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A quick look at KORS and LULU

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March 21, 2013 – Comments (2) | RELATED TICKERS: KORS , LULU , CATO

After slight pullbacks in KORS and LULU, I decided to take a quick look at the fundamentals of both.  From a valuation perspective, both companies seem to be pretty similar in regards to PE, ROA, ROE, Gross Margins, Op Margins, net cash, Market Cap.  KORS mostly beats out LULU in these metrics - maybe by a few percentage points or two - but for the most part they are similar.  One metric, however, is vastly different: comparable store sales.  LULU's comp sales are up 10%, while KORS are up 40%.  Having said that, is anybody adding to LULU rather than KORS, here?  Am I missing some other glaring metric?  Despite the fact that one company focuses on sportswear and the other focuses on accessories, both are trendy, popular women's brands that charge way too much for clothes.

On the opposite end of the retail clothing spectrum (at least from a value perspective), I added to my CATO stake at $23.90 today.  I think (hope) the market is underestimating their Versona brand growth potential over the next 2-3 years (and their $200MM cash hoard).  And if the CAPS guys would be so kind, I'd still appreciate my CATO start price adjustment for the $2.00 in special dividends they paid back in 2012.  :)

http://www.google.com/trends/explore#q=versona

 

 

2 Comments – Post Your Own

#1) On January 28, 2014 at 9:46 AM, ElCid16 (96.90) wrote:

Well, since this post, KORS is up around 51%, while LULU is down around 28%.

CATO is up around 21%.

I like retail.  :) 

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#2) On February 04, 2014 at 2:38 PM, ElCid16 (96.90) wrote:

KORS up 60% and LULU down 29% since this post.

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