The Gap, Inc. (GAP) vs lululemon athletica inc. (LULU)

The Gap, Inc. and lululemon athletica inc. are both Apparel Retail companies. lululemon athletica inc. is the larger, with a market value of $11.8B against $7.7B — 1.5× the size. The Gap, Inc. trades at the lower P/E: 6.4× against 8.3×. lululemon athletica inc. grew revenue faster over the last twelve months: 1.74% against 1.05%. lululemon athletica inc. has the higher net margin (12.8% vs 8.14%) and the higher return on invested capital (36.4% vs 35.6%). Across the 22 metrics below, The Gap, Inc. leads on 11 and lululemon athletica inc. on 11.

Valuation

Metric GAP LULU Apparel Retail median
P/E 6.38 8.30 12.56
P/S 0.51 1.03 0.35
P/B 1.96 2.39 1.57
Price to free cash flow 8.09 8.44 11.15
EV/EBITDA 3.36 4.08 7.42
EV/Sales 0.48 0.93 0.51
Earnings yield 15.67% 12.05% 5.76%
Free cash flow yield 12.35% 11.84% 4.34%

Profitability

Metric GAP LULU Apparel Retail median
Gross margin 43.26% 56.11% 41.90%
Operating margin 10.99% 17.84% 2.50%
Net margin 8.14% 12.78% 3.41%
Free cash flow margin 6.24% 12.21% 2.86%
Return on equity 33.78% 30.90% 7.71%
Return on assets 9.98% 17.72% 2.85%
Return on invested capital 35.57% 36.36% 6.41%

Growth

Metric GAP LULU Apparel Retail median
Revenue growth (TTM) 1.05% 1.74% 4.14%
EPS growth (last fiscal year) (3.18%) (9.43%) —
Revenue growth, 5-year CAGR 2.17% 20.33% 5.92%
Net income growth, 5-year CAGR 0.00% 21.81% 0.00%

Health

Metric GAP LULU Apparel Retail median
Debt to equity 0.38 0.00 0.01
Current ratio 1.82 2.19 1.54
Net debt to EBITDA (0.94) (0.67) (0.29)

Dividend

Metric GAP LULU Apparel Retail median
Dividend yield 2.94% — 2.94%
Payout ratio 2.07 0.00 0.00

Size

Metric GAP LULU Apparel Retail median
Market cap 7.66b 11.80b 358.41m

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