Dive Brief:
- Lululemon on Tuesday said the company officially checked off another goal on its Power of Three growth strategy two years ahead of schedule: surpassing $6 billion for the first time. The athleisure retailer clocked 42% revenue growth over 2020 to reach $6.3 billion.
- The company has already achieved its goals of doubling its men's business and doubling e-commerce, and CEO Calvin McDonald said on a call with analysts that it will quadruple international revenue by the end of the year.
- A week after the first footwear product from Lululemon became available for purchase, McDonald said the customer response to the running shoe has "dramatically exceeded our expectations." A cross training shoe, a training shoe and an "elevated slide" will launch in the coming months.
Dive Insight:
In addition to surpassing $6 billion in revenue in 2021, Lululemon — which made more than Under Armour for the year — also notched significant growth in other key metrics. For both the fourth quarter and the full year, Lululemon exceeded both 2020 and 2019 numbers for net income, operating income and net revenue.
When it comes to Mirror, however, Lululemon executives said only that the home fitness division performed "in-line" with Lululemon's expectations for the year and that in 2022, revenue would grow over 2021. The company plans to share more on Mirror at its analyst day, where it will also reveal a new five-year growth plan, and McDonald said he was "enthusiastic" about the business.
Lululemon launched its first collection designed specifically for tennis on Tuesday and is also eyeing growth in a couple of other sports categories, including golf and hiking. Golf will roll out next week, McDonald said. Tennis, golf and hiking are "secondary sweat activities" for Lululemon's customers, according to McDonald, who also noted some athletes were already wearing Lululemon's core products for those sports. The company's plan is to create additional products that cater specifically to those categories but still fit in with Lululemon's core offering.
"The versatility of our product is where we really play to our strengths," McDonald said of the sport-specific collections Lululemon launches.
Lululemon's Q4 and 2021 performance
| Metric | Q4 | Year-over-year growth | 2021 | Year-over-year growth |
|---|---|---|---|---|
| Net revenue | $2.1 billion | 23% | $6.3 billion | 42% |
| Operating income | $590.6 million | 29% | $1.3 billion | 63% |
| Net income | $434.5 million | 31.7% | $975.3 million | 65.6% |
Source: Lululemon press release
While the retailer is branching into categories covered by some of its sports generalist competitors, Lululemon's core business still represents the majority of the company's growth, McDonald said. Lululemon declined to give a sales target for its footwear segment for the year ahead, with Chief Financial Officer Meghan Frank saying it is a small portion of the business and is still in a "test and learn" phase.
For 2022, Lululemon is projecting revenue of up to $7.62 billion, which would be an increase of 22% on the high end. The company is planning to open 70 net new stores for the year, which is an increase in its usual store opening cadence.
