The strain distribution around the unstiffened and stiffened circular cutout of the isotropic stainless steel (ANSI type 304) and the GFRP laminated composite cylindrical shells subjected to axial compression are studied. The experimental results are obtained and compared with numerical analysis. In experiment, the strain is measured around the circular cutout by strain measuring system under the axial uniform compression loading. The numerical analysis is performed by the commercial finite element code ANSYS. The strain concentration factor (SCF) is defined to investigate the strain concentration around the circular cutout. The SCF of the stainless steel cylindrical shell with a stiffened cutout is decreased 39% in experiment and 50 % in numerical analysis. The SCF of GFRP laminated composite cylindrical shell is decreased 22% in experiment and 31 % in numerical analysis.