What’s going on here?
Lululemon reported bouncing results this week, as the sportswear brand showed just how far it can stretch.
What does this mean?
Brunch in jeans and a nice top is fine, but brunch in comfortable leggings that guarantee you compliments couldn’t be better. No surprise, then, that Lululemon – maker of workout and athleisure garms that you’ll spot as often in coffee shops as you would gyms – is as popular as ever. The lycra-heavy firm won over more market share in the US after donning stores with its profitable new performance sports lines. Mind you, sleek sportswear was flying off the shelves outside North America too: international sales were up 52% last quarter from the same last year, spurred on by China’s reopening and store openings in spots like Thailand. Lululemon skipped away having beat expectations for both profit and revenue, and upped its full-year outlook too.
Why should I care?
For markets: Stop trying to make Gap happen.
Lululemon’s fellow trendsetters Abercrombie & Fitch and Urban Outfitters’ sales were in vogue last week too, growing as their affluent fashionista fans stayed loyal and kept spending. Meanwhile, the likes of Gap and Macy’s are being left on the shelves, as the brands’ more money-conscious target customers watch their budgets. That’s probably why the first three have outperformed the S&P 500 this year, while the others lag behind.
The bigger picture: Sports bras for everyone.
The sportswear supreme has ambitious plans, aspiring to double its annual revenue from 2021 by 2026. Lululemon will be leaning heavy on those international markets: they only make up a fifth of the firm’s sales right now, but they’re brimming with potential. That’s why Lululemon plans to open new stores in Asia’s fastest-growing areas, along with focusing on its men’s and online segments. Get your jockstrap pre-orders in, boys.
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