$LULU Lululemon athletica Deep Dive and 2024 Outlook

The apparel maker is down on Nike earnings faltering, but is that valid?

Lululemon Athletica is a Canadian athletic apparel company founded in 1998 by Chip Wilson. The company initially focused on producing technical yoga sportswear for men and women but has since expanded to include accessories, outerwear, and a separate men's line.

Lululemon is known for its innovative fabrics, such as Luon, which is made from nylon microfibers, and its commitment to research and development in its Whitespace lab. The company's first store opened in Vancouver's Kitsilano neighborhood in 2000, to create a community gathering place for young, urban professionals and families with a taste for hip fashion and lifestyle accessories.

Lululemon's target market comprises tech-savvy, affluent women and men who prioritize healthy living and fitness. The company's customer base includes yoga lovers and people participating in various sports, such as running, cycling, and training.

Lululemon went public in 2007 and has since enjoyed incredible year-on-year growth in global net revenue, reaching over $6.2 billion in 2021. Lululemon's business model is built on a vertical retail model, where the company designs, produces and sells its products without any middlemen.

Facing controversies and challenges, Lululemon has maintained its position as a leading athletic apparel brand, with a global market cap of $34.8 billion, second only to Nike. The company's competitive advantage lies in its ability to identify and fill gaps in the market, such as the growing demand for women's sportswear.