There aren't commercials for guys downing victory beers after a sweaty bout of Bikram yoga... yet. But bro-ga, or yoga for men, is a growing phenomenon.
Today, more than 15 million Americans practice yoga -- and that number has grown on average by 20% annually. It's not just a chick thing: Men represent somewhere between 20-27% of yoga practitioners in the US.
LeBron James credits yoga for his stamina on the courts. Other top pros like the Baltimore Ravens' Ray Lewis, Evan Longoria, the New York Giants' Victor Cruz, and the entire New Zealand All Blacks rugby team pictured below all credit yoga for better sports performance and injury prevention.
The yoga product market in the US has grown 87% in the last five years. Not only that, but yoga appeals to people who have money to spend on gear: 44% of practitioners make over $75,000 annually and 24% make more than $100,000 a year.
In other words, there's money to be made in Broga.
Tie-ins with professional athletes could give both Nike and Under Armour a leg up in promoting their yoga apparel and attracting more bro-ga practitioners. It's such a natural way to market a new category of apparel and gear for both. But so far, nary a peep.
It's Lululemon that's got the infrastructure already in place to make broga a bona-fide thing. Its stock could certainly use the boost, given the downward dog of a year the company has had. First, a highly publicized and embarrassing see-through yoga pants recall cost the company over $17 million. Next, CEO Christine Day announced her departure which further hit the stock. Lately, complaints have been piling up about pilling on its Astro yoga pant. Founder Chip Wilson fumbled trying to explain away the pilling, managing to turn it into a PR fiasco.
Although Lululemon has menswear -- sport sweats, boxers, and shorts; there are no tight or revealing men's yoga pants -- none of it is positioned as yoga-appropriate apparel. Why not? Lululemon also features Silverescent, a proprietary anti-stink technology, in its mens and womens workout gear, an advantage over rival Under Armour's wicking sports apparel.
Lululemon is already set up to bring broga to the masses. It already offers free yoga classes at its stores. Lululemon could easily offer bro-centric classes that stress the cardio and core aspects. Some stores already offer partner yoga classes for couples.
While Lululemon's website is still predominantly female oriented, it has featured website interviews with male yoga practitioners like Olympic alpine skier Manuel Osborne-Paradis. It also reached out to guys by expanding its running, cycling, and swimming lines over the last few years.
Broga seems like a natural extension for the company.
Nike and Under Armour are busy making plays for the ladies
While Lululemon has made some initial attempts to woo the bros, Under Armour and Nike have both been beefing up their offerings for women.
Nike's yoga selection still runs a distant third to its rivals with fewer colors and selections. It basically seems to be an afterthought to its main business of athletic shoes.
Under Armour has been capitalizing on Lululemon's most recent quality issue by advertising that Under Armour yoga pants never pill. Note that the overwhelmingly masculine and competitive image of its website is considerably toned down in the pastel-hued yoga pants section.
Under Armour is also featuring sports bras built specifically for barre, yoga, pilates, and circuit training. The company is reportedly spending $250 million to advertise to women.
Which stock has the core strength?
Lululemon has been quite the grower under CEO Day's tenure. Building a hugely loyal customer base and a community of yoga aficionados with local events and those free classes helped the company grow at a five year compound annual growth rate of 36.5% for revenue and 48% for earnings per share. The company has no debt. In the second quarter same store sales rose 8% and e-commerce soared 39.4%. It has also actively addressed the supply chain problems that led to the see-through Luon yoga pants recall.
Under Armour is the most richly valued of these three with a 56.58 trailing earnings multiple compared to 36.91 for Lululemon and 25.83 for Nike. Its operating margin is also the lowest of these at 12% compared to 14% at Nike and 27% for Lululemon.
Meanwhile, Nike offers a yield of 1.10% and the stock is up 64% over the last year. Lululemon is up barely 1% and Under Armour is up 53.04%.
Who will make the first move?
Lululemon needs the bros business more than Nike or Under Armour. Luckily, Lululemon is best poised to promote bro-ga through its well-established yoga community and free classes.
Under Armour and Nike could easily take share with their pro athlete connections and advertising their athletic wear as suitable for yoga and weightlifting as Lululemon does. It seems, to their detriment, Under Armour and Nike are ignoring a growing and lucrative market.