Better Buy: Lululemon vs. Gap
lululemon athletica (NASDAQ: LULU) weathered the retail apocalypse over the past decade as shoppers continued to buy its high-end yoga apparel and activewear. It aggressively expanded its direct-to-consumer channel, nurtured customer loyalty with its free yoga classes and events, and repeatedly exceeded Wall Street's expectations with its double-digit sales growth.
Gap (NYSE: GPS), the parent company of Gap, Old Navy, and Banana Republic, fared worse. It struggled with sluggish mall traffic and intense competition from fast-fashion retailers, while its messy turnaround efforts, abrupt CEO changes, and weak sales growth all disappointed investors.
That's why Lululemon's stock surged nearly 420% over the past five years as Gap's shares rose just 35%. But past performance never guarantees future gains, so we should take a fresh look at both apparel retailers to see if Lululemon will continue to outperform Gap.
Source Fool.com
