For a company that’s built its 25-year-old yoga pants franchise into a multi-category player in the athletic apparel industry, Vancouver-based Lululemon Athletica said Wednesday (April 20) that the next five years of its journey will be led by the growth of its international, digital and menswear businesses.
In a statement coinciding with its annual analyst day meeting being held in New York today, the premium purveyor of sports and workout gear extended upon the growth trends it outlined a month ago as it reported fourth-quarter earnings and unveiled plans that it was expanding into sneakers, tennis and golf.
Since then, Lululemon has bucked a downdraft in the retail industry, as its shares have rallied more than 30% in 30 days, at a time when the S&P 500 and the S&P Retail Index have fallen 2% and 5% respectively.
“We remain early in our growth journey, with our strong product engine, proven ability to create enduring guest relationships, and significant runway in core, existing, and new markets,” Lululemon CEO Calvin McDonald said in a statement from the company, which aims to quadruple its international revenues while doubling both its digital and men’s categories by 2026.
Putting the Lou in Lulu
It’s not as if Lululemon wasn’t already growing in those targeted areas and swiping business and customers from larger global rivals like Nike and Adidas.
On the company’s earnings call in March, CFO Meghan Frank told investors it was “important to note that we remain in the early days of our growth trajectory outside of North America,” noting that international revenues were up 50% in 2021 but still only amounted to 15% of Lululemon’s total worldwide sales.
“From 2019 to 2021, in the adult active apparel industry, lululemon gained more market share globally than any brand in this industry,” the company’s latest growth plan proclaimed, pointing to sales that had gone from $3.3 billion in 2018 to $6.25 billion in 2021.
As far as the move to outfit more men and bring guys into its stores and website, the retailer said its ambition 5-year plan was the result of achieving it prior growth target for the category two years ahead of schedule.
Mind the Gap
To be sure, Lululemon will face increasing competition from rivals with existing footprints and decades of international market presence, such as the Gap’s Athleta brand which currently does not offer men’s apparel. Even with the company’s new growth targets in place, the Canadian company said it was not losing sight of its core market and said it was also going to continue to expand its women’s and accessories businesses.
Dial Up Digital
Not unlike its aspirations in men’s and international, Lululemon’s plans to double its digital business follow a similar trajectory and continuation of past growth rates, the company said, noting that its digital revenue had tripled between 2018 and 2021 and would grow 2x again by 2026.
To do so, the company said it would “harness the power of guest relationships” via stronger physical and digital retail connections, continued product innovation, and brand and community-building efforts including its “Like New” resale program that will be available nationwide starting Friday, April 22 — Earth Day.
Based on what it called “learnings from its pilot membership program,” as well as strong customer feedback, Lululemon also said it will launch a new, two-tiered membership program later this year.
“The intent of the program is to build stronger engagement with its brand, community, and products, to create the most immersive fitness marketplace in the industry,” the company said, in a nameless call-out of its many rivals.