Why investors didn't flinch at Lululemon's growth ambitions

Lululemon thrived during the pandemic. A consumer shift to comfortwear saw its sales skyrocket and demand for its sporty wardrobe pieces soar. Perhaps that is why investors did not flinch when the Canadian retailer said it aims to double sales to 12.5 billion dollars by 2026. It was more or less already expected.

Last year at the height of global lockdowns and restrictions the company saw revenue increase 68 percent in the second quarter, of which online sales increased 66 percent. It beat expectations and exceeded the targets it had set for 2023 by the end of 2021, two years ahead of its growth plan.

Investors are bullish

Lululemon’s stock didn’t upwardly propel after news of its ambitions were laid out in a corporate press release and earnings call. Investors did not seem too impressed, noted Barrons, a respected financial news outlet.

The reason the athletic apparel retailer’s stock didn’t see a major boost is due to analysts already expecting the company to reach 11 billion dollars in sales over the next four years. According to Barron’s, investors may “view the company’s long-term targets as achievable,” and “they aren’t unexpected.”

Back in 2018 Lululemon earnings were 3.3. billion dollars, a figure it doubled over the next three years. With growth drivers focussing on its menswear, digital and international sales, it should easily achieve these bold ambitions.