Lululemon reveals growth plan for the next 5 years

Lululemon launched a fresh five-year growth plan on Saturday, and sent the shares up about 1% in premarket trading.

bra and leggings maker says it plans to double sales of its men's and online businesses and quadruple international revenues by 2023. It targets annual revenue growth In the low teens of the next five years, and now the operating revenue growth is expected to exceed revenue growth each year, with "modest" gross margin expansion, and earnings per share growth either equals or exceeds revenue growth annually.

The announcement comes as Lululemon strikes of New York analyst day Wednesday, an event that has not lasted five years and one marking the first formal introduction of CEO Calvin McDonald to Wall Street since he assumed the leading role in August

Analysts and Investors Look For McDonald's , who came to Lululemon from the cosmetics company Sephora after Laurent Potdevin was thrown out as CEO in the form of violations, keep the moment on athletic clothes.

Lululemon shares have risen more than 80% over the past 1[ads1]2 months, compared to the growth of only 1.5% in the S & P 500 Retail ETFs (XRTs).

"We believe Lululemon has a unique opportunity to push beyond traditional expectations to develop innovative products and become a full experience brand that creates compelling experiences for guests," McDonald said in a statement in front of the meeting.

Key focus areas of Lululemon of late include the expansion of its men's business, growth overseas in markets such as China, shaping a stronger e-commerce platform and building a base of loyal customers. One initiative has been to test a new loyalty program, where members pay annual fees for accelerated shipping, training classes and other benefits.

However, rivals Nike and Under Armor have both stated that they intend to target female shoppers more with new yoga pants and sports bras, threatening to wade into the Lululemons turf. But Lululemon has in turn said that men's business presents the greatest growth opportunity for the brand, going forward. It is said that it is on track to get that business $ 1 billion in sales, annually, by 2020. It will also sell personal care products, such as deodorants, and seek other ways to lure customers into their stores.

McDonald on Wednesday said Lululemon is also planning to invest more "in creating dynamic experience moments" for customers. It includes opening a 25,000 square foot shop in Lincoln Park in Chicago in July, which will have yoga studios, meditation rooms and juices and food options, he said.

In the past fiscal year, Lululemon's sales amounted to $ 3.3 billion, with store sales opening at least 12 months by 18%, compared to a 7% growth over the previous year.

Nike, which brought in $ 36.4 billion globally in 2018, has 18.3 percent of the total US sportswear market, which includes clothing and shoes, according to data prepared by Euromonitor. Adidas is second with 6 percent, Under Armor with 4.1 percent, Skechers with 2.6 percent and Lululemon with 1.9 percent at the end of 2018, according to the company.

In women's athletic clothing category, though, Lululemon is just seconds to Nike, according to data prepared by the NPD Group.

Before Wednesday's meeting, a handful of analysts said they believe Lululemon will reach its sales goal – for $ 4 billion next year – ahead of schedule. Nominal Instinet analyst Simeon Siegel believes the dealer's sales can darken $ 6.5 billion by 2023.

"However, sales or margins seem to be peaking," Siegel said in a note to clients. "It seems more likely [management] is working to maintain sales growth at the expense of some margin than vice versa."

This is a developing story. Please check back for updates.

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