Ross Stores, Inc. (ROST) and Lululemon Athletica Inc. (LULU) are two prominent players in the retail apparel industry, each carving distinct niches with off-price and athletic wear strategies. Ross focuses on value-driven middle-income consumers, while Lululemon targets premium active lifestyle shoppers through innovation and direct-to-consumer channels. This comparison highlights their market overlap and growth potential to help you decide which company offers the most compelling investment opportunity in 2026.
Table of contents
Companies Overview
I will begin the comparison between Ross Stores and Lululemon by providing an overview of these two companies and their main differences.
Ross Stores Overview
Ross Stores, Inc. operates off-price retail apparel and home fashion stores under the Ross Dress for Less and dd’s DISCOUNTS brands. The company targets middle to moderate income households, offering apparel, accessories, footwear, and home fashions. With approximately 1,950 locations across 40 states, the District of Columbia, and Guam, Ross is a significant player in the US off-price retail sector.
Lululemon Overview
Lululemon Athletica Inc. designs, distributes, and retails athletic apparel and accessories for both women and men. Its product range includes items suited for yoga, running, and training, sold through company-operated stores, e-commerce, and wholesale accounts globally. Operating 574 stores across multiple countries, Lululemon positions itself as a premium brand in the activewear market with a focus on lifestyle and fitness.
Key similarities and differences
Both companies operate in the consumer cyclical sector within apparel retail but serve distinct market segments. Ross focuses on off-price retail targeting middle and moderate income consumers primarily in the US, while Lululemon targets premium activewear customers globally. Ross operates a larger number of stores with a broader product mix including home fashions, whereas Lululemon emphasizes lifestyle and athletic gear with a direct-to-consumer and wholesale distribution model.
Income Statement Comparison
The table below presents a side-by-side comparison of key income statement metrics for Ross Stores, Inc. and Lululemon Athletica Inc. for the most recent fiscal year available.
| Metric | Ross Stores, Inc. (ROST) | Lululemon Athletica Inc. (LULU) |
|---|---|---|
| Market Cap | 62.3B | 22.9B |
| Revenue | 21.1B | 10.6B |
| EBITDA | 3.27B | 2.95B |
| EBIT | 2.82B | 2.51B |
| Net Income | 2.09B | 1.81B |
| EPS | 6.36 | 14.67 |
| Fiscal Year | 2024 | 2024 |
Income Statement Interpretations
Ross Stores, Inc.
Ross Stores exhibited steady revenue growth over 2020-2024, reaching $21.1B in 2024 with a 3.7% increase from 2023. Net income rose strongly, surpassing $2.0B in 2024, highlighting significant margin expansion. Gross and net margins remained favorable, with 27.8% and 9.9% respectively, and operating efficiency improved, supporting a solid 13.7% EPS growth in the latest year.
Lululemon Athletica Inc.
Lululemon’s revenue doubled from $4.4B in 2020 to $10.6B in 2024, growing 10.1% year-on-year. Net income also scaled positively to $1.8B in 2024, reflecting expanding profitability. Margins showed strength with a 59.2% gross margin and a 17.1% net margin in 2024, alongside a 20% EPS increase, signaling robust operational leverage and healthy margin growth over the period.
Which one has the stronger fundamentals?
Both companies demonstrate favorable income statement trends, with consistent revenue and net income growth, improving margins, and profitability. Ross Stores shows exceptionally strong net income and EPS growth percentages, while Lululemon boasts higher absolute margins and faster revenue growth. Each presents robust fundamentals, reflecting distinct strengths in scale, margin, and growth dynamics.
Financial Ratios Comparison
This table presents the latest key financial ratios for Ross Stores, Inc. (ROST) and Lululemon Athletica Inc. (LULU) based on their FY 2024 reports, facilitating a side-by-side comparison of their performance metrics.
