Lululemon plans to open 55 stores this year
- Lululemon Athletica’s total net revenue rose 18% to $2.2 billion, and comparable in-store sales increased 9% for the second quarter.
- Lululemon ended the second quarter with a total of 672 stores globally, and in both stores and digital channels, traffic increased over 20%.
- Between April and June, Lululemon saw positive year-over-year foot traffic growth – even as overall visits to sportswear and sporting goods retailers declined, Placer.ai reported.
For the second quarter, Lululemon Athletica’s total net revenue rose 18% to $2.2 billion, driven by broad-based strength across the business, according to Meghan Frank’s Lululemon’s chief financial officer, in the retailer's second quarter results conference call. Comparable sales increased 13% with a 9% increase in stores and a 17% increase in e-commerce in the second quarter. In its store channel, total sales increased 21% versus last year. For 2023, Lululemon expects net revenue to be in the range of $9.510 billion to $9.570 billion, representing growth of 17% to 18%.
Store count growth
Lululemon ended the second quarter with a total of 672 stores globally. Square footage increased 19% versus last year, driven by the addition of 72 net new Lululemon stores since second quarter of 2022. During the second quarter, the retailer opened 10 net new stores. In its digital channel, revenues totaled $894 million or 40% of total revenue.
“In both stores and digital channels, traffic increased over 20%,” Frank said. “This speaks to the strength of our omni-operating model as we engage with our guests in ways most convenient to them.”
In the third quarter, Lululemon expects to open 23 net new company-operated stores. Overall, the retailer plans to open approximately 55 net new company-operated stores and complete approximately 25 co-located remodels this year.
“This will contribute to overall square footage growth in the low teens,” Frank said. “Our new store openings in 2023 will include approximately 35 stores in our international markets with the majority of these planned for China.”
Lululemon currently operates 107 stores in China, and plans to open another 100 stores at the end of its five-year plan, whichit announced in 2019. The retailer reported performance was up 61% in greater China for the second quarter.
Store traffic up
While many expect Lululemon’s gains to slow down, the retailer has been a bit of anomaly, said Colin Shaughnessy, executive vice president of Unibail-Rodamco-Westfield, which operates 75 shopping centers in 12 countries including under the Westfield banner, in a September 6 Placer.ai webinar in regard to malls’ performance.
“There isn't anybody out there that's on the streak that they've been on,” Shaughnessy said. “They've been doing an amazing job and in just about every aspect of their business. Stores are getting bigger, but their sales keep growing at the same relative clip. We've seen lots of retailers over the past couple of decades grow their store size, then just to retract it because they realize they didn't need all that space. We've got Lululemon stores that just perform at huge, huge volumes.”
Between April and June, Lululemon saw positive year-over-year (YoY) foot traffic growth – even as overall visits to sportswear and sporting goods retailers declined, Placer.ai reported.
“It is mind-blowing to me how well Lululemon does, because it goes against so many of the expectations you have for a retailer that puts so many locations within a fairly tight proximity,” Ethan Chernofsky, Placer.ai’s senior vice president of marketing, said during a recent webinar. “And yet they do so well.”
In a recent blog, Placer.ai tracked YoY visits per Lululemon store have been consistently elevated in recent months with the company maintaining an upward trajectory – and the retailer’s recent emphasis on menswear is likely contributing to the steady growth. In the retailer’s five-year plan, Lululemon announced its “Power of Three” marketing strategy, which emphasizes menswear. Recent Placer.ai data suggests that marketing push is attracting more men to stores.
Between the second quarter of 2019 and the second quarter of 2023, the share of male visitors to top Lululemon locations nationwide grew significantly. For example, Lululemon in Manhasset, New York, saw the share of males in its trade area increase from 23.8% in the second quarter of 2019 to 42.5% in the second quarter of 2023. Similar patterns repeated in other locations, suggest that Lululemon’s increased focus on menswear is bringing a wider customer base into its stores, Placer.ai reported.