Is $100 Too Expensive For Yoga Pants? Lululemon Insists It Will Not Discount Prices.

After Lululemon Athletica Inc. (NASDAQ:LULU) launched its new five year plan on the first analyst day event in 2014, its share price hit a record high of $179.5.

The Sephora USA Inc. Inc. USA Calvin McDonald program, which joined the high-end Yoga suit manufacturer in North America a month ago, created new growth points by expanding new categories, while using the growth space of men's clothing, online channels and international markets to maintain the annual income growth rate of 11%-13% before 2023.

Out of the "quality gate" trough of pparent yoga pants in 2013 and the public relations incident of founder Chip Wilson, Lululemon AthleticaInc. has popularized the high-end yoga pants of $100 for the past five years, and has not only started the trend of sports and leisure, but also began to decline in the price of 350 dollars.

The group has fulfilled some of its 2020 development goals put forward by former CEO Laurent Potdevin.

Laurent Potdevin abruptly stepped down in February last year because of "improper conduct".

Now, Lululemon Athletica Inc. plans to further explore the potential of men's clothing on the basis of consolidating traditional women's wear categories such as yoga, running and training, and the casual wear series of office, commuter and tourist occasions, with the goal of doubling the income of this category within five years.

Last year, men's clothing contributed 21% of the group's revenue, or about 693 million dollars.

Sun Choe, chief product officer, pointed out at the analyst's daily activities: "we are reversing the impression that Lululemon is the brand of women's clothing."

Last year, the brand's women's bottled products recorded a 21% increase in sales, while men's downloading increased by 28%. Nevertheless, chief operating officer Stuart Haselden revealed that 40% of men's products were actually purchased by women.

Calvin McDonald told analysts that their potential lies in Lululemon's "very low" brand popularity in the male market.

Last month, the Group signed just the first male brand ambassador, NFL Nick Foles, the former quarterback of the Philadelphia hawks.

Meanwhile, the world's largest sporting goods manufacturer Nike Inc. (NYSE:NKE) Nike group is targeting the core female customer group of Lululemon Athletica Inc..

At the end of last year, Nike Nike launched its first Yoga series to try to carve up the Lululemon Athletica Inc. high consumption female market, reaching the target of $11 billion for women's business in 2020.

According to Euromonitor Europe's international data, as of the end of 2018, Nike Nike had a 18.3% share of the sportswear market in the United States, ranking the second Adidas Adidas account for 6%, and Under Armour Andrea followed by 4.1%, with a share of 1.9% of Lululemon ranked fifth.

Lululemon Athletica Inc.'s digital business is consistent with men's clothing goals.

Management says that the group will focus on providing customer experience in integrating online and offline channels, and promoting revenue doubling through enriching community activities, innovative store models and affiliate programs to develop contacts with customers.

Calvin McDonald told the Wall Street journal that its membership plan will continue to offer no discount on the first media visit since taking office.

The Group believes that since they have persuaded customers to spend at least 98 dollars on high-tech design yoga pants over the years, there is no need to compete with cheaper products or even cottage brands, leading to a decline in brand level.

CalvinMcDonald also stressed that the group would not distribute channels outside its own stores and websites.

In the fiscal year, physical stores accounted for 65% of the group's revenues, while the contribution of online channels was 26%.

As of February 3, 2019, Lululemon Athletica Inc. has 440 stores worldwide.

At the beginning of the last five year plan in 2016, the group continued to operate in a single store mode. Now it has developed four kinds of store models, including guerrilla stores, 3000 square feet and 5500 square feet of stores, and the 25000 square feet flagship store in Chicago that will be unveiled this summer.

Management revealed that the seasonal guerrilla shops within 3-6 months of the lease helped the group test the market and grasp the peak season passenger flow and absorb new customers faster than the traditional stores.

Last year, the group opened 60 guerrilla stores.

Lululemon Athletica Inc., which has opened the international market for more than ten years, now has only about 11% of its revenue from overseas, far behind Under ArmourInc., Andrew and Nike Inc. Nike group.

In the next five years, the Group intends to expand its focus in China, the Asia Pacific region and the European market, and drive international revenue to an annual growth rate of over 30%. The target is that the scale of overseas business in 2023 will be four times the level in 2018 and all regions will be profitable.

At the end of March, the annual performance analyst conference call, Calvin McDonald said that the group plans to add 25-30 international stores in the current fiscal year 2019, while China will accelerate the pace of expansion.

On the other hand, the Group continues to step into the competitive edge of Nike Inc. Nike group, Adidas AG (ADSGn.DE) Adidas group and other large competitors.

CalvinMcDonald first disclosed the plan to enter the footwear market on analyst day activities. He said the group had tested customer responses and received positive responses, but footwear products still need to be tested in a small range, so they refused to disclose the timetable for the complete product line.

Individual Lululemon stores and brand websites began selling sports shoes of Losangeles brand Athletic Propulsion Labs from August 2017.

As some analysts expect, the group will further explore the personal care market in the us with a market size of US $90 billion.

In the coming June, Lululemon's brand of fragrance agent, anti shampoo spray, moisturizing cream and lip balm will visit 50 Lululemon stores and websites.

Analysts believe that the above products are close to the daily needs of Lululemon core customers and complement each other with clothing accessories.

The group has released specific information on the personal care products on the official website of the brand. Instagram accounts show that the volume of dry cleaning spray and fragrance agent is 34 Canadian dollars and 18 Canadian dollars, about 25 dollars and 13 yuan, 170 yuan and 90 yuan respectively.

"We are ready to start the new growth phase of Lululemon on the basis of past success and give full play to brand potential," Calvin McDonald said in a press release.

During his visit to CNBC, he pointed out that sports leisure does not represent the essence of Lululemon.

He said that Lululemon is a lifestyle brand. Management believes that Lululemon is an experiential brand. "We learn from testing," he told the chair.

Calvin McDonald emphasizes that men's clothing, full channel customer experience and market expansion are still the core of growth strategy, and new categories such as sports shoes and protective products are only areas of exploration, and will not be regarded as growth drivers.

"We are a brand for 20 years, but the trend now shows that the best days are still ahead," Calvin McDonald said.

He retorts that some analysts believe that the momentum of Lululemon will weaken because of the low brand loyalty of the millennial generation. He points out that "our customer loyalty is higher than any brand I have ever seen."

He revealed that 92% of loyal customers have been patronizing Lululemon for many years. High technology and high performance oriented products are the key factors that they continue to attract customers to pay for hundreds of dollars of yoga pants and sports bra.

In the 2018 fiscal year, Lululemon Athletica Inc. achieved a revenue of $3 billion 288 million, an increase of 24.1% over the same period last year, a substantial increase in the average annual growth rate of 2013-2017 years, and a 54.8% rise in operating profit to 706 million US dollars.

Management expects revenue to increase by 13.7% to $3 billion 740 million this year.

In 2016, the group set a target of earning $4 billion in 2020.

The latest five year plan does not provide specific prospects.

Lululemon Athletica Inc. (NASDAQ:LULU) was closed at $177.29 on Thursday, 78.8% in the past 12 months, and 0.5% in the S & P retail index SPDR S&P Retail ETF (XRT).