jentakespictures Lululemon Athletica Inc. ( NASDAQ: LULU ) is well-known for high-quality yoga pants, and they are expanding their product categories into running shoes and men’s category. I favor Lululemon’s superior comparable store sales growth and their direct-to-consumer initiative.
I believe Lululemon still has a huge runway for future growth, especially in the international markets, and I am initiating with a "Buy" rating with a one-year price target of $350 per share. Category Expansion and International Market Growth Lululemon offers performance apparel, footwear, and accessories marketed under the Lululemon brand, and the company has already expanded its original yoga category into footwear and some other sports categories such as running and training. The revenue contribution from women’s products has dropped from 66.
7% in FY21 to 63.9% in FY23. Lululemon 10Ks Lululemon has been delivering strong revenue growth over the past few years, with 19% comparable sales growth in FY22 and 9% in FY23.
I think the strong growth has been driven by the following factors: The overall clothing and clothing accessories market in the U.S. has been quite healthy over the past few years, as depicted in the chart below.
While the market got disrupted by supply chain during the pandemic, the market has recovered in the post-pandemic era. Bureau of Economic Analysis One of Lululemon’s key advantages is its fast product innovation, incorporating fashions into its product designs..
