Lululemon wants to double its men's and online sales over next 5 years

Lululemon released Wednesday a new, five-year growth plan, sending its shares up about 1 percent in premarket trading.

The company says it plans to double sales of its men's and online businesses, and quadruple international revenues, by 2023.

Lululemon is kicking off its investor day in New York on Wednesday, an event it hasn't held in five years and one that marks the first formal introduction of CEO Calvin McDonald to Wall Street since he assumed that leadership role in August.

"We believe Lululemon has a unique opportunity to push beyond traditional expectations to develop innovative products and become a fully experiential brand that creates compelling experiences for guests," McDonald said in a statement.

Analysts and investors are looking to see if McDonald, who joined Lululemon from cosmetics company Sephora after Laurent Potdevin was ousted as CEO amid conduct violation allegations, can keep the momentum going at the athletic apparel company.

Lululemon shares have surged more than 80% over the past 12 months, compared with the S&P 500 Retail ETF's (XRT's) growth of just 1.5%.

Key areas of focus at Lululemon of late include the expansion of its men's business, growth overseas, shaping a stronger e-commerce platform and building a base of loyal shoppers. One new initiative has been testing a new loyalty program.

Meantime, rivals Nike and Under Armour both have expressed they plan to target female shoppers more with new yoga pants and sports bras, threatening to wade into Lululemon's turf. But Lululemon, in turn, has said its men's business presents the biggest growth opportunity for the brand, moving forward. It said it's on track to get that business to $1 billion in sales, annually, by 2020. It's also getting into selling personal-care products, like deodorant, searching for other ways to lure shoppers to its stores.

In the latest fiscal year, Lululemon's sales amounted to $3.3 billion, with sales at stores open for at least 12 months surging 18%, compared with growth of 7% during the prior year.

Nike, which brought in $36.4 billion in sales globally in 2018, holds 18.3 percent of the overall U.S. sportswear market, which includes apparel and footwear, according to data compiled by Euromonitor. Adidas is second with 6 percent, Under Armour with 4.1 percent, Skechers with 2.6 percent and Lululemon with 1.9 percent as of the end of 2018, according to the firm.

In the women's athletic apparel category, though, Lululemon is just second to Nike, according to data compiled by NPD Group.

Ahead of Wednesday's meeting, a handful of analysts said they believe Lululemon will reach its revenue goal — for $4 billion by next year — ahead of schedule. Nomura Instinet analyst Simeon Siegel believes the retailer's sales can eclipse $6.5 billion by 2023.

"However, it seems either sales or margins are approaching a peak," Siegel said in a note to clients. "It seems more likely [management] works to maintain sales growth at the expense of some margin than vice versa."

This is a developing story. Please check back for updates.

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