lululemon Announces Five-Year Growth Plan to Double Revenue by 2026 to $12.5 Billion

Company on track to successfully achieve 2023 revenue and earnings growth targets ahead of schedule

Growth strategy to 2026 includes plans to double men’s, double digital, and quadruple international revenues, while continuing to grow core areas of the business

Plan builds upon the company’s successful Power of Three formula to accelerate growth and drive value creation

Building upon the momentum of the last three years and having successfully delivered its overall revenue and earnings goals early, lululemon athletica inc. (NASDAQ:LULU) today announced its new Power of Three ×2 growth strategy.

Leveraging its proven formula and supported by the Company’s commitment to its Impact Agenda, the Company plans to double its 2021 revenue of $6.25 billion to $12.5 billion by 2026. It expects significant growth across key pillars including product innovation, guest experience, and market expansion. The Company’s Power of Three ×2 growth strategy includes a plan to double men’s and digital revenues, and to quadruple international revenues relative to 2021. The Company’s women’s business, store channel, and North American operations will continue to play an important role in the strategy, with women’s and North America each expected to generate low double digit compound annual growth rates (‘CAGR’) in revenue over the next five years, while stores are expected to grow in the mid-teens.

“The success of our Power of Three formula in delivering on our 2023 growth strategy supports our goal to double the business over the next five years,” said Calvin McDonald, Chief Executive Officer. “We remain early in our growth journey, with our strong product engine, proven ability to create enduring guest relationships, and significant runway in core, existing, and new markets. Following our compelling track record of delivering against our goals, I am excited about taking our growth strategies to the next level to serve more and more guests around the world.”

Doubling Down on the Core Drivers of Success: Product Innovation, Guest Experience and Market Expansion to Achieve $12.5 Billion by 2026

From 2019 to 2021, in the adult active apparel industry, lululemon gained more market share globally than any brand in this industry, across the markets that The NPD Group tracks.¹ Having grown revenue from $3.3 billion in 2018 to $6.25 billion in 2021, the Company will continue to focus on its three strategic pillars to fuel revenue growth over the next five years:

Product Innovation: Having achieved its 2023 men’s growth target two years early, the Company expects to double the size of its men’s revenues in 2021 by 2026, along with ongoing expansion in its women’s and accessories businesses. The Company will leverage Science of Feel, its distinctive lens for innovation, to innovate across categories, with significant runway within Core performance (Run, Train, Yoga and On the Move) as well as exciting opportunities in Play (Tennis, Golf and Hike) and new categories such as footwear, which was recently launched.

Guest Experience: On top of a tripling of its digital revenue between 2018 and 2021, the Company projects to double its digital revenues by 2026. To accomplish this goal, lululemon will continue to create world-class experiences by harnessing the power of its guest relationships to build stronger connections across both physical and digital, cultivate its community, and inspire through innovation. Last week, the Company announced the expansion of lululemon Like New, the brand’s first trade-in and resale program, available nationwide in the United States beginning April 22.

Building on strong guest interest in, and the learnings from its pilot membership program, as well as the Company’s vision to create a new path for connected fitness, lululemon will launch a new, two-tiered membership program later this year. The intent of the program is to build stronger engagement with its brand, community, and products, to create the most immersive fitness marketplace in the industry.

Market Expansion: The Company is on track to quadruple its international revenue relative to 2018 in 2022. Under its new Power of Three ×2 growth strategy, lululemon expects to again quadruple its international revenues relative to 2021 by 2026. With significant runway in both new and core markets, lululemon is focused on ensuring local relevance and deepening connection as it continues to introduce the brand to more communities around the world. Engaging guests in China Mainland, growing its core markets, and scaling and entering new countries across APAC and Europe will be key to delivering on its new goal. The Company also plans to open its first stores in Spain and Italy.

Impact: People and Planet

lululemon added its Impact Agenda priorities, including supporting its people and creating a healthier planet, to its successful Power of Three growth model. The new plan includes focusing on building an environment that is equitable and inclusive, advancing equity in wellbeing across its communities, and working to prevent environmental harm and helping to restore the planet. The Company remains committed to investing in its people and continues to expand its employee benefits, recently raising minimum base pay in North America and introducing more mental health, mentorship, and leadership programs for personal and career development.

