On March 21, the Vancouver-based Canadian athletic and yoga wear supplier Lululemon Athletica Inc. (hereinafter referred to as “lululemon”) (NASDAQ: LULU) announced its fourth quarter and annual performance for the fiscal year ending January 28, 2023: Net revenue for the fiscal year 2023 increased by 19% year-over-year to $9.6 billion, and operating profit increased by 61% year-over-year to $2.133 billion; of which, net revenue for the fourth quarter increased by 16% year-over-year to $3.2 billion, and operating profit surged by 191% year-over-year to $913.9 million.
In particular, net revenue in the Chinese Mainland market grew by 56% year-over-year (60% growth at constant exchange rates), with comparable sales increasing by 39% year-over-year (46% growth at constant exchange rates). By the end of the fiscal year 2023, lululemon had 127 stores in the Chinese Mainland. Lululemon expressed excitement about the growth potential in the Chinese Mainland market, attributing this strong performance to localized branding strategies, including deep connections established with ambassadors and community partners, engaging and widely acclaimed brand events, and a steady pace of store expansions. “Our team will continue to maintain this momentum. We are very optimistic about the future opportunities and look forward to them with great anticipation.”
Regarding the performance achieved, lululemon’s CEO Calvin McDonald stated, “We are pleased with the strong finish to our 2023 fiscal year and continue to be ahead of our Power of Three ×2 strategy. During the fourth quarter, we saw continued momentum across our channels, geographies, and merchandise categories, driven by our teams around the world. As we step into 2024, we are focused on the significant opportunities ahead for lululemon as we navigate the dynamic retail environment and deliver for guests through innovative new products and brand activations.”
*Note: The Power of Three ×2 plan was announced in April 2022. According to this five-year growth plan, lululemon aims to double its business net revenue from $6.25 billion in the fiscal year 2021 to $12.5 billion by 2026. The key pillars of this plan include product innovation, guest experience, and market expansion, which include doubling the revenue from menswear and direct-to-consumer channels based on the fiscal year 2021, and quadrupling international net revenue. Previously, lululemon stated that by then, China will become lululemon’s second largest global market.
Lululemon’s Chief Financial Officer Meghan Frank commented, “Our solid fourth quarter and full year 2023 results demonstrate the strength and resilience of our omni operating model and our differentiated position in the marketplace. Looking ahead, we will stay focused on driving the business forward for the near-and long-term, while operating with agility and discipline. We are still early in our growth journey, and excited for what the future holds.”
Calvin McDonald also mentioned in the conference call that product innovation will be one of lululemon’s focus areas in 2024. In February, lululemon officially launched its first men’s footwear line, including the Cityverse casual sports shoe and the Beyondfeel running shoe; on the eve of International Women’s Day, lululemon hosted its first women’s ultra-marathon event FURTHER, unveiling a series of innovative gear specially designed for the participating athletes.
In addition, the brand will continue fabric innovations in yoga and training series, enrich the classic Align™ product line and the popular License to Train series; for male customers, lululemon will launch innovative golf products, continue to build classic series such as Pace Breaker, providing customers with a richer selection of products for various sports scenarios.
Furthermore, during the fiscal year, lululemon opened 56 new company-operated stores, bringing the total number of company-operated stores to 711.
| Source: Lululemon official website and official financial report
| Image Credit: Lululemon official website
| Editor: Wang Jiaqi
