Building off a year of growth, Lululemon on Thursday reported first quarter revenues increased 88% to $1.2 billion, up from $652 million last year when stores were temporarily shut due to the pandemic, according to a company press release. Net revenue rose 57% over 2019, the company said.
Direct-to-consumer net revenue increased 55%, but — as brick-and-mortar sales rebounded — sales represented 44.4% of total net revenue, down from 54% during Q1 2020. Men's growth outpaced women's compared to both 2020 and 2019, according to Lululemon CEO Calvin McDonald on a call with analysts.
Unlike many retailers, the company was in the black a year ago, but net income still rose more than 400% from 2020 and 50% from 2019 to $145 million.
CEO Calvin McDonald attributed Lululemon's Q1 results to a number of factors including continued expansion in e-commerce, performance across categories and the return of in-store shoppers.
The results showed developments across channels and "continuing momentum for athleisure with no signs of slowing, even as consumers shift into the new post pandemic normal," Wedbush analyst Jen Redding said in emailed comments.
The athletics retailer also said it was on pace to deliver commitments from its Power of Three growth plan, which centers product innovation, customer experiences on and offline, and market expansion.
One potential driver of that growth is the company's investment in Mirror, an interactive workout platform that features live and on-demand classes. Lululemon acquired Mirror a year ago for $500 million as housebound customers were looking for at-home workout solutions in the middle of the pandemic.
Mirror, which operates as a standalone company, is expected to deliver between $250 million to $275 million in revenue this year, according to McDonald. By mid-June Mirror will be in nearly 90 physical stores, with the company anticipating it will have around 200 shop-in-shops by the holiday season.
Yet, CFO Meghan Frank notably "wouldn't commit to a timeline for breakeven for the concept, suggesting a potential investment cycle ongoing into next year," according to emailed comments from Wells Fargo analysts led by Ike Boruchow. "[T]he situation with Mirror is a bit of a head-scratcher, as management seems very pleased with the early results, yet they continue to shy away from identifying profitability timelines."
Additionally, the company is seemingly on track regarding its goal to double men's by 2023. The retailer closed its men's only stores two years ago and folded the men's experience into its other stores, as it refocused on its e-commerce efforts.
"We learned that guests respond well to Lululemon as a dual-gender brand, and when we expand our stores, we create space to merchandise the men's assortment in a more impactful way," a company spokesperson said at the time.
McDonald said the men's business accelerated through 2020 and into 2021 and drove growth slightly ahead of women's.
"We were performing well before the pandemic. I think we led the peer group during the pandemic, and we're excited about the performance and confidence in our ability to continue to perform post-pandemic," McDonald said.