Lululemon is a leading designer and retailer of athleisure and sports apparel. The company’s first store was opened in 1998 in Vancouver, Canada. With the initial success of its Luon fabric for its women’s yoga leggings and the company’s subsequent product and fabric innovations, Lululemon has grown into a global brand. As of 2023, the company had 758 store locations (the main geographies are U.S., China, Canada, Australia and the U.K.) and generated $9.6B in revenues servicing over 20M members.
Hi, as always a very useful analysis. Just a small observation.
I have checked the 2022 and the 2023 annual reports and found that the data you refer as "operating margin" are actually (by the Company definitions) "Income from Operations" margin.
LULU reports "Income from Operations" data "(...) without taking into account our general corporate expenses and certain other expenses."
So I think that when you say that "(...) Operating Margins for the eCommerce business is also much higher at 42% in 2023 vs 27% for the stores" ... these are actually "Income from Operations" margins, (and those data are from the 2022 annual report because "(...) during the fourth quarter of 2023, has shifted resource allocation decisions to be focused by regional market, rather than by selling channel. This resulted in a change in the Company's operating segments.").
I think these are important clarifications in order to have common metrics with operating margins of competitors or other companies in general.
🚀Great dive. One thing I liked about your article that a lot of people dont is the necessary reinvestment required to propel forward with market share, better products, scale etc. You took that into account. Also like the vectors of growth section in terms of assessing TAM and SAM. I’m in a similar niche and I write about the broad market too, quite complementary so I really liked reading your article! Would love to support one another 👌🏽⚡️
Hi, as always a very useful analysis. Just a small observation.
I have checked the 2022 and the 2023 annual reports and found that the data you refer as "operating margin" are actually (by the Company definitions) "Income from Operations" margin.
LULU reports "Income from Operations" data "(...) without taking into account our general corporate expenses and certain other expenses."
So I think that when you say that "(...) Operating Margins for the eCommerce business is also much higher at 42% in 2023 vs 27% for the stores" ... these are actually "Income from Operations" margins, (and those data are from the 2022 annual report because "(...) during the fourth quarter of 2023, has shifted resource allocation decisions to be focused by regional market, rather than by selling channel. This resulted in a change in the Company's operating segments.").
I think these are important clarifications in order to have common metrics with operating margins of competitors or other companies in general.
Thanks Giuseppe. Appreciate the color.
🚀Great dive. One thing I liked about your article that a lot of people dont is the necessary reinvestment required to propel forward with market share, better products, scale etc. You took that into account. Also like the vectors of growth section in terms of assessing TAM and SAM. I’m in a similar niche and I write about the broad market too, quite complementary so I really liked reading your article! Would love to support one another 👌🏽⚡️
You missed the biggest draw for the company: the products make the wearers more attractive