Need to Know
- Digital sales for the activewear retailer were up 157% in Q2, as the coronavirus pandemic continued to drive shoppers towards online shopping.
- Direct to consumer (D2C) net revenue accounted for 61.4% of Lululemon’s total net revenue; that figure was at just 24.6% for the same period in 2019.
- Total revenue exceeded expectations for the quarter, at $902.9 million; the company was expected to earn a revenue of $842.5 million.
- Lululemon also reported that over 400,000 customers have taken advantage of its virtual waitlist technology to shop in-store.
Athletic apparel retailer Lululemon posted its Q2 results on Wednesday, with the company’s online sales skyrocketing amid the continuing coronavirus pandemic.
Lululemon’s digital sales for the second quarter of 2020 were up 157% year-over-year, with direct-to-consumer net revenue clocking in at $554.3 million for the period. Overall, DTC revenue accounted for a remarkable 61.4% of Lululemon’s net revenue over the quarter; in 2019, that figure was 24.6%.
“In order to support growth in the business, capture a potential further increase in demand in quarter four and ensure our guests continue to receive the highest level of service we have accelerated investments this year within our e-commerce channel,” Calvin McDonald, CEO of lululemon, said of the Q2 earnings report.
“These investments include developing site enhancements, building our transactional omni-functionality, and increasing fulfillment capabilities. These further enhancements were on our roadmap for the next 2 years and, given our e-commerce business has currently accelerated beyond our expectations, we prioritize and pull forward these investments.”
Online sales have been consistently up for Lululemon this year: In Q1, as many stores remained shuttered due to COVID-19, Lululemon reported its direct-to-consumer net revenue increased 68% year-over-year. As of August 2, 492 of Lululemon’s 506 retail locations are open. McDonald also noted that Lululemon has benefitted from the implementation of a “virtual waitlist,” which allows customers who want to visit Lululemon’s bricks-and-mortar locations no longer have to wait in line, and instead receive a text message notification when it’s their turn to enter the store. In August, McDonald says nearly 400,000 guests used the virtual waitlist tool.
Lululemon’s overall net revenue for Q2 was $902.9 million, an increase of 2% compared to the second quarter of 2019.
“We’re pleased with our overall business results for the second quarter, as lululemon increasingly lives into its Omni potential,” Calvin McDonald, CEO of Lululemon, said of the company’s Q2 results. “As trends around the world are shifting to working and sweating from home with an increased focus on health and wellness, we believe 2020 is likely an inflection point for retail and for lululemon. We are cautiously optimistic with regard to the second half of the year as we continue to navigate the uncertain environment.”
While Lululemon is not offering a 2020 outlook at this time, McDonald says the company’s recent investment in Mirror, the home fitness device, is expected to substantially boost its bottom line: “We are now assuming that MIRROR will generate in excess of $150 million in revenue for the full year 2020,” he said, noting that initial expectations were that Mirror would generate closer to $100 million.