The world of dress is changing anytime. Lululemone athletica ,Lulu 1.10%, Recently a consumer has feeling the brunt of change, as shopkeepers spend less on athleizures compared to the hearts of pandemic brands. The shares of the famous apparel veteran are 54% below the high level of all time, even though the market is growing, and the stock is trading at its lowest value-to-Kamai ratio (P/e) In years. Investors are also worried about how tariffs will affect profitability.

And yet, the company keeps creating new height in revenue and earnings and is now starting to return capital with shareholders at a depressed price. Does this beaten-down stock price means that Lululemon is going to make a millionaire for your portfolio today? Let us allow the numbers to tell the story.

New crop of contestants, plus tariff

Lululemon has been a very big winner in the Atlasyor space in the last decade. Its leggings, tops and jackets became extremely popular with women shopkeepers in North America, causing revenue to $ 11 billion to about $ 11 billion in the last 12 months ago. In recent years, Lululemon has successfully expanded men’s ethleicure and international markets.

If the revenue keeps on growing, why is the stock down? Seeing the success of Lululemon, a lot of copyers have started spring, such as Alo Yoga, Wuori and Athlet. Using the power of social media affected and venture capital banking, these brands have aggressively tried to step on Lululemon’s turf. Nike Has also tried to achieve some shopkeepers of Lululemon. The story around these rivals is strong, but the underlying number does not show a huge danger. Lululemone’s revenue of North America increased by 4% year on a constant currency basis compared to a 7% decline for Nike. We do not have figures for many of these upstart brands, but Athlet saw a decline in 6% revenue in the same period.

Covering it, the lululemone is doing well for the competition, even in a consumer spending environment that is difficult for apparel in North America. Tariffs will affect business as they currently stand, and this is something that lululemone will have to deal with. However, it is only expecting a small impact on its profit margin until the tariff rates increase greatly on its imports. With 23% operating margin, Lululemon will still be able to generate a healthy benefit with these new tariffs.

Rapid growth in China despite a consumer recession

Today, the most influential part of Lululemon’s business is its strong growth in China. After a housing property bust in the Asian economy in 2021, consumer expenses have fallen, which has been a headwind for garment companies. Despite this, Lululemon is growing rapidly in the country, the revenue of China’s mainland is revenue in the previous quarter at 22% years in the previous quarter.

China now produces $ 1.6 billion in annual revenue for Lululemone, scratching the surface in the market with more than 1 billion people with the brand. If the consumer expenses are cured, the revenue growth for lululem in China may increase, which is made for any weakness in North America. Other geography such as the rest of Asia and Europe only produce $ 1.1 billion in annual sales, but are growing quickly, giving Lululemon even more space to expand their brand internationally if the North American market is near saturation.

This large growth driver investors need to be seen in the coming years.

Lulu pay ratio Data by Ycharts,

Is Lululemon a millionaire manufacturer?

With Lululemone Stock Duy in the previous year, its income ratio has fallen quite aggressively. The follower P/E ratio now sits at 16, which is close to its lowest level in the last decade and much lower than the market average.

To take advantage of this falling stock price, management is starting to increase its shares recurrent. It spent $ 430.4 million on the share recurrent in the last quarter, which is about 1.5% of its current market cap. Buying so much stock back so quickly can reduce lululemone shares, causing increased earnings per share (EPS) and free cash flow per share, twin drivers of stock price benefit in long races.

Lululemon now looks like a cheap stock to buy. If sales continue to grow despite tariff turmoil, the stock can reward investors well in the long run, especially if the company reinforces the stock in a low P/E ratio. However, investors should understand that the garment industry is fine; Styles may come quickly without rhyme or cause, and therefore it is difficult to call Lululemone Stock a millionaire manufacturer. Despite this, I think Lululeman is a great stock for investors today to buy and catch.