Lululemon Athletica Earnings: What to Expect from the Retail Company in Q1?

5 Reasons To Buy Lululemon Stock Today

Popular activewear brand Lululemon, which experienced huge success during the COVID-19 pandemic, has disclosed its financial results for Q2.

Lululemon (NASDAQ: LULU) is a prominent brand in athletic apparel, which, throughout the pandemic, has grown healthily, thanks to various new initiatives, tie-ups with companies, and focus on climate change. Here are five reasons why you should flaunt this brand with confidence.

1. All ‘Bout the Money

The business issued a statement on September 8 announcing the release of its Q2 financial reports, in which it showed that revenue grew by 61% to $1.5 billion. Store revenue in the U.S. grew by 142% to $695.1 million. The firm has improved its financial gain by 63% in North America and by 49% globally. The group’s gross profit increased by 72% to $842.7 million. In addition, the company opened 11 new locations, bringing the total to 534 at the end of Q2.

Lululemon has approximately $1 billion cash in hand, which could be useful should retail stores experience another pandemic-driven downturn.

2. Dynamic Leadership

At the beginning of the pandemic, the firm announced certain changes in its leadership positions, focusing on expansion, innovation, diversity, and integration. In Q3 of 2020, Lululemon began to take action on these initiatives accordingly. 

The first female ​ Chief Financial Officer (CFO) in Lululemon, Meghan Frank brings extensive experience in finance and business planning.

At the same time, Kourtney Gibson joined as a Board of Directors. Gibson’s portfolio is diverse, and she currently serves on the boards of directors of a number of financial, technology, and non-profit organizations.

In addition, the company hired Celeste Burgoyne, the seasoned executive,  as the business’s first executive to serve as President.  André Maestrini, a long-time Adidas executive, was appointed EVP, International, and Stacia Jones was designated VP, Global Head of IDEA.

3. Sustainability Saga

Lululemon published its first-ever Sustainability Vision in October 2020, detailing ambitious, environmental, and pluriannual plans for a better, sustainable, and happier future. They launched two new initiatives Like New and Earth Dye.

Like New was a limited edition brand that invested its profits directly towards environmental initiatives, production planning, and eco-friendly initiatives. The Earth Dye project specialized with low-impact hues made from agricultural and herbal products where they consumed less water, carbon, and artificial ingredients, coinciding with the brand’s goal of decreasing its environmental impact.

In mid-August, Lululemon partnered with Genomatica to produce plant-based nylon to build its innovative clothing. This was the first-ever big investment by Lululemon into an environmentally friendly and sustainable company.

Other such partnering includes Mylo, which uses mycelium-based leather, and LanzaTech, which uses repurposed carbon emissions to make polyester.

Calvin McDonald, CEO of Lululemon mentioned that: 

“We are focused on meeting the goals detailed in our Impact Agenda, including making 100 percent of our products with sustainable materials and end-of-use solutions by 2030.”

4. Happy employees lead to high profits

Around the holiday season, Lululemon proudly announced the hiring of 8,000 new employees in key roles in stores and as educators in their Guest Education Centre (GEC).

The organization also mentioned raising the minimum wage base from $15 to $17 per hour, depending on the employee’s role and store area. Workers will still be able to earn an extra $3 to $6 per hour for meeting store-based targets. This will take effect on September 27th.

Celeste Burgoyne, President of the Americas & Global Guest Innovation mentioned that:

“At Lululemon, continuing to support and invest in our people is our top priority”

The firm is also committed to providing perks such as mental health awareness, the parenthood program, and mentorship support groups. However,  its primary focus is on the IDEA internship, aimed at staff who have 12 weeks of skill and development experience in various areas of Lululemon’s operation.

5. Vision, passion, and innovation

The pandemic worked in Lululemon’s favor as people spent more money on activewear as they were forced to exercise and work from home.

Over the course of 2020 and into 2021, the company reported positive results in terms of sales and financial growth. Its vision of making clothes from sustainable products, passion for retaining and having loyal customers, and its innovation in terms of various benefits for staff and customers have all created a positive buzz for the stock.

Simultaneously, the pandemic has given rise to a slew of local brands that are more affordable and comfortable. With the entire world chanting mantras about supporting local businesses, many of which are already selling sustainable clothing, it will be very interesting to see how Lululemon will fare against this local competition. 

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