Whereas Lululemon’s development slows in North America, gross sales are selecting up in China.
On Wednesday, Lululemon reported a 34% year-over-year leap in second-quarter income for Mainland China, to $314.2 million, with a 21% improve in same-store gross sales.
China made up 13% of the corporate’s whole income, in contrast with 11% in the identical quarter of the earlier 12 months. The athleisure powerhouse opened 5 new shops in China within the quarter.
The corporate had 127 shops in China in the beginning of the 12 months and 438 shops within the US and Canada, per its annual report.
In distinction, Lululemon reported sluggish efficiency in North America, with internet income rising simply 1%, to $1.7 billion. The area’s share of the corporate’s whole income fell to 73%, from 78% a 12 months in the past, but it surely stays Lululemon’s largest market.
The corporate reported that same-store gross sales within the US and Canada declined by 3% from the earlier 12 months, and it opened one internet new retailer within the area final quarter.
Lululemon’s sturdy efficiency in China comes because the nation’s retail recovers in pockets of the economy, with a 2.7% year-over-year improve in retail gross sales in July that surpassed expectations. This development was pushed by a resurgence in shopper confidence and spending, significantly on-line, aided by occasions just like the 618 Online Shopping Festival.
Final month, Lululemon confronted backlash within the US market after pulling its new “Breezethrough” leggings from cabinets resulting from buyer complaints concerning the design. Buyers criticized the leggings for his or her unflattering deep V seam and poor match.
Julie Zeveloff West/Enterprise Insider
The launch was a “test-and-learn” expertise, mentioned CEO Calvin McDonald on a Thursday name with analysts. He additionally mentioned that the corporate plans to reintroduce the material subsequent 12 months.
The “Breezethrough” pants saga was harking back to one other yoga pants blunder in 2013, by which the corporate’s yoga pants have been too sheer and led to recollects. However this 12 months’s Breezethrough launch had a much less extreme influence than the sheer pants, wrote Tom Nikic, a Wedbush Securities analyst, in a be aware cited by Bloomberg.
Lululemon’s McDonald additionally mentioned the Breezethrough concern was “negligible” for the corporate’s second-quarter efficiency.
The athleisure firm reported total income of $2.37 billion within the second quarter, a 7% improve in comparison with the identical interval final 12 months.
