Lululemon is making plans to expand its men’s business, including the addition of footwear, as part of a larger five-year growth strategy to double revenue to $12.5 billion by 2026.
The announcement was made at the athletic company’s analyst day on Wednesday, just weeks after the company reported it reached $6 billion in revenue in 2021. At the event, Lululemon declared it was on track to “successfully achieve 2023 revenue and earnings growth targets ahead of schedule.”
Called the “Power of Three ×2 growth strategy,” Lululemon’s new path to $12.5 billion includes a plan to double men’s and digital revenues, and to quadruple international revenues relative to 2021. It also expects significant growth across key pillars including product innovation, guest experience and market expansion.
The company also said that its women’s business, store channel and North American operations will continue to play an important role in the strategy, with women’s and North America each expected to generate low double-digit compound annual growth rates in revenue over the next five years, while stores are expected to grow in the mid-teens.
“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,” said Lululemon CEO Calvin McDonald in a statement. “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.”
Diving deeper into the company’s plans, Lululemon said that since it has grown its 2023 men’s growth target two years early, it now expects to double the size of its men’s revenues in 2021 by 2025. It will do this by “innovating” across product categories in its core performance division (run, train, yoga and “on the move”) as well as its “play” division (tennis, golf and hike). New categories such as footwear, which was recently launched for women early this year, will also be added.
Additionally, after tripling its digital revenue between 2018 and 2021, the company is projecting to double its digital revenues by 2026. To accomplish this goal, Lululemon will continue its guest experience initiatives like the recently launched trade-in and resale program Lululemon Like New.
Lululemon also said it would launch a new two-tiered membership program later this year to “create a new path for connected fitness.” The company said the intent of the program is to build stronger engagement with its brand, community and products, and to “create the most immersive fitness marketplace in the industry.”
Looking globally, the company is on track to quadruple its international revenue relative to 2018 in 2022 — and predicted it would quadruple it again by 2026, relative to 2021 numbers. “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,” the company said in a statement. “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, with plans to open its first stores in Spain and Italy,” the company added.
Ultimately, though, Lululemon said all of this strategic growth plan is underpinned by its strong financial position. Other key financial goals include modest operating expansion annually 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, CFO at Lululemon. “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.”