The publicly listed Canadian sportswear brand Lululemon Athletica Inc. increased sales by 29 percent to around 1.9 billion euros (1.9 billion US dollars) in the second quarter of fiscal year 2022. The growth is based on sales increases of 28 percent in North America and 35 percent internationally. Stores increased their sales by 16 percent and direct sales by 30 percent, taking the share of sales from the DTC business to 42 percent of total sales (in the second quarter of 2021 it was about the same at 41 percent). Gross profit increased 25 percent to 1.1 billion euros (about $1.1 billion) and gross margin fell 160 basis points to 56.5 percent. A total of 21 new company-operated stores went online in the second quarter, bringing the total to 600 Lululemon stores worldwide.
Lululemon’s current growth plan “Power of Three x2” sees the business doubling from €6.25 billion (approximately US$6.25 billion) in net sales in 2021 to €12.5 billion (approximately US$12.5 billion). dollars) by 2026. The key pillars of the plan are product innovation, customer experience (which Lululemon calls guest experience), and market expansion. The growth strategy includes a plan to double menswear net sales, double direct sales and quadruple international net sales compared to 2021.
Launch in Spain and first outdoor collection
The company only announced its market entry in Spain in July. The first stores in Madrid and Barcelona are scheduled to open this September. Lululemon currently operates 40 stores in Europe (as of July 5, 2022). To expand the collection, Lululemon also launched the first outdoor collection for hiking in July, consisting of 33 pieces including a backpack.
Calvin McDonald, Chief Executive Officer, stated, “The momentum in our business continued in the second quarter, driven by the strong response from our guests to our product innovations, community enablements and Omni experience. I would like to express my gratitude to our teams around the world for their continued commitment and enthusiasm for our brand, which has enabled us to achieve this high level of performance. Looking ahead, we look forward to successfully executing our Power of Three ×2 growth plan and continue to create value for all of our stakeholders.”
For 2022, the company expects net sales of between 7.8 and 7.9 billion euros (around 7.8 and 7.9 billion US dollars), which corresponds to a compound annual growth rate of around 26 percent.