Footwear and a pair of apparel launches could be key to Lululemon’s strategy to take its business to the next level after the company reached over $6 billion in total revenue in 2021.
In a conference call with investors on Tuesday, CEO Calvin McDonald said he was upbeat about the reaction to the brand’s footwear launch this month.
“We have received a very broad-based positive reaction to our unique women’s first positioning, McDonald said. “The first of our four styles, Blissfeel, began selling on March 22 in North America, and Mainland China and the U.K. will launch shortly. The initial guest response to Blissfeel has dramatically exceeded our expectations, not to mention incredible reviews from a number of publications and guests.”
McDonald also teased two other launches as it aims to focus on different sport apparel. “I’m very excited that we are advancing our play strategy as well with the launch of our first-ever design for tennis collection available in stores and online beginning this week and our first-ever design for golf collection, which will roll out next week,” McDonald said. “As you can see, we have ample opportunity to bring new technical solutions to our guests, and I’m pleased with how our product pipeline looks going forward.”
The CEO also announced plans to take strategic and modest price hikes on some of its products to offset inflation and supply chain costs. “We plan to take some selective price increases over the course of the year on a small portion of our styles,” McDonald said on the call. “Our pricing also factors in the value of our innovation, and we will continue to monitor the competitive environment to ensure we maintain our price position relative to our key peers.”
Pressed further on pricing by analysts on the call, McDonald added: “Some [increases] will go in place in Q2. And as we look forward, into additional quarters. As I mentioned, it’s a very small portion of our styles that are impacted, about 10%.”
The CEO, who hinted of more footwear plans to be revealed during Lululemon’s analyst day, said the pricing for the collection, which starts at $58 for slides and goes up to $148 for sneakers, is on target. “We’ll manage the category, as we look forward, with additional innovation as well as evolution…,” he added.
Looking ahead for the first quarter of fiscal 2022, the company expects net revenue to be in the range of $1.525 billion to $1.550 billion, representing growth of 24% to 26%. For fiscal 2022, Lululemon expects net revenue to be in the range of $7.490 billion to $7.615 billion, representing growth of 20% to 22%.
On the company’s fourth quarter and fiscal year 2021 earnings call on Tuesday, McDonald celebrated Lululemon’s milestone of generating total revenue of $6.26 billion, delivering adjusted earnings per share of $7.79. “We achieved our Power of Three targets early including exceeding our total revenue target, doubling our e-commerce business, doubling our men’s business, and we are on track to quadruple our international business by the end of 2022,” McDonald said on the call.