Nike, Lululemon not only stocks to play athleisure boom, Barron’s says

The dominance of the athleisure trend has turned what used to be just a subset of the athletic apparel sector into a full-blown industry with a valuation of more than $350B globally, Sabrina Escobar writes in this week’s edition of Barron’s. It has also spurred a glut of competition. While there’s arguably still just one pure-play public athleisure company – Lululemon (LULU) – the market also includes all the established and upstart sportswear and shoe makers; mainstream apparel giants such as Gap (GPS), and a host of smaller, private brands. From 2016 to 2022, Lululemon’s slice of the U.S. sportswear pie grew from 1.8% to nearly 4%, according to GlobalData. In the same time frame, Nike’s (NKE) market share fell from 20.7% to 16.3%. Another athletic company to watch is On Holding (ONON), which has been on a tear recently, with shares up a little over 50% for the year, the author says. Among the broader apparel companies, the Street is cautious on Athleta’s parent company, Gap, which is still in the early stages of its attempted turnaround. For a stronger bet, the publication says to consider American Eagle Outfitters (AEO), which has seen strength from Aerie, the company’s active and intimates segment.