LULULEMON ANNOUNCES FIVE YEAR GROWTH PLAN TO DOUBLE REVENUE BY 2026 TO $12.5 BILLION

by MR Magazine Staff Apr 20, 2022

Building upon the momentum of the last three years and having successfully delivered its overall revenue and earnings goals early, Lululemon Athletica, Inc., today announced a new growth strategy, planning to double its 2021 revenue of $6.25 billion to $12.5 billion by 2026. The company expects significant growth across key pillars including product innovation, guest experience, and market expansion. The strategy includes a plan to double men’s and digital revenues, and quadruple international revenues relative to 2021. 

“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.”

From 2019 to 2021, in the adult active apparel industry, Lululemon gained more market share globally than any brand in this industry, according to The NPD Group. Having grown revenue from $3.3 billion in 2018 to $6.25 billion in 2021, the company will continue to focus on its three strategic pillars to fuel revenue growth over the next five years:

Product Innovation: Having achieved its 2023 men’s growth target two years early, the company expects to double the size of its men’s revenues in 2021 by 2026, along with ongoing expansion in its women’s and accessories businesses. The company will leverage Science of Feel, its distinctive lens for innovation, to innovate across categories, with significant runway within Core performance (Run, Train, Yoga, and On the Move) as well as exciting opportunities in Play (Tennis, Golf and Hike) and new categories such as footwear, which was recently launched.

Guest Experience: On top of a tripling of its digital revenue between 2018 and 2021, the Company projects to double its digital revenues by 2026. To accomplish this goal, lululemon will continue to create world-class experiences by harnessing the power of its guest relationships to build stronger connections across both 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 United States beginning April 22.

Building on strong guest interest in, and the learnings from its pilot membership program, as well as the Company’s vision to create a new path for connected fitness, lululemon will launch a new, two-tiered membership program later this year. The intent of the program is to build stronger engagement with its brand, community, and products, to create the most immersive fitness marketplace in the industry.

Market Expansion: The Company is on track to quadruple its international revenue relative to 2018 in 2022. Under its new Power of Three ×2 growth strategy, lululemon expects to again quadruple its international revenues relative to 2021 by 2026. With significant runway in both new and core markets, lululemon is focused on ensuring local relevance and deepening connection as it continues to introduce the brand to more communities around the world. Engaging guests in China Mainland, growing its core markets, and scaling and entering new countries across APAC and Europe will be key to delivering on its new goal. The Company also plans to open its first stores in Spain and Italy.

Impact: People and Planet

lululemon added its Impact Agenda priorities, including supporting its people and creating a healthier planet, to its successful Power of Three growth model. The new plan includes focusing on building an environment that is equitable and inclusive, advancing equity in wellbeing across its communities, and working to prevent environmental harm and helping to restore the planet. The Company remains committed to investing in its people and continues to expand its employee benefits, recently raising minimum base pay in North America and introducing more mental health, mentorship, and leadership programs for personal and career development.

Financial Plan

lululemon’s strategic growth plan is underpinned by the Company’s strong financial position. In addition to doubling men’s and digital, and quadrupling international revenues, other key financial goals of the Company’s Power of Three ×2 growth strategy include:

  • Total net revenue CAGR of 15% between 2021 and 2026
  • Modest operating expansion annually
  • EPS growth to outpace revenue growth
  • 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.”