Vancouver-based leisurewear giant Lululemon Athletica Inc. (Nasdaq:LULU) today upped growth projections, and said it plans to double annual revenue to US$12.5 billion by 2026.
The company hosted analysts at a New York event, where executives discussed new growth targets, and operational changes.
Lululemon aims to double its 2021 menswear revenue by 2026, while increasing sales for women's products by a low double-digit compounded rate within that time frame. New revenue sources would help the company reach its goal to double overall revenue by 2026.
One new initiative that Lululemon is introducing is to have two tiers of monthly memberships – one free and one that costs US$39 each month. Members would get exclusive access to product launches, events and fitness classes. Paid members would get access to fitness activities using the home fitness device known as Mirror.
Lululemon plans to accelerate international expansion, and quadruple revenue that comes from outside Canada and the U.S. by 2026.
“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," CEO Calvin McDonald said in a statement.
He identified three pillars of growth. In addition to providing innovative new products, and expanding internationally, McDonald mentioned the guest experience as the third pillar. That includes a new trade-in and resale program that is set to be available across the U.S. starting April 22.
When the company released its fourth-quarter earnings on March 30, it announced plans to expand into new product niches, such as tennis clothes and golfwear. It recently started selling shoes, and executives have talked about expanding into selling products to hikers.
Lululemon said in March that it had opened a net total of 22 new stores in the three months that ended on January 30. That brought its global total to 574 stores. It said it planned to open 70 new stores in the current fiscal year, including 40 outside North America.
Today, the company said annual store square footage will grow by a low double-digit percentage in the coming years.
Investors did not seem impressed with the company's future projections, as Lululemon's share price closed down more than four per cent, at US$385.40.