The activewear category, boosted by the pandemic, has maintained its momentum even through supply chain challenges and the threat of the Delta variant. Lululemon, Under Armour and Athleta all posted strong Q2 2021 financial results, on top of several recent deals and developments in the space demonstrating how much interest there is in the category.
Lululemon posted an extremely strong quarter, led by a 61% net revenue increase to $1.5 billion, with store revenue up 142% and ecommerce revenue up 8%. The retailer managed digital growth despite direct-to-consumer penetration falling to 41.2% of net revenue compared to 61.4% in Q2 2020, a sign that the brand is a high achiever both in-store and online.
“Our performance in Q2 was driven by a strong response to our product offering, improving productivity in our stores, and sustained strength in ecommerce,” said Meghan Frank, CFO at lululemon in a statement. “While we continue to navigate the COVID-19 environment, including supply chain headwinds, I’m excited with our momentum as we head into the second half of the year and am pleased to be able to increase our guidance.”
Under Armour had a similarly positive quarter, with revenue up 91% to $1.4 billion. The company’s retail revenue rose 52%, with strong in-store sales offsetting an 18% decline in digital sales as shoppers returned to brick-and-mortar. Wholesale revenue soared 157% despite the company’s plans to exit between 2,000 and 3,000 wholesale partnerships.
Results were strong across all three of Under Armour’s primary product categories: apparel revenue increased 105% to $874 million; footwear revenue grew 85% to $343 million; and accessories revenue rose 99% to $112 million.
Athleta was once again Gap’s strongest brand in Q2 2021, which was the retailer’s strongest quarter in more than a decade. Sales across all Gap’s banners were up 29% versus the same period in 2020 and up 5% compared to 2019, but Athleta led the pack with sales up 35% compared to 2019. The activewear retailer has been a consistent bright spot for the company, even during its more challenging periods, largely thanks to its on-trend product selection.
Athleta attributed some of its brand loyalty to its inclusive sizing options, which launched in Q1 2021. The brand will continue building on this loyalty with the launch of AthletaWell, a digital platform designed to build engagement and a community of empowered women, as well as through an expansion into Canada with a website and two stores.
The consistent strength of activewear is attracting new companies to the space as well. Footwear manufacturer Wolverine Worldwide acquired Sweaty Betty for $410 million in August 2021, and Allbirds launched its own activewear collection with a net zero carbon footprint two weeks later. Additionally, Kohl’s will begin carrying Eddie Bauer products in fall 2021 to boost its credentials in both activewear and outdoor goods.