Key points:
- LULU shares have rallied over 30% in the last month
- Buyer interest might continue after company announce plans to double its 2021 revenue
- Company set to start ‘Power of Three 2' growth strategy
Lululemon (NASDAQ: LULU) has gained unwavering momentum over the past month or so, with investors still rejoicing in the company’s strong Q4 report and equally optimistic FY22 outlook. Since mid-March, LULU shares have rallied over 30% after tailing off towards the end of 2021 with the downside continuing into early 2022.
Lululemon appeared resilient at a time when retailers were plagued with macro-uncertainty, and its growth story is undoubtedly impressive. Shares of LULU are trading with a current gain of just over 2% in Wednesday’s premarket trading, continuing the week's upside momentum following an announcement of the company’s ‘Power of Three 2’ growth strategy.
From avid retailer investors to those finely-tuned to long-term metrics, a company announcement that revolves around plans to double its 2021 revenue is bound to spark some interest. With the athletic retailer already outperforming 2021's expectations, it only makes sense to leverage its formula, translating to growth across key pillars such as product innovation, guest experience, and market expansion. The company hopes to double its revenue of $6.25B to $12.5B by 2026.
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The strategy involves pams to double men’s and digital revenues, and to quadruple international revenues relative to 2021. The company will also keep focus on women’s business, store channel and North American operations.
Calvin McDonald, CEO of Lululemon commented:
“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”
Adding…
“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.”
If there’s anything to take away from the company’s new Power of Three 2 strategy, its that the retailer, as McDonald stated, is still early in its growth story; hence whilst seeming bold, the strategy isn’t unrealistic. With this in mind, we can expect general strength in LULU shares, with plenty more upside potential in the long term.
