Need to Know
- Lululemon’s Q4 results showed strong digital growth, with the company reporting a 92% year-over-year increase in online sales.
- Direct-to-consumer sales represented 52% of total sales for Q4, up from 33% during the same time period last year.
- lululemon’s acquisition of home fitness provider MIRROR also proved fruitful—Mirror generated $170 million in revenue in 2020 and was acquired for $500 million.
Fitness apparel company lululemon saw huge digital gains in Q4, the company reported in its Q4 filing on March 30.
The company saw a whopping 92% year-over-year increase in online sales, with direct-to-consumer sales representing more than half of its total sales—DTC sales accounted for 52% of total sales for Q4, up from 33% during the same time last year. Lululemon’s net income hit $329.8 million, up from $298 million, and its revenue hit $1.73 billion, which is up 24% year-over-year.
Sales in its women’s category were up 19%, while men’s grew 17%. lululemon estimates its first-quarter revenue will be between $1.10 billion and $1.13 billion and estimates its revenue for fiscal 2021 to be between $5.55 billion and $5.65 billion.
In 2018, lululemon set the goal of doubling its e-commerce revenue by 2023; CEO Calvin McDonald said in an earnings call that company has now achieved that benchmark, three years ahead of schedule. “We now have a very meaningful e-commerce business that is driving both new guest acquisition as well as strengthening our omni-guest relationships,” McDonald said. “The relationship we have with our guests in-store is unique and special for our brand. And our e-commerce vision is to create our online version of that relationship as well.”
“We are now able to reevaluate how high is high for our digital growth, especially in our international markets,” McDonald continued. “2020 has reset our expectations for what is possible.”
Lululemon made a number of strategic investments in 2020 which helped to bolster its bottom line. Notable among these was the company’s July acquisition of home-fitness platform MIRROR. That acquisition generated $170 million in revenue for Lululemon in 2020. MIRROR is a large, reflective home workout device that streams workouts to users, including a series of videos starring lululemon ambassadors. On the earnings call, McDonald said lululemon plans to add two more production studios in 2021 and to triple the number of live classes offered on the MIRROR platform. Lululemon will also add seven more lululemon ambassadors to its current roster of 15.