Lululemon Athletica Inc. (NASDAQ: LULU), a sportswear company, published a five-year strategy last week. The company will concentrate its efforts on three primary areas of operation, each of which should contribute significantly to revenue and profit growth.
The new goal for Lululemon Athletica aims to quadruple sales across three business divisions. A sector of items for males is the initial direction. LULU has been identified with women’s apparel for a long time, but the company’s first moves into the men’s clothing market demonstrated that this route has a lot of promise.
The management hopes to treble income from selling men’s items by 2026. As a reminder, the corporation exceeded its original target of tripling men’s apparel sales by 2023 by two years.
E-commerce is the second area where growth is expected to double. Lululemon Athletica Inc. (LULU) now has 574 retail locations in 17 countries, but online sales remain the primary source of brand recognition and new client acquisition. In the fourth quarter of 2021, online sales revenue amounted to more than 49% of overall revenue, and this %age is expected to rise.
Lululemon Athletica’s third area of expansion is foreign business. Only 15% of the company’s total revenue comes from outside North America in the most recent fiscal year (ending January 30). LULU now accounts for under 3% of the global sportswear market, indicating significant room for expansion globally.
Lululemon Athletica Inc. (LULU) anticipates margins to increase as sales increase. Through innovation and cost efficiency, management anticipates EPS growth to outperform sales growth through 2026.
Significantly, the Lululemon Athletica Inc. (LULU) brand is growing in popularity, and Lululemon is now the third most popular apparel brand among teens and young adults, according to the current Piper Sandler poll.
The stock of Lululemon Athletica Inc. (NASDAQ: LULU) has dropped -2.45% in the last week but has been down -2.35% in the previous quarter. In the past six months, the stock has dropped -31.72% but is down -20.99% year-to-date.