7 Most Profitable Canadian Stocks To Invest In

5. Lululemon Athletica (NASDAQ:LULU)  

TTM Net Income: $1.63 Billion  

5-Year Net Income CAGR: 25.02%  

Number of Hedge Fund Holders: 45  

Lululemon Athletica (NASDAQ:LULU) is a Canadian company that sells athletic and casual apparel. The company also Lululemon also sells gloves, mittens, hats, shoes, bags, yoga mats, water bottles, and personal care products such as deodorant and dry shampoo. Lululemon Athletica (NASDAQ:LULU) also owns luxury streetwear brand called Lab and has expanded its product line by adding footwear.

Lululemon Athletica’s (NASDAQ:LULU) focus on innovative and high-quality materials, such as its proprietary Everlux fabric, has enabled it to maintain a premium pricing strategy, resulting in impressive gross margins of 55.5%. Additionally, the company’s community-based advertising approach, which partners with local athletes and influencers, has created a loyal customer base and fostered a strong brand identity. The company’s direct-to-consumer sales strategy, which includes over 700 owned stores and a strong e-commerce platform, allows for better margins and control over sales.

Lululemon’s (NASDAQ:LULU) growth opportunities in international markets, such as China, are significant. The company’s Chinese business grew 34% YoY in the last quarter, with same-store sales increasing 17%. The company plans to expand its store count in China to 260 by 2026,

Furthermore, the company’s men’s wear business, which grew 11% QoQ in the last quarter, provides another avenue for growth.

From a financial perspective, Lululemon Athletica (NASDAQ:LULU) has a strong cash position, with $1.6 billion in cash and no debt, which provides flexibility to invest in growth initiatives and return capital to shareholders through share buybacks. The company’s free cash flow has grown at a 34% CAGR over the past eight years.

Lululemon Athletica’s (NASDAQ:LULU) net income has increased by an impressive CAGR of 25.02% over the last 5 years. For the twelve months ending July 31, the company’s net income stood at $1.63 billion. Lululemon Athletica (NASDAQ:LULU) is well-positioned to continue to dominate the global athleisure market and deliver long-term value to shareholders. As of the second quarter, 45 hedge funds have invested $1.06 billion in the company.