| Ratios | Ross Stores, Inc. (ROST) | Lululemon Athletica Inc. (LULU) |
|---|---|---|
| ROE | 37.95% | 41.97% |
| ROIC | 16.83% | 29.23% |
| P/E | 23.66 | 27.98 |
| P/B | 8.98 | 11.74 |
| Current Ratio | 1.62 | 2.16 |
| Quick Ratio | 1.09 | 1.38 |
| D/E (Debt to Equity) | 1.03 | 0.36 |
| Debt-to-Assets | 38.12% | 20.73% |
| Interest Coverage | 40.79 | 0 (not reported) |
| Asset Turnover | 1.42 | 1.39 |
| Fixed Asset Turnover | 2.98 | 3.31 |
| Payout ratio | 23.38% | 0% |
| Dividend yield | 0.99% | 0% |
Interpretation of the Ratios
Ross Stores, Inc. (ROST)
Ross Stores displays a generally solid financial profile with favorable returns on equity (37.95%) and invested capital (16.83%), alongside a strong current ratio of 1.62 indicating good short-term liquidity. However, the company’s price-to-book ratio (8.98) and debt-to-equity ratio (1.03) are less favorable, suggesting valuation concerns and leverage risks. Ross pays dividends with a modest yield of 0.99%, but this is considered unfavorable, warranting cautious dividend sustainability monitoring.
Lululemon Athletica Inc. (LULU)
Lululemon exhibits strong profitability and efficiency ratios, including a high return on equity (41.97%) and return on invested capital (29.23%). Its liquidity ratios are robust, with a current ratio of 2.16, and debt metrics are favorable, reflecting conservative leverage. Lululemon does not pay dividends, consistent with its possible reinvestment strategy or growth focus, which aligns with its higher valuation multiples and emphasis on operational expansion.
Which one has the best ratios?
Lululemon’s ratios are more favorable overall, with 71.43% of metrics positive compared to Ross Stores’ 42.86%. Lululemon’s stronger returns, superior liquidity, and conservative debt profile contrast with Ross’s mixed valuation and leverage indicators. Nonetheless, both companies show some unfavorable aspects, particularly in valuation and dividend yield for Ross and absence of dividends for Lululemon, requiring investor attention to individual risk tolerance.
Strategic Positioning
This section compares the strategic positioning of Ross Stores, Inc. and Lululemon Athletica Inc., including their market position, key segments, and exposure to technological disruption:
Ross Stores, Inc.
- Leading off-price apparel retailer with significant scale in the US, facing moderate competitive pressure.
- Diverse segments including apparel, accessories, footwear, and home fashions targeting middle and moderate income households.
- Limited explicit exposure to technological disruption; retail focus on physical stores with some online presence.
Lululemon Athletica Inc.
- Specialty athletic apparel brand with global presence, facing competitive pressure in premium lifestyle segment.
- Concentrated in athletic apparel and accessories with two segments: company-operated stores and direct to consumer.
- Moderate exposure via interactive workout platform and e-commerce, integrating technology with retail model.
Ross Stores, Inc. vs Lululemon Athletica Inc. Positioning
Ross Stores operates a diversified portfolio targeting broad middle-income consumers, enhancing resilience but with lower brand exclusivity. Lululemon’s concentrated focus on premium athletic wear supports strong brand loyalty yet may limit market breadth. Both have growing profitability and strategic differentiation.
Which has the best competitive advantage?
Both companies demonstrate very favorable moats with growing ROIC exceeding WACC, indicating durable competitive advantages. Lululemon’s higher ROIC spread suggests a stronger value creation and profitability compared to Ross Stores over 2020-2024.
Stock Comparison
The past year revealed divergent stock price trajectories for Ross Stores, Inc. and Lululemon Athletica Inc., with Ross demonstrating strong bullish momentum and Lululemon experiencing a marked overall decline despite recent recovery signs.
Trend Analysis
Ross Stores, Inc. exhibited a bullish trend over the past 12 months with a 32.87% price increase and accelerating momentum. The stock ranged from a low of 123.54 to a high of 191.44, supported by moderate volatility (13.0 std deviation).
Lululemon Athletica Inc. showed a bearish trend over the same period, declining 54.65% with accelerating downward pressure. The stock’s price fluctuated widely, hitting a high of 464.94 and a low of 159.87, accompanied by high volatility (79.71 std deviation).
Comparing the two, Ross Stores delivered the highest market performance with sustained bullish acceleration, while Lululemon’s overall decline outweighed its recent short-term gains.
