Lululemon (LULU) announces new 5-year targets at analyst day 2022

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A buyer seems to be at athletic apparel within a Lululemon retail outlet.

Xaume Olleros | Bloomberg | Getty Images

Lululemon aims to double its 2021 earnings in the next 5 several years, placing it on keep track of to hit $12.5 billion in profits by 2026, as the retailer rides a wave of Covid pandemic-fueled need for workout apparel.

Lululemon on Wednesday announced a handful of for a longer time-term growth targets, like for its men’s company, in advance of a scheduled analyst day occasion. It cited a few vital motorists of momentum in the coming years: item innovation, customer knowledge and industry enlargement.

The athletic attire retailer is aiming to double its men’s earnings, double its digital profits and quadruple worldwide profits, all in the future five a long time. Lululemon teased the official debut of a new membership providing in the coming months, as well as its foray into Spain and Italy by way of new brick-and-mortar outlets.

“We continue being early in our advancement journey,” mentioned Lululemon Main Executive Calvin McDonald, in a assertion. “I am psyched about having our development methods to the up coming amount.”

However, some investors may well have been hoping for even even bigger targets. Lululemon shares shut the day down almost 5%, at $385.40. The stock has fallen about 1.5% yr to date.

The retailer’s revenue grew more than 40% in 2021 from the prior year, totaling $6.25 billion, fueled by a sturdy direct-to-buyer organization and overseas momentum for its yoga pants, leggings and athletics bras. That’s when compared with earnings of $3.98 billion in 2019.

In April 2019, Lululemon experienced laid out a quantity of economical targets, which includes doubling its then-nascent men’s small business by 2023. It finished up achieving the men’s target two many years ahead of plan and also tripled digital income from 2018 to 2021.

Citing knowledge from The NPD Group, Lululemon explained it acquired a lot more current market share globally than any brand name in the grownup energetic attire industry from 2019 to 2021. Its rivals contain giants these kinds of as Nike, Adidas and Below Armour, as effectively as up-and-coming brand names like Vuori for adult males and Sweaty Betty for women.

A drive among the customers to gown easily whilst paying out extra time at dwelling has propelled several of these suppliers during the Covid pandemic.

The enterprise claimed Wednesday that it jobs earnings for each share progress to outpace revenue development in the up coming 5 decades. It expects to raise the square footage of its retailers on a yearly basis in the lower double digits. Its women’s business and North American division are projected to see low, double-digit yearly compound development rates in revenue by way of 2026.

Lululemon’s main monetary officer, Meghan Frank, named the targets “daring but sensible.”

The enterprise cited recent initiatives which includes its initial-ever footwear collection and a trade-in and resale method that it said really should assistance to accomplish these fresh economical targets.

Very last month, McDonald advised analysts throughout an earnings get in touch with that the preliminary reaction to the footwear launch had been “remarkable.” So considerably, Lululemon has only introduced a minimal line of women’s working footwear, with men’s merchandise established to fall upcoming yr.

Uncover the total fiscal press release from Lululemon below.

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