Lululemon Plans 30+ New International Stores with Majority in Fast-Growing China Market

Lululemon is looking to continue strong global growth after a 60% international sales increase boosted the retailer’s revenue growth to 24% in Q1 2023, which ended April 30, bringing total sales to $2 billion for the quarter. The company is planning to open 50 net new stores this year, and 30 to 35 will be international, with the majority located in China.

China has been a success story for the athleticwear retailer, with revenue in the country jumping 79% year-over-year. The growth was driven in large part by store reopenings — approximately one-third of Lululemon’s 71 China stores closed for part of Q1 2022 due to a resurgence in COVID restrictions — but the new locations could help maintain high growth rates in the country. In comparison, North American revenue increased just 17% year-over-year.

International growth also was likely helped by recent investments in Spain, where the company opened two stores and launched a dedicated ecommerce site in September 2022. The company’s worldwide expansion is part of the “Power of Three x2” growth plan, which has goals including tripling international revenue from 2021 levels by the end of 2026.

Lululemon’s overall comparable sales were strong, at 14% year-over-year, while DTC sales rose 16%. Additionally, DTC’s share of total revenue fell to 42% in Q1 2023, from 45% in Q1 2022, as the retailer opened 81 new stores in the past year to fuel brick-and-mortar growth.


“It’s also great to see ongoing strength in traffic across both channels,” said Meghan Frank, CFO of Lululemon on a call with investors. “In both stores and digital channels, traffic increased approximately 30%. This speaks to the strength of our omni operating model as we engage with our guests in ways most convenient to them.”

The retailer saw significant growth across all categories, with women’s revenue up 22% year-over-year, men’s up 17% and accessories up 67%.

Lululemon’s revised full-year revenue forecast is now between $9.44 billion and $9.51 billion in revenue, up from the $9.31 billion to $9.41 billion projected earlier. Q2 sales are expected to hit between $2.14 billion and $2.17 billion, representing 15% growth from Q2 2022.

“Our Q1 results were strong as guests responded well to our product offering in all our markets across the globe,” said Frank in a statement. “A meaningful acceleration in our China sales trend, coupled with lower air freight, contributed to our better than planned financial performance. We are pleased with our momentum heading into the second quarter and for the full year as reflected in our revised outlook for FY23.”

One potential weak point is inventory, which was up 24% to nearly $1.6 billion at the end of Q1 and is expected to grow another 20% in Q2. However, executives attributed this increase to the brand’s rapid growth, and Frank said the company is “comfortable” with its inventory position.

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