Lululemon can thank its loyal female customers for ensuring its running and yoga gear is also just the right fit for men.
Lululemon (LULU) began as a retailer that tailored tights and tanks for yoga-loving women. But the retailer’s men’s business has taken off in recent quarters. Comparable sales for men’s outperformed in the latest quarter, up 19%, signaling that more men are becoming comfortable wearing clothes from a company that built its reputation with women first.
The Vancouver-based apparel maker and retailer on Tuesday reported that net revenue in its most recent quarter jumped 10% to $423.5 million, with total comparable sales increasing by 6%. Analysts had anticipated $419 million in total sales on a 2.6% increase in same-store sales.
The men’s business at Lululemon is projected to reach $1 billion in annual sales in the next few years, though men’s clothing and accessories for now accounts for less than a fifth of volume at the company’s stores. The retailer has said that male consumers aren’t just yogis, which was the audience that the retailer initially targeted for women. Instead, Lululemon has made inroads getting male runners, cyclists, and CrossFit athletes to buy the company’s gear.
Lululemon last year opened its first standalone men’s store in the SoHo district of New York City. Executives say the company continues to tinker with how they can address the market, either by opening more standalone stores or by expanding its merchandise assortment in existing locations. Lululemon maintains that those locations would need to be near a women’s store (the New York City store is across the street from a women’s store). That’s because girlfriends and wives are still responsible for introducing a lot of men to the brand.
“Our male guest does have a lot more permission to come into the Lululemon [collection], but she still shops for him,” said Chief Executive Laurent Potdevin
Overall, Lululemon reported a better than expected quarterly net profit and projected second-quarter revenue between $440 million to $445 million, a range that implies an increase from the $390.7 million reported last year.
There was one glaring issue in the otherwise glowing earnings report: inventory. Lululemon’s inventory at the end of the latest quarter jumped 31%. That was due to issues with a West Coast port labor dispute, which led to delayed deliveries for many consumer goods. As a result, the retailer warned that inventories would remain high “for the next couple of quarters.”