Lululemon has smashed analysts’ expectations over its third quarter thanks to a dramatic rise in online sales, which now account for over 40 per cent of its total revenue.
The athleisure giant saw sales rise 22 per cent during its third fiscal quarter to $1.1 billion, comfortably above analysts’ estimates of $1.01 billion
Gross profits for the quarter jumped 24 per cent to $627.4 million and its gross margin rose 100 basis points to 56.1 per cent.
Lululemon, which has been forced to close much of its physical store estate intermittently throughout the year, said this boost in sales was largely due to a significant rise in online sales.
Its online operations accounted for 43 per cent of sales during the quarter for the first time, thanks to an increased investment in its ecommerce platform in preparation for the holiday season.
Furthermore, the retailer said its direct-to-consumer (D2C) sales, those made via its own physical and online channels rather than through third-party retailers, rose 94 per cent.
Same-store sales, which track both in-store and online sales, were still up 19 per cent despite widespread closures.
This included a 22 per cent year-on-year boost for womenswear and a 14 per cent increase for menswear.
“Our third quarter results demonstrate the strength of Lululemon across channels and markets, both in North America and around the world,” Lululemon’s chief executive Calvin McDonald said.
“Our product innovations, investments in the e-commerce business, and strategic acquisition of Mirror position us well to serve our guests as their needs evolve across both physical and digital experiences.”
GlobalData Retail Managing Director Neil Saunders added: “While a V-shaped recovery may not be materializing for most of apparel retail, Lululemon has bounced back from the weak start to its year with a stunning set of third-quarter numbers.
“Our data also show that Lululemon has picked up plenty of new shoppers, especially in womenswear.”