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Company Overview: An Investor’s Key Guide to Lululemon Athletica

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Part 3
Company Overview: An Investor’s Key Guide to Lululemon Athletica PART 3 OF 17

Why A New Product Approach Is Vital For Lululemon

Core styles

One of the problems plaguing Lululemon Athletica (LULU) recently is the change in consumer preferences from basics to prints and colors. LULU has been focusing on getting its core product assortment right. It’s also introduced new lines incorporating prints, colors, and textures, including sequins.

Pants and tanks, which are core product categories, are on the company’s radar. The category is going to see some changes in the coming quarters. The company aims to drive “newness” in the core offering for these vital categories. Getting the price-to-value equation right for new products will also be a key goal for the company.

Why A New Product Approach Is Vital For Lululemon

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Men’s products

LULU recently opened its first men’s-only store in Soho, New York City, on Black Friday. LULU has also allotted more space for showcasing men’s products at its new Santa Monica store in California—the largest Lululemon store in the world. Since the brand mostly targets athletic women, the focus on men’s apparel looks like a promising opportunity for the company.

In contrast, LULU’s rivals NIKE (NKE) and Under Armour (UA) have a sales mix that’s currently tilted towards men’s products. Both NKE and UA are looking at women’s products as a key future growth driver. NKE and UA are part of the iShares Core S&P 500 ETF (IVV) and the iShares S&P 500 Growth (IVW).

Upcoming changes in the go-to-market calendar

One of the most important components of the product cycle is bringing products to market. The company recently hired third-party consultants to sharpen these processes. It’s planning to re-sequence its product-to-market cycle and bring it forward. By 1Q16, LULU expects to have a fully operational go-to-market calendar.

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