Target Prices
Here is the consensus target price outlook from verified analysts for Ross Stores, Inc. and Lululemon Athletica Inc.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Ross Stores, Inc. | 221 | 160 | 193.6 |
| Lululemon Athletica Inc. | 303 | 146 | 201.3 |
Analysts expect Ross Stores’ price to modestly appreciate from its current 191.44 USD, while Lululemon’s consensus target suggests a slight upside from 203.9 USD. Both stocks show potential but with notable valuation ranges.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for Ross Stores, Inc. and Lululemon Athletica Inc.:
Rating Comparison
Ross Stores, Inc. Rating
- Rating: B+, classified as Very Favorable
- Discounted Cash Flow Score: 3, Moderate rating
- ROE Score: 5, Very Favorable rating
- ROA Score: 5, Very Favorable rating
- Debt To Equity Score: 2, Moderate rating
- Overall Score: 3, Moderate rating
Lululemon Athletica Inc. Rating
- Rating: A+, classified as Very Favorable
- Discounted Cash Flow Score: 5, Very Favorable rating
- ROE Score: 5, Very Favorable rating
- ROA Score: 5, Very Favorable rating
- Debt To Equity Score: 3, Moderate rating
- Overall Score: 4, Favorable rating
Which one is the best rated?
Lululemon Athletica Inc. holds a higher overall rating (A+) and overall score (4) compared to Ross Stores’ B+ and 3. Lululemon also outperforms Ross Stores notably in discounted cash flow and overall financial health scores.
Scores Comparison
Here is a comparison of the financial health scores for Ross Stores, Inc. and Lululemon Athletica Inc.:
Ross Stores, Inc. Scores
- Altman Z-Score: 6.24, indicating a safe zone with low bankruptcy risk.
- Piotroski Score: 7, reflecting strong financial health and value.
Lululemon Athletica Inc. Scores
- Altman Z-Score: 9.31, also in a safe zone signaling very low bankruptcy risk.
- Piotroski Score: 6, showing average financial strength and value.
Which company has the best scores?
Lululemon has a higher Altman Z-Score, suggesting stronger bankruptcy safety, while Ross Stores has a better Piotroski Score, indicating comparatively stronger financial fundamentals. The scores reflect strengths in different areas for each company.
Grades Comparison
Here is a summary of the recent grades for Ross Stores, Inc. and Lululemon Athletica Inc.:
Ross Stores, Inc. Grades
The following table presents recent grades assigned by reputable financial institutions for Ross Stores, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| UBS | Maintain | Neutral | 2026-01-08 |
| Wells Fargo | Maintain | Overweight | 2025-12-16 |
| Baird | Maintain | Outperform | 2025-11-21 |
| UBS | Maintain | Neutral | 2025-11-21 |
| Evercore ISI Group | Maintain | Outperform | 2025-11-21 |
| Telsey Advisory Group | Maintain | Market Perform | 2025-11-21 |
| B of A Securities | Maintain | Buy | 2025-11-21 |
| Barclays | Maintain | Overweight | 2025-11-21 |
| JP Morgan | Maintain | Overweight | 2025-11-21 |
| Bernstein | Maintain | Market Perform | 2025-11-21 |
Ross Stores shows a predominantly positive grading trend, with multiple overweight, outperform, and buy ratings maintained by major firms.
Lululemon Athletica Inc. Grades
The following table shows recent grades assigned by credible financial institutions for Lululemon Athletica Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Stifel | Maintain | Hold | 2025-12-30 |
| Jefferies | Maintain | Hold | 2025-12-18 |
| Citigroup | Maintain | Neutral | 2025-12-12 |
| JP Morgan | Maintain | Neutral | 2025-12-12 |
| UBS | Maintain | Neutral | 2025-12-12 |
| Barclays | Maintain | Equal Weight | 2025-12-12 |
| BTIG | Maintain | Buy | 2025-12-12 |
| Piper Sandler | Maintain | Neutral | 2025-12-12 |
| Goldman Sachs | Maintain | Neutral | 2025-12-12 |
| Baird | Maintain | Neutral | 2025-12-12 |
Lululemon Athletica’s grades predominantly range from neutral to hold, with only one buy rating, reflecting a more cautious outlook.
Which company has the best grades?
Ross Stores has received generally stronger grades than Lululemon Athletica, with more buy and outperform endorsements. This indicates a more favorable analyst sentiment for Ross Stores, which could influence investor confidence and portfolio positioning accordingly.
