Lululemon’s sales are soaring.
For fiscal 2015, total comparable sales (including direct to consumer sales) skyrocketed an impressive 10%. For the fourth quarter alone, total comparable sales increased by 11%. Net revenue surpassed $2 billion for the year.
One huge factor in Lululemon’s exponential growth is its ever-expanding men’s business.
Though some might say that Lululemon is known for its brightly hued, feminine leggings, make no mistake: men are loving Lululemon. In fact, the company said on a recent earnings call that for the past ten quarters, its men’s sales have increased 20% on average each quarter.
This is hugely important, as one of Lululemon’s rising competitors, Under Armour, announced plans to expand its women’s line. CEO Kevin Plank said he wanted to make Under Armour’s women’s division “at least as large if not larger than our men’s business.” If Under Armour’s women’s sector did, in fact, increase to the size of its men’s sector, it would completely usurp Lululemon. (In January, consulting firm Conlumino estimated that Under Armour’s business approximately splits at about $1.14 billion for women, and $2.69 billion for men.)
Lululemon’s business is smaller, but for fiscal 2014, Conlumino estimated that the split was $1.72 billion for women and $0.33 billion for men.
Lululemon said it planned for its men’s sector to reach $1 billion in revenue by 2020.
If Lululemon is zeroing in on its men’s sector, it could potentially help the brand in its fight to remain the premiere consumer athleisure brand — even though Under Armour’s men’s sector would still be much larger.
The company has faced criticism for its limited appeal — that its target audience is stereotypically a wealthy woman. This makes sense, given how the bulk of Lululemon’s sales are for women. (Though the company’s true target customers are Ocean and Duke, two well-off singles in their early-to-mid thirties.)
“Looking ahead, we believe that the Lululemon brand remains strong, especially among its target market. However, while loyalty is relatively solid among its core constituency it also needs to look outside of this group if it is to drive growth. One area of opportunity is the push into more embryonic areas like men’s and teens’,” Neil Saunders, CEO of consulting firm Conlumino, wrote in a note to clients.
But the company appears to be addressing that flaw.
“We’re only getting started in the men’s category,” CEO Laurent Potdevin said on a recent earnings call. The company pointed to how expanding the men’s sector is one of the core tenets of growth for the brand.
Lululemon’s efforts to appeal to men in the past have been mixed; though men have loved the company’s ABC (“Anti ball-crushing”) pants, they have expressed that they don’t like when Lululemon’s logo is featured prominently on its apparel.
Additionally, Lululemon has been expanding Ivivva, its off-shoot for young girls.
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