How Are Lululemon’s Revenues Expected To Grow In The Next 2 Years?

At the moment, it seems like there’s no stopping Lululemon Athletica (NASDAQ:LULU), and this is abundantly evident in the results in the year thus far. The company managed to post significant improvements in both top and bottom lines in both quarters, beating out consensus analyst estimates by quite a margin. Revenues in the most recent quarter soared, with sales improving by a whopping 25% year over year. Further, earnings per share jumped by a remarkable 78% compared to adjusted EPS in the second quarter of fiscal 2017. In general, financials in the quarter were driven by continued implementation of its growth strategies, strong men’s and digital performance, coupled with strong synergies due to its website.

To best display our point, we have created an interactive dashboard display titled, Where Does Lululemon Derive Its Revenues? Please click on the link to learn more.

While the athleisure trend continues to cool off, the larger apparel market is benefiting from a strong uptrend in the health and wellness sector, and an overall good global consumer economy. These developments have definitely helped improve the company’s financials over the past few quarters. This is evident in the market share gains in stores and in e-commerce, that the company has managed to achieve over the last three quarters in particular. We expect these trends to help the company expand its top line in the near term.

Additionally, Lululemon has worked hard on improving its digital offerings over the past few months. In this respect, the company has concentrated on making the online experience as engaging and seamless as possible. With strong digital marketing campaigns and special promotions, the company has managed to record consistent gains from digital over the past five quarters. We expect revenues earned from digital to grow multifold in the year, and for e-commerce to become a large revenue driver in the future.

Lastly, Lululemon realized the need to push internationally in order to best capitalize on rather untapped markets. In this respect, the company decided to use a good amount of  its resources on executing international expansion over the last few quarters. In the last few months, the apparel giant has heavily targeted growing its business in Asia, with a special emphasis on China, leading to heavy growth figures in the region. Going forward, we expect the company to benefit heavily from its retail and online expansions in the international space.

All in all, it seems as though the company is on the right path at the moment. With good execution of the existing revenue building initiatives, we expect Lululemon to post positive financials in the near term.