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Lululemon’s Unveils New Three-Pillar Approach to Growth as it Streamlines Focus

Men’s, digital and international. Those are the three pillars Lululemon Athletica Inc. will focus on over the next five years as it thinks about how to grow revenues.

The yoga-inspired active wear firm disclosed its growth plan Wednesday ahead of its first Analyst Day meeting in five years. In a nutshell, the plan is to double men’s and digital revenues and quadruple international sales. Lululemon’s core women’s business and store formats in North America will also remain key focus areas and are expected to generate revenue growth in the low double-digits annually over the next five years, the company said.

“We believe Lululemon has a unique opportunity to push beyond traditional expectations to develop innovative products and become a fully experiential brand that creates compelling experiences for guest who want to completely live into the sweatlife,” chief executive officer Calvin McDonald, said.

Sweatlife is Lululemon’s vision for being the “experiential brand that ignites a community of people living the sweatlife through sweat, grow and connect,” the company said, adding that its vision speaks to those who want “flexibility and choice as they lead a healthy, mindful lifestyle.”

Lululemon is planning for increased product innovation and expansion in multiple categories, including the women’s and accessories business to support yoga, running and training. Plans for product collaboration, expansion of its Office/Travel/Commute line and new opportunities, such as self care, will also be part of its outline for growth. On the digital front, Lululemon said it will integrate experiences across channels, including events and new store formats. For its international business, the company says it has seen growth across China, as well as the Asia-Pacific and EMEA regions, but it also noted growth potential remains in its U.S. and Canadian markets.

On the financial guidance, Lululemon said it expects total annual revenue growth in the low teens for the next five years, with modest gross margin expansion on an annual basis. Operating income growth is expected to exceed revenue growth annually, while annual square footage growth was guided to the low double-digits, with annual capital expenditures at 6 percent to 8 percent of revenues.

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