Lululemon aims to double its 2021 revenue in the next five years, putting it on track to hit $12.5 billion in sales by 2026, as the retailer rides a wave of Covid pandemic-fueled demand for workout clothes.
Lululemon on Wednesday announced a handful of longer-term growth targets, including for its men's business, ahead of a scheduled analyst day event. It cited three key drivers of momentum in the coming years: product innovation, customer experience and market expansion.
The athletic apparel retailer is aiming to double its men's revenue, double its digital sales and quadruple international revenue, all in the next five years. Lululemon teased the official debut of a new membership offering in the coming months, as well as its foray into Spain and Italy through new brick-and-mortar shops.
"We remain early in our growth journey," said Lululemon Chief Executive Calvin McDonald, in a statement. "I am excited about taking our growth strategies to the next level."
The company's shares fell around 2% in early trading.
The retailer's sales grew more than 40% in 2021 from the prior year, totaling $6.25 billion, fueled by a strong direct-to-consumer business and overseas momentum for its yoga pants, leggings and sports bras. That's compared with revenue of $3.98 billion in 2019.
In April 2019, Lululemon had laid out a number of financial targets, including doubling its then-nascent men's business by 2023. It ended up achieving the men's goal two years ahead of schedule and also tripled digital revenue from 2018 to 2021.
Citing data from The NPD Group, Lululemon said it gained more market share globally than any brand in the adult active apparel industry from 2019 to 2021. Its rivals include giants such as Nike, Adidas and Under Armour, as well as up-and-coming brands like Vuori for men and Sweaty Betty for women.
A desire among consumers to dress comfortably while spending more time at home has propelled many of these retailers during the Covid pandemic.
Lululemon shares are up about 25% over the past 12 months. The stock closed Tuesday at $404.66.
The company said Wednesday that it projects earnings per share growth to outpace revenue growth in the next five years. It expects to increase the square footage of its stores annually in the low double digits. Its women's business and North American division are projected to see low, double-digit annual compound growth rates in revenue through 2026.
Lululemon's chief financial officer, Meghan Frank, called the targets "bold but realistic."
The company cited recent initiatives including its first-ever footwear collection and a trade-in and resale program that it said should help to achieve these fresh financial targets.
Last month, McDonald told analysts during an earnings call that the initial response to the footwear launch had been "incredible." So far, Lululemon has only released a limited line of women's running shoes, with men's items set to drop next year.
Find the full financial press release from Lululemon here.
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