Lululemon continued to achieve nearly 30% growth in the second quarter.
On September 2, Lululemon (lulu. US), a high-end yoga clothing brand, released the second quarter results of fiscal year 2022. During the period, net revenue increased by 29% to USD 1.868 billion. Among them, the year-on-year growth rate of the North American market was 28%. Meanwhile, the growth rate of the international market was 35%. Net profit increased to US $290 million from US $208 million in the same period of the previous fiscal year.
Lululemon’s success in China makes who it is today
Lululemon’s good performance is inseparable from the purchasing power of Chinese consumers. In the second quarter of fiscal year 2022, Lululemon’s net revenue in the Chinese Mainland market increased by more than 30% year-on-year, with a three-year CAGR of nearly 70%.
In Little Red book, Lululemon has 330000 related notes. Many consumers are familiar with the model, function and fabric of this brand of yoga pants. And middle-class women have become the main force of buying this brand.
However, Lululemon is also controversial. On social platforms, many consumers conplain about the pilling problem of a certain series of sports. The price of this type of Yoga Pants ranges from 580 yuan to 850 yuan.
Lululemon will continue its success in China
Deep digital China believes that Lululemon has opened a high-end branch of luxury and fashion in the sports field. Because of its community culture and fashion attributes, its identity attributes are better and its tagging is stronger. Its user group is a group with high requirements for lifestyle and strong purchasing power. The willingness of such people to buy will be more stable.
However, the current situation of the Chinese market is still not enough for Lululemon, who is seeking sustained growth. According to AI media consulting, the market scale of China’s sports shoes and clothing will soar from 385.8 billion yuan in 2021 to 598.9 billion yuan in 2025. Lululemon has greater ambition in the Chinese Mainland market.
Time finance understands that the number of Lululemon stores in the second quarter increased from 579 at the beginning of the report to 600, with a net increase of 21 stores, of which Lululemon opened 8 new stores in China, which shows the importance of the Chinese market to it.
Future plan of opening new stores in China
By the end of fiscal year 2021, Lululemon had 71 stores in Mainland China. According to Lululemon’s latest plan, the number of stores in Mainland China will reach 220 by fiscal year 2026. At that time, China will become Lululemon’s second largest market except North America. Lululemon is beginning to enter the second and third tier cities in China in the first half of this year. Among them, there are Fuzhou, Haikou, Qingdao and Xi’an.
Deep digital China believes that the high-end consumption capacity of second tier and third tier cities has enough growth space. Honestly, the disposable proportion of clothing is actually higher than that of first tier cities. Lululemon is expanding the market in a targeted way. However, as a Canadian brand, Lululemon, like international brands such as Nike and Adidas, may face geopolitical uncertainty.
Deep Digital China will continue to report on how sports brands perform in the China market.