The company’s stock hit an all-time high…
Lululemon’s stock jumped more than 5% after a positive quarterly earnings report. The price target is now $191.71, which is up from $186.39 in May. The company’s net income increased to $96.6 million, which is up from $75.2 million a year earlier.
Adjusted earnings came to 74 cents per share, beating investor expectations of 70 cents per share. Revenue and same-store sales are also up, and the company increased its full-year guidance.
What’s ahead for Lululemon? This company has big plans…
Lululemon and the Three Growth Pillars
The retail sector as a whole has experienced slow growth in 2019 but there’s a lot to be excited about when it comes to Lululemon. For one thing, the company has seen success across many different channels.
Lululemon’s men’s business grew by 26% and its online sales increased by 35%. Most notably, the company expanded its market in China by 70%. This is largely thanks to the company’s Three Growth Pillars, as outlined below.
Product innovation
Lululemon wants to double the revenue from its men’s line by 2023 and continue to expand its women’s and accessories business. And it’s doing this largely through product innovation that focuses on touch, temperature, and movement.
And beginning next week, the company also plans to test out new self-care offerings online and in certain stores.
Omni-guest experience
Lululemon’s in-store sales grew by 8% and its digital sales rose 35%, thanks to an integrated guest experience across all of its online channels. The company hopes to more than double its digital revenue by 2023.
Market expansion
And finally, Lululemon has its sights set on quadrupling its international revenue by 2023. Obviously, the company has seen tremendous growth in China but it has also seen momentum in Japan and across Europe.
The company plans to open 15 to 20 domestic locations this year and 10 to 15 new stores in China this year.
Final Thoughts
There’s a lot to like about Lululemon right now. Its shares are up nearly 50% this year and it continues to experience strong momentum in its sales growth. And the company has proven it has a clear, long term vision to sustain this momentum.
And most analysts seem to feel the same way. Out of the 34 analysts surveyed, 21 raised their price targets for the company.
