As several COVID-10-related factors created both opportunities and pitfalls for Lululemon, the company is coming out of the pandemic reporting record growth.
In a sign of its staying power beyond several COVID-19 era-created trends in fitness and fashion, Lululemon showed impressive revenue growth, particularly in brick-and-mortar retail, in its investor report for the first quarter of 2021.
Lululemon’s net revenue increased by 88 percent, when compared to the first quarter of 2020, growing to $1.2 billion.
From its 523 stores, Lululemon increased revenue even more in the same year-long span, by 106 percent to $536.6 million. Some analysists are interpreting this as a sign that the pandemic’s effect on retail foot traffic is lessening as transmission rates plummet and restrictions on public places are lifted.
Direct-to-consumer revenue, from sources like the chic yoga wear brand’s website, was also up by 55 percent to $545.1 million. These sales did represent account for less of Lululemon’s revenue, as a percentage, than they did at the start of the COVID-19 lockdown. In the first quarter of 2021, direct-to-consumer net revenue were 44.4 percent of total net revenue, down from 54 percent in the first quarter of 2020.
“Our first quarter results reflected strength across all drivers of growth, fueled by the continued expansion in our e-commerce business and a rebound in brick and mortar stores,” said CEO Calvin McDonald in a statement. “Our strong performance across categories, channels and geographies demonstrates the momentum and strength of lululemon as we shift into the new normal.”
This allowed the company to make a prediction for total revenue in 2021 of $5.8 billion to $5.9 billion. Lululemon’s total revenue for 2020 was $4.4 billion and it has been solidly increasing since 2008.
Lululemon has been a tricky bellwether for what will and won’t succeed as COVID-19 changed the entire outlook for the economy, particularly for clothing and fitness. On one hand, people were spending more time in casual, stretchy athleisure wear as working from home (and doing everything else from home) became normative.
Alternatively, its retail stores were closed, which likely caused a 17-percent drop in sales in the first quarter of 2020, hurting Lululemon’s revenue. Also, yoga classes were closed and at-home connected fitness devices were taking up a larger share of fitness dollars, threatening the entire culture on which Lululemon thrives. The company responded by rushing to buy the digital fitness platform Mirror for $500 million.
Perhaps resultantly of all these competing factors, the company’s stock has peaked and sloped through the last year, reaching a high of $398.29 in early September and faltering recently to around $315 a share in the last few weeks.
Nick Keppler is a freelance journalist, writer and editor. He enjoys writing the difficult stories, the ones that make him pore over studies, talk about subjects that make people uncomfortable, and explain concepts that have taken years to develop. Nick has written extensively about psychology, healthcare, and public policy for national publications and for those locally- based in Pittsburgh. In addition to Athletech News, Nick has written for The Washington Post, The Daily Beast, Vice, Slate, Reuters, CityLab, Men’s Health, The Gizmodo Media Group, The Financial Times, Mental Floss, The Village Voice and AlterNet. His journalistic heroes include Jon Ronson, Jon Krakauer and Norah Vincent.