Lululemon Announces Plan To Double Revenue By 2026 To $12.5 Billion

Article From：SGB Media

 

 

Building on the momentum of the last three years and having successfully delivered its overall revenue and earnings goals early, Lululemon Athletica, Inc. announced a new Power of Three ×2 growth strategy that includes a goal to double its 2021 revenue of $6.25 billion to $12.5 billion by 2026.

 

Significant growth is expected across key pillars, including product innovation, customer experience and market expansion. The company’s Power of Three ×2 growth strategy includes a plan to double men’s and digital revenues and quadruple international revenues relative to 2021. The company’s women’s business, store channel and North American operations will continue to be important in its strategy, with women’s and North America each expected to generate low double-digit compound annual growth rates (CAGR) in revenue over the next five years, while stores are expected to grow in the mid-teens.

 

The update comes as Lululemon set a five-year growth plan in April 2019 and achieved much of it ahead of plan. Sales reached $6.25 billion in 2021, up from $3.98 billion in 2019.

 

The company provided its new growth targets ahead of Wednesday’s analyst day event.

 

“The success of our Power of Three formula in delivering on our 2023 growth strategy supports our goal to double the business over the next five years,” said Calvin McDonald, Chief Executive Officer. “We remain early in our growth journey, with our strong product engine, proven ability to create enduring guest relationships, and significant runway in core, existing, and new markets. Following our compelling track record of delivering against our goals, I am excited about taking our growth strategies to the next level to serve more and more guests around the world.”

 

Doubling Down On Core Success Drivers: Product Innovation, Customer Experience and Market Expansion to Achieve $12.5 Billion by 2026

According to the NPD Group, from 2019 to 2021, Lululemon gained more market share worldwide than any brand in the adult active apparel space. Having grown revenue from $3.3 billion in 2018 to $6.25 billion in 2021, the company said it would continue to focus on its three strategic pillars to fuel revenue growth over the next five years, which include:

 

Product Innovation: Having achieved its 2023 men’s growth target two years early, the company expects to double the size of its men’s revenue in 2021 by 2026, along with the expansion of its women’s and accessories businesses. The company will leverage Science of Feel, its lens for innovation, to innovate across categories, with runway within its core performance (Run, Train, Yoga, and On the Move) and in Play (Tennis, Golf and Hike) and new categories, including footwear.

Customer Experience: In addition to a tripling of its digital revenue between 2018 and 2021, the company will double its digital revenues by 2026. To accomplish this goal, Lululemon will continue to create to build stronger customer connections across physical and digital, cultivate its community and inspire through innovation. Last week, the company announced the expansion of Lululemon Like New, the brand’s first trade-in and resale program, available nationwide in the U.S. beginning April 22. Later this year, Lululemon will also launch a two-tiered membership program to build brand engagement and products.

Market Expansion: The company is on track to quadruple its international revenue relative to 2018 in 2022. Under its Power of Three ×2 growth strategy, Lululemon expects to quadruple its international revenues relative to 2021 by 2026 as it expands worldwide. The company also plans to open its first stores in Spain and Italy.

People and Planet: Lululemon added its Impact Agenda priorities, including supporting its employees and creating a healthier planet, to its Power of Three growth model.

Financial Plan: Lululemon’s strategic growth plan is underpinned by the strength of its financial position. In addition to doubling men’s and digital and quadrupling international revenues, other key financial goals include:

Total net revenue CAGR of 15 percent between 2021 and 2026;

Modest operating expansion annually;

EPS growth to outpace revenue growth; and

Annual square footage growth in the low double-digits.

“We are setting bold but realistic 2026 targets from a position of financial strength while delivering on our 2023 goals with significant growth across our core business,” said Meghan Frank, chief financial officer. “We have a long runway ahead and are well-positioned to build on our strong momentum and deliver sustainable long-term value creation for all our stakeholders.”