Which brand has better global potential? I know Lulu currently has a higher earnings growth rate, but TRLG's growth rate is being impacted by switching to less wholesale and more retail. So below, I've posted the growth rates comparing direct to consumer sales of TRLG and Revenue of Lulu:
TRLG: Direct to consumer growth rate Q4: 38.4% LULU: Company guidance of revenue growth rate Q4: 47.2%-48.4%
The rates above are both great, and I would expect there's room for improvement at TRLG given their current plans. However, with LULU at 8.5 times the market cap of TRLG, I don't think TRLG is getting the higher multiple it deserves.
This is a comparison of extremes. LULU's EV/EBITDA is 29.60 and TRLG's is 5.04, at least according to Yahoo Finance. TRLG's book value per share is over twice LULU's with no goodwill or intangible assets. LULU has had the advantage of not having to transition from a wholesale operation to a direct retailer. While TRLG does deserve a higher multiple, LULU's might be on the high side.