Financial Plan

lululemon’s strategic growth plan is underpinned by the Company’s strong financial position. In addition to doubling men’s and digital, and quadrupling international revenues, other key financial goals of the Company’s Power of Three ×2 growth strategy include:

• Total net revenue CAGR of 15% between 2021 and 2026
• Modest operating expansion annually
• EPS growth to outpace revenue growth
• Annual square footage growth in the low double digits

“We are setting bold but realistic 2026 targets from a position of financial strength, while delivering on our 2023 goals with significant growth across our core business,” said Meghan Frank, Chief Financial Officer. “We have a long runway ahead and are well-positioned to build on our strong momentum and deliver sustainable long-term value creation for all our stakeholders.”

Speaking to investors today at the Company’s analyst day are: Calvin McDonald, Chief Executive Officer; Sun Choe, Chief Product Officer; Celeste Burgoyne, President, Americas and Global Guest Innovation; Nikki Neuburger, Chief Brand Officer; Michael Aragon, Chief Executive Officer of MIRROR and lululemon Digital Fitness; André Maestrini, EVP, International; and Meghan Frank, Chief Financial Officer.

Conference Call Information

The presentations will be broadcast live over the internet beginning at 9:00 AM ET and can be accessed on the investor relations section of the Company’s website, www.lululemon.com. Those interested in listening to the call are invited to dial 1-800-319-4610 or 1-604-638-5340, if internationally, approximately 10 minutes prior to the start. A replay of the webcast will be available following the presentation.

About lululemon athletica inc.

lululemon athletica inc. (NASDAQ:LULU) is a performance apparel and footwear company for yoga, running, training, and most other sweaty pursuits, creating transformational products and experiences which enable people to live a life they love. Setting the bar in technical fabrics and functional designs, lululemon works with yogis and athletes in local communities for continuous research and product feedback. For more information, visit LULULEMON.COM.

Forward-Looking Statements:

This press release includes estimates, projections, statements relating to the Company's business plans, objectives, and expected operating results that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. In many cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "outlook," "believes," "intends," "estimates," "predicts," "potential" or the negative of these terms or other comparable terminology. These forward-looking statements also include the Company's guidance and outlook statements. These statements are based on management's current expectations but they involve a number of risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of risks and uncertainties, which include, without limitation: the Company's ability to maintain the value and reputation of its brand; the current COVID-19 coronavirus pandemic and related government, private sector, and individual consumer responsive actions; its highly competitive market and increasing competition; increasing costs and decreasing selling prices; its ability to anticipate consumer preferences and successfully develop and introduce new, innovative and updated products; the acceptability of its products to guests; its ability to accurately forecast guest demand for its products; changes in consumer shopping preferences and shifts in distribution channels; its ability to expand in light of its limited operating experience and limited brand recognition in new international markets and new product categories; its ability to realize the potential benefits and synergies sought with the acquisition of MIRROR; its ability to manage its growth and the increased complexity of its business effectively; its ability to successfully open new store locations in a timely manner; seasonality; disruptions of its supply chain; its reliance on and limited control over third-party suppliers to provide fabrics for and to produce its products; suppliers or manufacturers not complying with its Vendor Code of Ethics or applicable laws; its ability to deliver its products to the market and to meet guest expectations if it has problems with its distribution system; increasing labor costs and other factors associated with the production of its products in South Asia and South East Asia; its ability to safeguard against security breaches with respect to its technology systems; its compliance with privacy and data protection laws; any material disruption of its information systems; its ability to have technology-based systems function effectively and grow its e-commerce business globally; climate change, and related legislative and regulatory responses; increased scrutiny regarding its environmental, social, and governance, or sustainability responsibilities; an economic recession, depression, or downturn or economic uncertainty in its key markets; global economic and political conditions and global events such as health pandemics; its ability to source and sell its merchandise profitably or at all if new trade restrictions are imposed or existing trade restrictions become more burdensome; changes in tax laws or unanticipated tax liabilities; its ability to comply with trade and other regulations; fluctuations in foreign currency exchange rates; imitation by its competitors; its ability to protect its intellectual property rights; conflicting trademarks and patents and the prevention of sale of certain products; its exposure to various types of litigation; and other risks and uncertainties set out in filings made from time to time with the United States Securities and Exchange Commission and available at www.sec.gov, including, without limitation, its most recent reports on Form 10-K and Form 10-Q. You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. The forward-looking statements made herein speak only as of the date of this press release and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances, except as may be required by law.

¹ Source: The NPD Group/ Consumer Tracking Service/ US, Canada, France, Germany, Italy, Spain, UK, Japan, & Korea combined/based on revenue

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