© Reuters. Lululemon Athletica vs. Adidas: Which Athletic Apparel Stock is a Better Buy?
Athleisure companies have witnessed strong demand and sales since the pandemic, as consumers paid more attention to their fitness and health. Prominent athleisure retailers lululemon athletica (LULU) and Adidas (OTC:) are expected to deliver solid returns in the coming months. But which of these stocks is a better buy now? Read more to find out. Adidas AG (DE:) (ADDYY) and lululemon athletica Inc. (LULU) are two prominent players in the athletic apparel industry. Based in Germany, ADDYY designs, produces, and markets footwear, apparel, accessories and gear, and golf products under the Adidas and Reebok brands. It sells through company-owned retail stores, mono-branded franchise stores, wholesale distribution, and e-commerce channels. On the other hand, LULU designs, manufactures, and distributes men’s and women’s athletic apparel and accessories. It sells its products through its lululemon and Ivivva-branded stores, outlets and warehouse sales, yoga studios, health clubs, fitness centers, mobile apps, and lululemon.com e-commerce website.
Social distancing restrictions and lockdowns have made consumers focus more on their health and fitness and do at-home workouts over the past year, driving the demand for athletic apparel, footwear, and related accessories. E-commerce sales have helped these companies stay afloat during the pandemic. Also, increasing vaccination rates have witnessed people join gyms, yoga centers, play sports, and other outdoor activities. This continuing demand has incentivized athleisure companies to manufacture flexible and comfortable apparel, introduce new fashion in sync with the changing consumer trends, and expand their market reach. The global athleisure market is expected to grow at an 8.6% CAGR and reach $549.41 billion by 2028. So, both ADDYY and LULU should benefit.
While ADDYY lost 18.7% over the past three months, LULU has surged 9.1%. LULU is a clear winner with 44.4% gains versus ADDYY’s negative returns in terms of their past nine months’ performance. But which of these stocks is a better pick now? Let us find out.
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