Lululemon Outlines Growth Plan
Lululemon outlined its growth plan last week, which calls for doubling revenue and earnings by 2020.
The company is now led by former Burton CEO Laurent Potdevin, who had hired several new leaders for the executive team.
The four pillars of that growth include:
- In product, expanding the women’s performance category, including improving the tops business and growing men’s with a focus on training, running and yoga.
- Expanding the store base in North America. The company will focus mostly on three formats: the 3,000 square foot mainstay store, larger formats in key locations and smaller stores in smaller markets.
- Improving Lululemon’s digital ecosystem and growing e-commerce sales to a quarter of total revenue by 2020.
- Expanding the international business, which is underdeveloped, to 20% to 25% of total sales by 2020.
While many retailers had a rough Q4, Lululemon’s revenue of $704.3 million grew 22% in constant currency and 17% in reported currency.
Total comp sales rose 11%. Stores comps rose 5% and e-commerce comps rose 33%.
The women’s business performed well, with double digit increases in bottoms.
Men’s continues to expand, with sales up 24%. The company sees a big opportunity with men’s, especially in the training, running and yoga categories. Currently, the men’s business accounts for 16% of total sales.
Revenue grew 15% to $2.1 billion.
Total comps rose 10%.
Gross margin: 48.4%
Net income: up 11% to $266 million.
The aim is for the women’s business to grow to $3 billion in annual revenue by 2020, and for men’s to grow to $1 billion.
Lululemon has decided to unify the men’s and women’s design function under one leader in hopes of moving from a “house of brands to a branded house,” executives said.