Lululemon CEO Says Men’s Shoe Launch ‘Far Exceeded’ Expectations with ‘Strong Response’ in North America, China
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One month after Lululemon unveiled its much-anticipated men’s footwear range at a media event in New York, initial results are in.
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On the Vancouver-based company’s fourth-quarter earnings call on Thursday, Lululemon’s chief executive officer Calvin McDonald told analysts that he is “very pleased” with the initial reaction to the new men’s styles.
“We were seeing a particularly strong response to Cityverse from our male guests in North America and in China, and the guest response is exceeding our expectations,” McDonald said. “Our teams are chasing into this initial strength, and we’ll build upon this momentum with additional footwear innovations planned throughout the year.”
Lululemon’s new men’s shoe range officially launched on Feb. 13 with the brand’s first casual sneaker called the Cityverse, which features a cushioned midsole that contours to the foot. Two additional running models – the Beyondfeel, which launched on March 19, and Beyondfeel Trail, which will debut on May 7 – were also teased during February’s media event.
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Lululemon first debuted footwear in March 2022. To launch the category, the athletic company took a women-first approach, relying on data and foot scans from women to create a shoe specifically designed for the female foot. After the launch, McDonald said in a call with investors that demand for the new products were in excess of supply and “far exceeded” the company’s expectations.
“Our strategy with footwear is the same as apparel,” McDonald added on Thursday’s earnings call. “We lead with technical innovations that solve for the unmet needs of our guests. We can then leverage our expertise in raw material innovation and technical construction to offer versatile styles designed for everyday use.”
The extension into men’s shoes comes as Lululemon is placing further efforts into growing the men’s business. According to McDonald, the men’s division saw 15 percent growth in 2023, with a compound annual growth rate of 21 percent in men’s revenue over the last two years.
“I’m very excited about the product pipeline for men’s this year,” the CEO said. “We are launching the most innovation I’ve seen in the last number of years across categories and activities. A few highlights include new fabric innovations within our golf category and continuing to build upon the success of soft jersey with additional styles.”
Lululemon’s fourth-quarter net income jumped more than fivefold to $669.5 million from $119.8 million a year earlier, when the bottom line was pulled down by $442.7 million in charges tied to the Mirror at home workout tech business.
Net sales in Q4 increased 16 percent to $3.2 billion — in line with analysts’ expectations, while net sales for the full year increased 19 percent to $9.6 billion.
But Lululemon sees that growth rate slowing and is projecting sales gains for 2024 of 11 percent to 12 percent. That puts the top line in a range of $10.7 billion to $10.8 billion, with the help of an extra week in the current fiscal year.
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