Lululemon Eyes $10B in Revenue as Competition Mounts

Competition is stiff in the activewear space.

Status report. Despite slowed growth, lululemon’s Q1 beat earnings and revenue expectations.

• North America sales increased just 3%, compared to 17% last year.
• International sales spiked 35%, for a total quarterly revenue gain of 10%.

Blaming US numbers on inventory issues, the company remains confident it could hit the $10B revenue mark by EOFY — but with stock down ~40% on the year, some say its reign is over.

Hoping to expand its audience, lulu has stretched into racquet sports, footwear, hiking, and golf. But, its MIRROR misstep and DEI controversies presented roadblocks.

Next in line. TBD whether lulu has peaked, but there’s no shortage of viable successors.

• Attracting influencer types, Alo is building buzz with high fashion collabs and VR classes.
• Enlisting Zendaya and FKA twigs as creative partners, On is evolving beyond runners.
• Nailing the low-key California lifestyle, Vuori will have 100 global stores by 2026.

As legacy brands like Under Armour slump. Alo and Vuori each added 1% of market share from April ’23–’24, while On saw sales rise 55% YoY.

Game plan. Following layoffs, Nike is capitalizing on surging women’s sports, with signature sneakers for WNBAers Caitlin Clark and A’ja Wilson in the pipeline.

Takeaway: There’s still a huge buffer between Nike, lulu, and challengers — but the success of activewear upstarts suggests niche opportunities abound. Companies that spot market gaps and build lifestyle brands around them can capture underserved wellness subcultures.