Critical Survey: Duluth (NASDAQ:DLTH) versus Warby Parker (NYSE:WRBY)

Duluth (NASDAQ:DLTH) and Warby Parker (NYSE:WRBY) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, earnings, profitability, risk and valuation.

Risk and Volatility

Duluth has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500. Comparatively, Warby Parker has a beta of 1.89, meaning that its stock price is 89% more volatile than the S&P 500.

Institutional and Insider Ownership

24.4% of Duluth shares are held by institutional investors. Comparatively, 93.2% of Warby Parker shares are held by institutional investors. 40.4% of Duluth shares are held by company insiders. Comparatively, 16.8% of Warby Parker shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings for Duluth and Warby Parker, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Duluth	0	3	0	1	2.50
Warby Parker	1	3	6	0	2.50

Duluth currently has a consensus price target of $5.00, indicating a potential upside of 23.15%. Warby Parker has a consensus price target of $30.00, indicating a potential upside of 14.17%. Given Duluth’s higher probable upside, equities research analysts plainly believe Duluth is more favorable than Warby Parker.

Earnings and Valuation

This table compares Duluth and Warby Parker”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Duluth	$565.18 million	0.27	-$16.39 million	$0.14	29.00
Warby Parker	$871.91 million	3.26	$1.64 million	$0.07	375.39

Warby Parker has higher revenue and earnings than Duluth. Duluth is trading at a lower price-to-earnings ratio than Warby Parker, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Duluth and Warby Parker’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Duluth	1.07%	-3.03%	-1.21%
Warby Parker	0.85%	3.36%	1.72%

Summary

Warby Parker beats Duluth on 9 of the 14 factors compared between the two stocks.

About Duluth

Duluth Holdings Inc. sells casual wear, workwear, and accessories for men and women under the Duluth Trading brand in the United States. It provides shirts, pants, underwear, tanks, outerwear, footwear, accessories, and hard goods. The company offers its products under various trademarks, trade names, and service marks, including Alaskan Hardgear, Armachillo, Ballroom, Bucket Master, Cab Commander, Crouch Gusset, Dry on the Fly, Duluth Trading Co, Duluthflex, Fire Hose, Longtail T, No-Yank, No Polo Shirt, Wild Boar Mocs, and Buck Naked. Duluth Holdings Inc. markets its products through its Website, catalogs, and retail stores. As of May 17, 2018, it operated 36 retail stores. The company was formerly known as GEMPLER'S, Inc. Duluth Holdings Inc. was founded in 1989 and is headquartered in Belleville, Wisconsin.

About Warby Parker

Warby Parker Inc. provides eyewear products in the United States and Canada. The company offers eyeglasses, sunglasses, light-responsive lenses, blue-light-filtering lenses, non-prescription lenses, and contact lenses. It also provides accessories, such as cases, lenses kit with anti-fog spray, pouches, and anti-fog lens spray through its retail stores, website, and mobile apps. In addition, the company offers eye exams and vision tests. Warby Parker Inc. was incorporated in 2009 and is headquartered in New York, New York.