But analysts worry that the growth won’t last forever.
“Lululemon’s clearly one of the strongest retail growth stories,” Nomura retail analyst Simeon Siegel said in a note to investors earlier this month.
“However, it seems either sales or margins are approaching a peak.” Lululemon is still known predominantly as a women’s brand — at the end of last year, about 70% of Lululemon’s business came from its women’s category.
By building out full men’s departments in more stores, the company plans to use them as marketing vehicles to promote brand awareness for its budding men’s business.
The company expects to more than double the size of its men’s revenues by 2023, while carrying out continued expansion in the women’s and accessories businesses.
Both existing and new product categories are planned to grow, with lines supporting yoga, running and training.
To drive brand awareness in the Chinese market, chief operating officer Stuart Haselden said at investor day that the company plans to invest more in building up a We Chat channel as well as its own China domain. He also said that Lululemon would invest in community events.
“We’re going to leverage the tried and true community strategies and adapt them to regional tastes and opportunities, and amplify them via new investments in digital,” Haldsen said.
The retailer’s core women’s business and its agile store formats in North America will also remain focus areas and are expected to generate revenue growth in the low double digits annually for the next five years.“We’re ready to build upon our success and embark on the next phase of growth at lululemon to realize the full potential of our brand,” said CEO Calvin Mc Donald.
“We believe lululemon has a unique opportunity to push beyond traditional expectations to develop innovative products and become a fully experiential brand that creates compelling experiences for guests.”The Power of Three strategic plan also includes contributions from new product categories and offerings, such as its membership program which is currently in pilot, as the athletic apparel retailer further leverages its position as an experiential brand for guests across channels.