Lululemon sees revenue bounce as it sets sights on five-year growth plan

Athletic-wear company Lululemon reported a 32-per-cent rise in first-quarter revenue on Thursday, beating expectations and putting it well on its way to meeting a five-year plan to double sales by 2026.

The growth came as the Vancouver-based company launched footwear, golf and tennis products during the quarter, which CEO Calvin Mcdonald said have all performed well and continue to drive demand.

Net revenue increased to $1.6 billion as opposed to the $1.53 billion expected by analysts, with North American operations growing by 32 per cent and international by 29 per cent.

Diluted earnings per share were $1.48, up from $1.11 in the same period last year.

Lululemon previously announced that it plans to double its men's and digital revenues while quadrupling international sales from 2021 levels as part of its growth plan.

“These results provide a solid foundation as we begin our next five-year journey,” CEO Calvin Mcdonald said during Thursday's earnings call.

Mcdonald said while the company is in a better inventory position as compared to last year, the recent Covid-related lockdowns in China have had a modest impact.

He said, however, that stores are reopening in Beijing this year so they “remain excited in our business in China.”

Global supply chain issues also remain challenging for the retailer, said Mcdonald, adding that inflation has increased input costs in resources, labour and air freight.

The company said that selective price hikes it is implementing are not affecting its momentum.

In 2020, Lululemon acquired interactive exercise screens maker Mirror in a move towards in-home fitness as demand surged during COVID-19 lockdowns.

The company said the adjusted financial measures in its earnings excluded costs and taxes related to the acquisition.