Lululemon's international sales were its saving grace this quarter
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- A bright spot on Lululemon's horizon was its robust growth in international markets.
- Its international sales increased 33% in Q3 of 2024, compared to 2% in the Americas.
- China, in particular, was a strong market for the brand this quarter.
Lululemon's robust growth in its international markets — particularly China — made up for its lackluster performance in the Americas.
The Vancouver-based activewear brand, known for selling $100 yoga pants, reported strong third-quarter sales in its stores abroad, with its international sales increasing 33% from a year ago.
CEO Calvin McDonald said on the Thursday earnings call that internationally, "momentum remains strong in all of our markets as we continue to see great acceptance of the Lululemon brand across the globe."
In mainland China, the company's net revenue increased 39% year-over-year, and comparable sales increased by 27%. China's net revenue was $318.3 million, compared to $228.6 million a year ago.
In its international markets outside China, Lululemon's net revenue increased 27% to $307.9 million, with comparable sales increasing 23% compared to the year before.
Lululemon now has 749 company-operated stores globally, compared to 686 the year before. This quarter, it opened six new stores in mainland China.
International growth has been a boon for Lululemon this year.
In August, the company reported second-quarter China net revenue of $314.2 million — up 34% from Q2 in 2023.
In this latest quarter, Lululemon said that its brand aligned with "Healthy China 2030," the Chinese government's plan for health and development.
Closer to home, its sales in the Americas fell flat, continuing last quarter's little annual growth. Its Americas net revenue increased by 2% to $1.8 billion. Comparable sales decreased by 2%.
The company expects to open 40 new stores in 2024, some of which will be in mainland China.
"And then, on the success of some of the markets with our franchise model, we'll be opening Denmark, Belgium, Turkey, and Czech Republic through our franchise model and partnerships," McDonald said on Thursday.
Representatives of Lululemon did not respond to BI's query, sent outside regular business hours, asking how many new outlets will be opened in China in 2024.
Martin Roll, a global business strategist and senior advisor at consulting giant McKinsey, told BI earlier this week that Lululemon's success in China could be attributed to the trend of consumers focusing on health and wellness in tough economic times.
"China is kind of waking up in terms of health," Roll said to BI, adding that consumers are catching up with health habits like yoga, gym, and physical welfare that North American consumers have followed for the last two decades.
Lululemon's stock price rose 9% in after-hours trading after it released its Q3 earnings. The company is down more than 30% this year.