Lululemon Athletica, the Vancouver-based clothing company whose upscale yogawear has taken North America by storm, is stepping up its international expansion after its annual profits nearly doubled.
The company, which is capitalising on the “athleisure” trend that sees leggings worn even in the office, said more than half of its planned 40 to 50 store openings this year would be in overseas markets.
Stuart Haselden, chief operating officer who is spearheading the push outside the US and Canada, said the company was also “investing aggressively” in ecommerce in new territories.
Shares in Lululemon, which have already rallied 87 per cent in the past year, rose as much as 10 per cent in after-hours trading on Wednesday as investors cheered its full-year results and outlook for the year ahead.
Net income at Lululemon, where yoga pants sell for more than $100 each, jumped from $259m last time to $484m in the year to the end of February.
Revenues rose from $2.65bn to $3.3bn and on Wednesday the company forecast the momentum would continue this year, predicting net revenues to rise to about $3.7bn.
Executives forecast that like-for-like sales would rise in the “low-double digits” this year and set out plans for a $500m share buyback.
The upbeat update from Lululemon comes at a time of mixed fortunes for US retailers. While some companies are reporting some of their strongest results in years, others including Payless ShoeSource and Charlotte Russe have filed for bankruptcy protection this year.
Lululemon, founded in 1998 and listed nine years later, does about 90 per cent of its business in North America, where the brand is favoured by celebrities including Kim Kardashian. It hit a low point in 2013 when it was sued over hiding defects in yoga pants, which led to a costly recall. Its co-founder also caused a storm when he blamed the sheerness of the pants on the shape of women’s bodies.
The company now has 440 stores, after recently opening in locations including Osaka, Macau and Amsterdam.
Lululemon has yet to make money in Europe but was seeing “strong profitability in Asia”, Mr Haselden added. It planned to launch new websites in markets including Korea, France and Germany.
“We’re excited to see accelerating trends now in Europe as our brand awareness levels continue to increase”, Mr Haselden said, adding that the company would discuss the international expansion in more detail next month.
In another bright spot in the retail sector, shares in Calvin Klein owner PVH also rallied about 10 per cent in after-hours trading as its outlook also reassured Wall Street. While fourth-quarter revenues fell 1 per cent from a year ago to $2.48bn, the company projected sales for the current financial year to rise about 4 per cent.