Lululemon enters the sneaker realm

Lululemon announced the launch of women’s sneakers earlier this month.


Business Wire/Associated Press

Leggings leader Lululemon LULU 9.58%

enters the category of women’s shoes. Does it come in for the right reasons?

Much like other sportswear brands — including Nike and Adidas — Lululemon shares have lost ground this year as investors worried about supply chain issues and a potential slump in consumer demand as inflation drives up the cost of everything. Still, Lululemon’s announcement that it would be launching a women’s sneaker in early March seemed to have wowed investors. Its shares are up 7.5% over the past month, outperforming Nike and Adidas, which are each up about 2%.

Footwear has lower margins compared to apparel, so entry into this market for Lululemon, which is more profitable than its athletic peers, could be a mixed bag. Its gross margin of 57.7% last fiscal year was closer to that of luxury conglomerate Kering, which owns Balenciaga and Gucci, than Nike’s 46%.

Some investors might take Lululemon’s entry into a new category as a red flag if it’s an indicator that the company sees limited growth opportunities in its core business. Its entry into the fitness equipment business in 2020 — through its acquisition of Mirror — has proved unconvincing so far. But the company’s results, released late Tuesday, seem to indicate that Lululemon’s foray into the footwear industry is more of an offensive than a defensive move.

After posting 42% sales growth for the fiscal year ended Jan. 30, Lululemon expects sales to grow 20% to 22% this fiscal year — a much healthier pace than the 15.6% average Wall Street analysts were estimating. Lululemon expects much of that growth to come from its core apparel business. Its shares gained 7.7% in after-hours trading after the earnings were announced. Megan Frank, Lululemon’s chief financial officer, said that footwear will be a “test-and-learn” category and will make up a small part of the business in 2022.

Lululemon could be well positioned to gain a foothold in this category if it can delight its loyal customer base. According to data from the NPD Group, women who shopped at Lululemon spent 30% of their total activewear purchases there in the fiscal year ended January. Fabletics, Under Armor and Adidas each account for less than 10% of these customers’ activewear purchases, according to the NPD.

A question for the future will be whether Lululemon is trying to do too much at once. In addition to shoes, it is launching its first tennis collection this week and a golf collection next week. It will also juggle 70 net new store openings in 2022 – a faster than normal pace.

Baby steps might be the right pace for his new shoe store.

write to Jinjoo Lee at

Copyright ©2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the print edition of March 31, 2022. Lululemon enters the sneaker realm

Ari Notis is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – The content will be deleted within 24 hours.

Related Articles

Back to top button