Lululemon Athletica (LULU.NE) Stock Analysis & Winston Score

Lululemon makes athletic clothing, mainly yoga pants, leggings, shorts, and tops. It sells to adults who exercise or want comfortable everyday wear, with a strong following among women, though its men's line is growing. The company is based in Vancouver, Canada, and is one of the largest premium athletic apparel brands in the world.

Lululemon makes most of its money by selling clothes directly to customers through its own stores and website, which helps it keep more profit per sale than brands that rely on third-party retailers. It operates primarily in North America but is expanding in China and Europe. Its main competitive advantage is brand loyalty and a community-driven marketing approach built around local fitness events and ambassador programs. The biggest risk the company faces is slowing growth in its core North American market, where competition from Nike, Adidas, and newer brands is intensifying.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+2.4% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

-15.0% YoY

YoY Growth Rate

Earnings declining

Insider Activity

96.8%ownership

Insiders own a meaningful stake in the company

Cash Position

Cash flow positive

$1.8B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

Lululemon Athletica is growing revenue at 2% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

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Quality

Gross Margin

54.8%

Healthy — 54.8% gross margin

Operating Margin

22.5%

Excellent — 22.5% operating margin

ROCE

15.9%

Strong — 15.9% return on capital

ROIC between 15% and 25%. Every dollar invested in the business earns 15 to 25 cents back per year.

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Growth

Sales YoY

+17.6%

Fast-growing sales (17.6% YoY)

EPS YoY

+12.2%

Earnings growing (12.2% YoY)

Healthy double-digit earnings growth — what compounders look like.

EPS Consistency

4/8 quarters

Earnings inconsistent quarter-to-quarter

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Cash Flow

Cash Conversion

170%

Turns 170% of profit into real cash

FCF Margin

19.1%

Converts sales into free cash efficiently (19.1%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity

0.06

Conservative — low debt load (0.06)

Interest Cover

100.00x

—

Comfortably covers interest (100.0x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

9.5x

no trend

Attractive valuation — P/E 9.5

P/E under 10. The price tag is small relative to last year's profit.

P/E vs Forward

N/A

not available

Data not available

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Dividends

Not applicable for this business.

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