Dear Shareholders, Market Expansion remains a significant opportunity. We saw strong performance in 2022, with North America revenue growth of 29% and international revenue growth of 35%. We opened 81 net new company-operated stores during the year, ending 2022 with over 650 total stores globally. And while we continue to see growth and momentum in every market that we are in, international remains a relatively small part of the business.
Our brand continues to resonate across geographies and cultures, and we remain focused on building global brand awareness while ensuring local relevance. We continued to invest in our partnerships with elite athletes and creators who powerfully represent our brand and values, both in their communities and on the world stage. It was incredible to see our partnership with the Canadian Olympic Committee and Canadian Paralympic Committee come to life in Beijing for our first year as the Official Outfitter of Team Canada, and we look forward to our next collaboration in Paris in 2024.
Our Impact
As we continue to grow our business, we remain focused on our Impact Agenda priorities and making year-over-year progress. We believe in doing business responsibly and sustainably, and we have been successful with our three-pillar model encompassing people, communities, and planet as more consumers share our values and goals to have a positive impact in the world.
Through our Be Human pillar, we continued to deliver on our Inclusion, Diversity, Equity, and Action (IDEA) commitments, achieving our goal to increase the representation of racially diverse employees in our stores a year early1. We also broadened our inclusive design and IDEA programs, expanded our mental health first aid training to all people leaders globally, and maintained 100% gender pay equity within our entire global employee population. We have achieved full pay equity, including gender and race, in the United States. We follow local laws and regulations and where we are able to collect the data necessary to confirm complete pay equity, we do so.
Through our Be Well pillar, we celebrated one year since the launch of our lululemon Centre for Social Impact. We have invested a total of $29.4 million2 to support the wellbeing of our local and global communities, those who make our products, and humanitarian and frontline workers, positively impacting millions of people globally.
Through our Be Planet pillar, we continued our journey to be part of a circular ecosystem and minimize environmental harm. We expanded our lululemon Like New resale program to all stores within the United States to keep our products in use longer, and we were proud to be one of the lead funders in the creation of the Apparel Impact Institute’s Fashion Climate Fund, a $250 million fund to decarbonize the fashion value chain.
We recognize that lululemon has a unique opportunity, responsibility, and platform to become a more sustainable and equitable business, and we look forward to continuing to progress our Impact work in the years ahead.
In Closing
I would like to thank our lululemon teams around the world and our global collective, without whom our success would not be possible. We are proud of all that we are building together, as we continue to innovate and live into our brand purpose – to elevate human potential by helping people feel their best.
To our shareholders, we are grateful for your ongoing support and confidence in lululemon. As we continue to monitor the macro environment, we have shown our ability to deliver on our goals and drive guest loyalty through our innovative products, powerful experiences, and strategic market expansion.
We are entering 2023, which marks lululemon’s 25th anniversary, from a position of strength and we remain in the early innings of our growth. I am proud of all that we have accomplished this year and excited for the opportunities that lie ahead in 2023 and beyond.
Calvin McDonald
Chief Executive Officer
2022 was another year of strong performance for lululemon, as we grew our net revenue by 30% to over $8 billion and delivered balanced results across our channels, geographies, and categories, despite ongoing challenges in the macro environment.
Our continued momentum and success were driven by our incredible teams around the world and guided by our new five-year growth plan – the Power of Three ×2 – which we unveiled at our Analyst Day in April 2022.
Our Power of Three ×2 strategy leverages our proven Power of Three formula that has fueled our success over the past five years – Product Innovation, Guest Experience, and Market Expansion – and includes goals to once again double our men’s business, double our digital business, and quadruple our international business, while growing total revenue from $6.25 billion in 2021 to $12.5 billion by 2026.
Underpinning this strategy are our Impact Agenda priorities, with our Be Human, Be Well, and Be Planet pillars reflecting our commitment to drive positive change and lead with innovative and socially responsible practices at every step in our journey.
I am proud of our strong start to our Power of Three Ă—2 growth plan and look forward to building on our strength in 2023.
Our Differentiators
lululemon continues to benefit from consumer behaviors and trends that align with our business, including living an active and healthy lifestyle, seeking quality and versatile apparel, and connecting with inclusive communities of people focused on physical, mental, and social wellbeing.
The strength of our culture and brand is derived from our guest loyalty, which we believe is one of our most meaningful competitive advantages. As a purpose-driven organization with a vision to create transformative products and experiences that build meaningful connections, unlocking greater possibility and wellbeing for all, our guests share our values and connect with lululemon on a deeper level.
Our category has momentum, our product innovation sets us apart, and our vertical omni operating model strengthens our guest relationship and engagement with every interaction.
Our Growth Pillars
Product Innovation is the foundation of our guest relationships, grounded in our Science of Feel innovation philosophy that guides our product design and enables us to solve for unmet needs and deliver more for our guests.
In 2022, we continued to take a performance-first approach to bring new technical innovations into our merchandise assortment. We expanded our core running category with the launch of SenseKnit, a proprietary fabric technology offering zoned compression. We believe raw materials are a true differentiator for us in the market, and play an integral role in how the Science of Feel comes to life across all our activities.
We also entered new categories, including Play activities with capsule collections for golf, tennis, and hiking. The versatility of our products allows us to broaden our reach and demonstrates the effectiveness and efficiency of our business model.
We also launched our inaugural footwear collection made for women first, applying over 20 years of our product innovation and insights. Our first four styles across a variety of activities – blissfeel for running, strongfeel for training, chargefeel for hybrid workouts, and a dual-gender slide – are the beginning of an exciting test-and-learn opportunity to build into the potential of this category.
Guest Experience comes to life through our powerful omni operating model, which allows us to serve our guests both in store and online. We saw strength across both channels in 2022, with store revenue increasing 29% and e-commerce revenue growing 33%, and our biggest-ever day of traffic and revenue on Black Friday.
One of lululemon’s core strengths is harnessing the power of our guest relationships through our educators, ambassadors, and activations to build stronger connections and cultivate community across both physical and digital. In 2022, we created world-class experiences in our markets around the world, from 10K runs in Atlanta and Houston, to the Summer Sweat Games in China.
We also launched our two-tier membership program in the fall, which includes an Essentials free tier and our lululemon Studio premium tier. In the first five months of the program, we enrolled over nine million Essentials members. This summer, we will be expanding the lululemon Studio tier of the program by enabling guests to also access our digital fitness content via a new app for a lower monthly fee. We are excited about this evolved approach and the role membership will continue to play in building our community, strengthening our guest relationships, and driving long-term value.
To our shareholders, we are grateful for your ongoing support and confidence in lululemon. As we continue to monitor the macro environment, we have shown our ability to deliver on our goals and drive guest loyalty through our innovative products, powerful experiences, and strategic market expansion.
We are entering 2023, which marks lululemon’s 25th anniversary, from a position of strength and we remain in the early innings of our growth. I am proud of all that we have accomplished this year and excited for the opportunities that lie ahead in 2023 and beyond.
Calvin McDonald
Chief Executive Officer
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