lululemon's (LULU) Strategies Position It for Sustained Growth (2024)

LULU is poised to benefit from increased store traffic as consumers return to stores for shopping. At the store level, comparable store sales increased 13% year over year and 16% on a constant-dollar basis in the fiscal first quarter. The company witnessed more than 30% traffic growth at stores.

lululemon continues to be focused on investments to enhance the in-store experience. It is leveraging its stores to facilitate omni-channel capabilities, including buy online pickup in store and ship from store.

The company has implemented several strategies to improve the guest experience and reduce wait time. These include virtual waitlist, mobile POS and appointment shopping. These functionalities enable reducing the wait time to enter the store and allow customers to complete some transactions like returns, exchanges and purchase of gift cards without entering the store. lululemon continues expanding its store base.

lululemon’s intent of capturing the growing online demand and ensuring a robust shopping experience through its accelerated e-commerce investments keeps it on track for growth. It has been investing in developing sites, building transactional omni functionality and increasing fulfillment capabilities.

The company has been strengthening omni-channel capabilities, such as curbside pickups, same-day deliveries and buy online pick up in store. It is enhancing its mobile app in a bid to offer the curbside pickup service and train its store associates to help customers speed up transactions. Free online digital educator service for people who cannot access its stores bodes well.

lululemon’s Power of Three ×2 growth strategy positions it for robust growth in the long term. The company’s progress on this strategy, focused on doubling its revenues from $6.25 billion in 2021 to $12.5 billion by 2026, has been a key driver for the company. The strategy revolves around three key growth drivers, including product innovation, guest experience and market expansion.

The five-year plan is likely to quadruple international sales, along with doubling digital and menswear sales. Also, the women’s business and North America operations are each anticipated to witness a low-double-digit compounded annual growth rate (CAGR) in revenues, with store channel growth in the mid-teens in the next five years. As part of its strategy, the company intends to expand in China and Europe markets, with plans to open stores in Spain and Italy.

For 2021-2026, total net revenues, on a five-year CAGR basis, are expected to be up 15%, with a slight expansion in the operating margin on an annual basis. lululemon anticipates bottom-line growth to outpace revenue growth. Although the 2026 targets seem too bold, the company believes that these are achievable due to its strong financial position.

G-III Apparel, Ltd. GIII, a manufacturer, designer and distributor of apparel and accessories under licensed, owned and private label brands, has been accelerating its digital growth and strives to become the best omnichannel organization. It has undertaken several strategies, including acquisitions and licensing of well-known brands, to expand its product portfolio and make itself a diversified apparel and accessories company.

G-III Apparel is optimistic about its global power brands, such as DKNY, Donna Karan, Calvin Klein, Tommy Hilfiger and Karl Lagerfeld. These position the company for long-term growth.

Crocs Inc. CROX is one of the leading footwear brands with a focus on comfort and style. CROX is a key beneficiary of the solid consumer demand for new clogs and sandals, as well as continued momentum in Crocs and HEYDUDE brands, and robust DTC growth.

CROX is on track with its long-term strategy and key initiatives to deliver sustainable growth. It expects to generate revenues of more than $5 billion by 2026, representing a CAGR of more than 17% in the next five years.

NIKE, Inc. NKE is the global leader in athletic footwear, apparel, equipment and sports-related accessories. The company’s business strategy, compelling product innovation and digital leadership have been aiding its performance. NKE’s Consumer Direct Acceleration strategy, along with robust performance in its digital and DTC businesses, bodes well for long-term growth.

NIKE has been benefiting from its efficient digital ecosystem, which comprises its online site, as well as commercial and activity apps. The company is on track to deliver on its fiscal 2025 outlook. For fiscal 2025, NKE expects revenue growth to be led by NIKE Direct, which is anticipated to represent 60% of revenues on strong digital growth.