Lululemon Athletica CEO Calvin McDonald in an appearance on CNBC Tuesday said he does not expect the company’s sales momentum to slow down with the arrival of Covid-19 vaccines
“We don’t see any dramatic impact in the reduction of the momentum in the business … there are a lot of drivers of growth within the marketplace,” he told Jim Cramer in a “Mad Money” interview. “I think there are some lasting [pandemic] inflection points across the guests.”
Like many other businesses, Lululemon saw its digital sales increase exponentially through the coronavirus pandemic. Lululemon reported a 94% growth in the category in its third-quarter, which ended Nov. 1, as consumers spent more online.
The athleisure wear retailer’s sales were also buoyed by consumers seeking to get active with health and wellness in mind, alongside a rising interest in comfort clothes, McDonald said.
“Those are all drivers that are going to continue moving forward post the pandemic,” he said. “Combine those with momentum we have in the early stages of our growth and innovation, I don’t see any real material impact slowing our business down.”
Lululemon reported bringing in more than $2.67 billion of revenue in its three fiscal quarters stretching early February through early November. While revenues from physical stores depleted more than 36% year over year during that period, direct-to-consumer revenue has more than doubled in that nine month span.
Between the three quarters, Lululemon’s direct-to-consumer business reports $1.56 billion of sales, up from $674 million in the same span in 2019, offsetting brick-and-mortar losses.
In the U.S., the athleisure market could reach $105.1 billion in sales in 2020, based on data from Euromonitor International and Coresight. That number is a 9% decline from 2019, but the firms are projecting the market to grow about 6.5% annually through 2023.
Innovation, omni-guest experiences and market expansion make up Lululemon’s growth strategy. The company’s goals are to double its men’s business, double digital sales and quadruple the international business, McDonald said.
“We’re early innings in our growth across all those levers, so we’re very excited about the future,” he said.
Shares of Lululemon rose 1.05% in Tuesday’s session, closing at $356.07. The stock is up 53.70% year to date.
