lululemon Unveils “Power of Three” Strategic Plan to Accelerate Growth
Five-year growth plan aims to “double men’s, double digital, and quadruple international” revenues
The growth strategy includes a plan to double men’s and digital
revenues, and to quadruple international revenues. The Company’s core
women’s business and its agile store formats in
“We’re ready to build upon our success and embark on the next phase of
growth at lululemon to realize the full potential of our brand,” said
The Power of Three strategic plan also includes contributions from new product categories and offerings, such as its membership program which is currently in pilot, as the Company further leverages its position as an experiential brand for guests across channels.
Power of Three Growth Strategy
The Company’s three priorities to drive revenue growth over the next five years are:
- Product innovation– The Company expects to more than double the size of its men’s revenues by 2023. In addition, its plans call for continued expansion in the women’s and accessories businesses. Both existing and new product categories are planned to grow, with lines supporting yoga, running and training. The Company also plans to continue its product collaborations, expand its popular Office/Travel/Commute category, and pursue new opportunities, such as selfcare.
Omniguest experiences – The Company expects to more than double its digital revenues by 2023. The Company will focus on offering an integrated guest experience across channels which are intended to inspire, provoke and celebrate guests who live a healthy and mindful lifestyle across multiple experiences – such as events, dynamic new store formats, and its innovative membership program that fosters connections among guests.
- Market expansion– The Company plans to quadruple its
international revenues by 2023. The Company’s recent success in its
international markets demonstrates that the sweatlife translates
across cultures and geographies and presents considerable growth
potential for the brand. Expanding across
China, as well as the APAC and EMEA regions, will be continued areas of focus for the Company. The Company also believes that considerable growth potential remains in both the U.S. and Canadaand it plans to leverage its agile store formats, digital experience, and community connection.
A Truly Experiential Brand
The Company also is sharing its vision -- to be the experiential brand that ignites a community of people living the sweatlife through sweat, grow and connect -- which it believes speaks to guests who want flexibility and choice as they lead a healthy, mindful lifestyle.
“lululemon is purpose-driven and is positioned well to continue to inspire guests living the sweatlife across multiple experiences,” McDonald added. “We believe we are operating from a position of strength as we invest in creating dynamic experiential moments for our communities to connect and come together.”
The Company created and hosted more than 4,000 local events last year
and demonstrated success with larger-scale experiences such as the
SeaWheeze half-marathon in
To embody its experiential brand ambitions, the Company announced it
will open a 25,000 square-foot experiential store in
In addition to more than doubling men’s and digital, and quadrupling international revenues, other key financial drivers of the Company’s Power of Three strategic plan include the following:
- Total annual revenue growth in the low teens for the next five years;
- Modest gross margin expansion annually;
- Modest SG&A leverage annually;
- Operating income growth to exceed revenue growth annually;
- EPS growth to equal or exceed operating income growth annually;
- Annual capital expenditures of 6-8% of revenues; and
- Annual square footage growth in the low double-digits.
“Our new five-year strategic plan reflects the potential we see across several areas of our business. The three main growth pillars are consistent with our prior plan, and we will continue to grow our core business while expanding into new categories to drive earnings growth and shareholder return.” said PJ Guido, the Company’s Chief Financial Officer.
Speaking to investors today at the Company’s first analyst day in five
Conference Call Information
The presentations will be broadcast live over the internet beginning
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Actual results and the timing of events could differ materially from
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and uncertainties, which include, without limitation: our ability to
maintain the value and reputation of our brand; the acceptability of our
products to our guests; our highly competitive market and increasing
competition; our reliance on and limited control over third-party
suppliers to provide fabrics for and to produce our products; an
economic downturn or economic uncertainty in our key markets; increasing
product costs and decreasing selling prices; our ability to anticipate
consumer preferences and successfully develop and introduce new,
innovative and updated products; our ability to accurately forecast
guest demand for our products; our ability to safeguard against security
breaches with respect to our information technology systems; any
material disruption of our information systems; our ability to have
technology-based systems function effectively and grow our e-commerce
business globally; changes in consumer shopping preferences and shifts
in distribution channels; the fluctuating costs of raw materials; our
ability to expand internationally in light of our limited operating
experience and limited brand recognition in new international markets;
our ability to deliver our products to the market and to meet guest
expectations if we have problems with our distribution system; imitation
by our competitors; our ability to protect our intellectual property
rights; changes in tax laws or unanticipated tax liabilities; our
ability to source our merchandise profitably or at all if new trade
restrictions are imposed or existing trade restrictions become more
burdensome; our ability to manage our growth and the increased
complexity of our business effectively; our ability to cancel store
leases if an existing or new store is not profitable; increasing labor
costs and other factors associated with the production of our products
in South and
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