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This Could Be Lululemon's Next Big Growth Driver

lululemon may not have a significant men's presence to compete with Under Armour and Nike, but its ivivva girls' stores are performing well,

Lululemon's ivivva athletica store in Edmonton, Canada. Image source: lululemon.

It seems an understatement to say shareholders of lululemon athletica (NASDAQ: LULU  )  had a rough year in 2013.

Even as the market's broader indexes roared to new all-time highs, Lululemon stock fell by around 20% last year thanks to the extended fallout from a massive recall in March, an unexpected resignation announcement by its CEO in June, and some less-than-savory comments from founder Chip Wilson in November.

But now things are looking up for the yoga apparel specialist, which not only just hired a promising new CEO last month, but is also working to streamline its supply chain going forward.

What's more, notes the Fool's Steve Symington in the following video, Lululemon still managed to grow its top line by 20% year over year last quarter thanks to a combination of strong e-commerce sales, new locations, and decent 5% comparable-store sales growth.

Best of all, Steve says, somewhat hidden in Lululemon's results was the outstanding performance of its new "little sister" brand, ivivva athletica, which focuses on activewear for girls. Specifically, ivivva outlets achieved solid 17% comparable-store sales growth in Q3, which is why Lululemon is planning on increasing the brand's new location roll-out in the coming year.

To get Steve's full take on how ivivva could prove to be Lululemon's next big growth driver, check out the video below.

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Read/Post Comments (1) | Recommend This Article (3)

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  • Report this Comment On January 04, 2014, at 5:02 PM, leobowdyo1 wrote:

    just goes to show you that women will spend an absorbent amount of money on things like hairstyle/makeup and yes yoga pants...

    apparently this is now the new big fad for girls..100 dollar yoga pants just to be popular...

    and lulu lemon is laughing all the way to the bank..

    Yet they laugh at men who wear sensible shorts bought at kmart for 10 bucks and we actually work out in them

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Steve Symington

Technology and consumer goods specialist for the Fool. Steve looks for responsible businesses which positively shape our lives. Then, he invests accordingly. Enjoy his work? Connect with him on Twitter & Facebook so you don't miss a thing.

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8/28/2015 1:00 PM
LULU $62.82 Up +0.18 +0.29%
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