,” the brand said in a press release. “Expressing the Maison’s values of inclusivity and individuality, Voce Viva celebrates one of the women’s most intimate sense.”

To spread this messaging, Valentino selected Gaga for her Italian roots, inclusivity, and individuality. “Lady Gaga means freedom, self-consciousness, pure heart,” Piccioli said in a statement. “Her participation in this campaign elevates the symbolic power of the project to the highest level. She is the icon of a generation. Her message of freedom, passion for art, self-consciousness and equality is the same our Valentino community stands for. I am so proud for having her in.”

Gaga’s campaign will debut this September, in accordance with the worldwide launch of Voce Viva. The singer has long been a fan of Valentino, having worn the brand’s pieces multiples times on the red carpet when promoting A Star is Born.

Perhaps most memorably, she attended the 76th annual Golden Globe Awards and accepted the award for Best Original song in a periwinkle Valentino gown. She also wore a dramatic Valentino feather gown at the Venice Film festival in 2018.

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Fashion & Style

Homme Plissé Issey Miyake Spring 2021 Menswear Collection




“For a future that is healthy, bright, and full of hope.” So read the closing caption at the end of an engagingly filmed and attractive collection from Homme Plissé Issey Miyake. That it was worth sticking around until the end of the credits to read said caption is down to the phone-shot footage of Plissé enthusiasts out and about, enjoying their clothes. Before that we saw three dancer models, one of whom was partnered with a basketball, demonstrate the ease the pieces afford by moving enthusiastically. A very nice touch was the suggestion that these were not only clothes you choose to put on in the morning, but also clothes that implore to be worn: They attracted the attention of the models by quivering on the rail with the same pent-up urgency my reproachfully unwalked dog demonstrated all day one of this digital Paris Fashion Week.

Among the highlights were a tracksuit in an irregular, multicolor, cityscape inspired check; robe-like coats in polyester printed in soft-toned bleach puckerings originally rendered on denim; and pieces in a mesh fabric developed to resemble a hologram. Plissé jackets included new three-quarter sleeves which Miyake’s typically comprehensive notes explained were designed to transition between the formal and casual. Two looks in top-to-toe stone tones, with low hemmed shirts, were perhaps a little cult member / spa employee, but evidently deeply relaxing to wear. Plissé pieces can be classed as both activewear and tools for attainment of serenity.

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Fashion & Style

Lululemon is having its first major sale in 3 years after coronavirus crushed business




Popular athletic apparel retailer Lululemon, known for its leggings and other workout gear, is holding its first major warehouse sale since 2017 due to the coronavirus putting a strain on business, according to a report by Business Insider.

The sale is online only, and new deals will appear each day through Monday.

Although you can snag Lululemon’s popular items like leggings starting at $49 and shorts starting at $29, the rare sale makes it clear just how much most of the retail industry is struggling.

Lululemon’s first-quarter earnings report shows that its net revenue dropped by 17% compared to 2019 as it was forced to temporarily shut its stores due to the pandemic.

Some of the noteworthy deals that are part of the sale:

25″ High-Rise Tights for $69, instead of $98

Medium Support Sports Bra for $29, instead of $78

Cropped Pants for $59, instead of $98

Down Jacket for $79, instead of $198

Cycling Jacket for $59, instead of $168

There are currently 14 Lululemon stores in New Jersey and all have since reopened, except for the Jersey Garden Mills location in Elizabeth.

You can browse the entire Lululemon online sale here.


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Nicolette Accardi can be reached at Follow her on Twitter: @N_Accardi. Find on Facebook. Have a tip? Tell us.

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