Better Buy: Nike vs. Lululemon
Nike (NYSE: NKE) and Lululemon Athletica (NASDAQ: LULU) are both champions when it comes to delivering earnings and share performance growth over time. And they both took a very important step during the earlier stages of the pandemic: They ramped up their digital platforms and solidified already strong relationships with their customers.
But today, share price performance isn't a reflection of that. Both stocks have been on the decline amid concerns about the overall economy -- and how problems like rising inflation might hurt retailers. The good news is that this creates a buying opportunity for two solid, long-term players. But if you could only invest in one right now, which represents the better buy? Let's find out.
Nike's recent news hasn't been the brightest. The athletic apparel and footwear giant is struggling with too much inventory -- and a lower gross margin. The inventory situation is linked to supply chain disturbances. To remedy the problem, Nike plans on markdowns, and these will further weigh on margins.
Source Fool.com
