Lululemon Athletica vs. On: Which Consumer Stock Is a Better Buy for 2027?
Investors face a choice between established market leadership and high-growth momentum when comparing Lululemon Athletica (LULU -0.88%) and On (ONON -0.48%). Both companies are vying for dominance in the competitive athletic category.
Lululemon is known for its high-end yoga and technical apparel, whereas On has built its reputation on innovative running footwear. This comparison explores their financial health and market positioning to determine the better long-term pick.
The case for Lululemon Athletica
Lululemon Athletica designs and sells technical athletic apparel, footwear, and accessories through an omni-channel model. It reaches customers via more than 800 company-operated stores and a robust e-commerce platform across multiple countries.
The company also leverages wholesale channels by partnering with fitness studios and university retailers. This diversified approach helps it maintain high brand visibility and reach a loyal customer base in the apparel sector.
In FY 2025, revenue reached nearly $11.1 billion, representing revenue growth of approximately 4.9% compared to the prior year. Net income for the period was roughly $1.6 billion.
LULU – Lululemon Athletica Inc.
$110.79-$0.98 (-0.88%)
NASDAQ · As of 4:00 PM ET 11/06/26
The case for On
On develops and distributes premium performance sports products, primarily focusing on its innovative footwear technology. As of the end of 2025, the company operated nearly 70 retail locations worldwide and maintains a strong presence through wholesale partners and its direct-to-consumer e-commerce platform.
Its growth strategy emphasizes global expansion, with a significant retail footprint already established in China. The company relies on its high-performance brand image to attract runners and lifestyle consumers willing to pay a premium price.
In FY 2025, revenue reached roughly $3.7 billion, which reflects impressive revenue growth. Net income for the fiscal period was approximately $246 million.
ONON – On Holding
$37.36-$0.18 (-0.48%)
NYSE · As of 4:00 PM ET 11/06/26
Risk profile comparison
Lululemon Athletica faces several legal and operational hurdles, including multiple class action lawsuits regarding its financial guidance and brand health. The company is also navigating a management transition at the CEO position. External factors like changes in U.S. tariff policy and supply chain concentration in Asia add further uncertainty. Increased competition from rivals that can quickly imitate technical designs may also pressure its historical brand premium.
On must navigate the challenges of scaling a global logistics network while competing against much larger footwear giants like Nike. Maintaining its premium pricing and brand exclusivity becomes more difficult as the company moves into broader wholesale distribution. Inventory management is a critical risk, as any miscalculation in demand could lead to heavy discounting that hurts net margin. The company also remains sensitive to shifts in consumer discretionary spending across its primary markets in Europe and North America.
Valuation comparison
Lululemon currently offers a more conservative valuation profile, while On carries a premium multiple that reflects its significantly faster revenue growth trajectory.
MetricLululemon AthleticaOnForward P/E10.7×19.6xP/S ratio1.1×6.1x
Which stock would I buy?
Each company provides slightly different offerings, but both are generally in the fitness and activewear segment. Both are considered premium brands and can struggle when consumers tighten their budgets. They may like Lululemon pants or shoes from On, but in tighter times, a consumer may just trade down to a different brand with similar items at lower prices. That said, there’s still opportunity to find the right stocks in that sector of the market. According to Fortune Business Insights, the global sportswear market is expected to grow from $235 billion in 2026 to $402.5 billion by 2034.
For this battle, I would choose On for one main reason. The reason is that On is more in the opening stretch of its journey, with less than 100 stores. In comparison, Lululemon ended 2025 with 811 stores, and it’s transitioning into a more mature company, looking for what its next stage will look like. Also, you can see it in the sales growth. For the second quarter of 2026, On reported that revenue increased 13.5%, while Lululemon reported net revenue decreased by 4%. Ultimately, anyone interested in On should dig into its financials a bit more before considering it as an investment. Still, based solely on a comparison with Lululemon, I’d rather own On at this moment in time.
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.