Better Buy: Lululemon vs. Under Armour

In this video, Motley Fool consumer-goods editor Austin Smith takes a close look at two high-end retailers of sports apparel: Under Armour and lululemon athletica, to see whether he can distinguish for us which of the two is the better place to put your money in this sector. The companies look somewhat alike on paper, with very similar numbers in many of their ratios, so Austin takes a look at the broader story to find the difference.

His analysis? Under Armour is the disruptive bug, gaining momentum, but attracting a lot of unwanted attention from the big players such as Nike and Adidas. Lululemon, meanwhile, is the niche innovator, distinct from the big boys, and even being imitated itself.

When you look at companies like Lululemon, you see just how important innovation is in retail today. The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of last century. Only those most forward-looking and capable companies will survive, and they'll handsomely reward investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in our special report. Uncovering these top picks is free today; just click here to read more.