Strengths and Weaknesses
Below is a comparison table highlighting the key strengths and weaknesses of Ross Stores, Inc. (ROST) and Lululemon Athletica Inc. (LULU) based on their recent financial and market data.
| Criterion | Ross Stores, Inc. (ROST) | Lululemon Athletica Inc. (LULU) |
|---|---|---|
| Diversification | Broad product range: apparel, home accents, accessories; stable revenue streams across multiple categories (e.g., Home Accents 5.5B, Ladies 4.6B in 2024) | Focused primarily on athletic apparel with strong emphasis on women’s products (6.7B in 2024) and growing men’s segment (2.6B) |
| Profitability | Moderate net margin (9.9%), strong ROIC (16.8%), ROE (38%), slightly favorable overall ratios | Higher net margin (17.1%), higher ROIC (29.2%), ROE (42%), overall favorable financial ratios |
| Innovation | Traditional off-price retail model with limited innovation focus | Strong innovation in product design, digital customer engagement, and brand loyalty |
| Global presence | Primarily North America focused with limited international footprint | Expanding global presence with direct-to-consumer and international growth strategies |
| Market Share | Significant share in off-price retail sector with durable customer base | Leading position in premium athletic apparel with increasing market penetration |
Key takeaways: Ross Stores offers diversification and stable profitability but faces challenges in innovation and global expansion. Lululemon excels in profitability, innovation, and growing international presence, making it a strong growth candidate with a more focused product portfolio.
Risk Analysis
Below is a risk comparison table for Ross Stores, Inc. (ROST) and Lululemon Athletica Inc. (LULU) based on the most recent 2024 financial and operational data.
| Metric | Ross Stores, Inc. (ROST) | Lululemon Athletica Inc. (LULU) |
|---|---|---|
| Market Risk | Beta 1.01, moderate volatility due to retail sector cyclicality | Beta 1.02, similar moderate volatility with higher income segment exposure |
| Debt level | Debt/Equity 1.03 (unfavorable), Debt to Assets 38.1% (neutral) | Debt/Equity 0.36 (favorable), Debt to Assets 20.7% (favorable) |
| Regulatory Risk | Moderate, US-focused retail regulations | Moderate, operates in multiple countries with variable regulations |
| Operational Risk | Large store footprint (~1,950 stores), supply chain complexity | Smaller footprint (~574 stores) but growing direct-to-consumer segment |
| Environmental Risk | Retail industry impact, moderate sustainability initiatives | Increasing focus on sustainability, but exposure to raw material sourcing risks |
| Geopolitical Risk | Mainly US market with some exposure to Guam and DC | Global presence including China, Europe, and others, higher geopolitical exposure |
In synthesis, Lululemon presents a lower debt risk and stronger financial stability, reflected in its favorable debt ratios and Altman Z-score in the safe zone. Ross Stores carries higher leverage and operational scale risks but benefits from strong profitability and asset efficiency. The most impactful risks are Ross’s elevated debt level and Lululemon’s geopolitical risk from its global operations, which investors should monitor closely.
Which Stock to Choose?
Ross Stores, Inc. (ROST) displays steady income growth with a 68.61% revenue increase over five years and favorable profitability metrics, including a 9.89% net margin and 37.95% ROE. Its debt level is moderate with a net debt to EBITDA of 0.29, and the overall financial ratios are slightly favorable. The company holds a very favorable B+ rating and demonstrates a very favorable economic moat with a growing ROIC well above WACC.
Lululemon Athletica Inc. (LULU) shows stronger revenue growth of 140.54% over five years and higher profitability, with a 17.14% net margin and 41.97% ROE. Its debt is comparatively lower, reflected in a 0.36 debt-to-equity ratio, and financial ratios are generally favorable. LULU holds an A+ rating and a very favorable economic moat, supported by a strong ROIC above WACC and consistent growth.
From an investor’s perspective, LULU might appear more attractive for those seeking high growth and profitability, given its stronger income growth and financial ratios. Conversely, ROST could be seen as suitable for investors prioritizing stability and moderate growth due to its slightly favorable ratios and solid moat. The choice could depend on the investor’s risk tolerance and investment strategy, with LULU appealing to growth-oriented profiles and ROST to those favoring quality and stability.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Ross Stores, Inc. and Lululemon Athletica Inc. to enhance your investment decisions:
