Lululemon Athletica Inc. · NASDAQ:LULU
Lululemon Athletica — Investor Day (April 2019)
118 slides from Lululemon Athletica's investor day presentation, Apr 24, 2019
Slide 1: Analyst Day will start shortly
Analyst Day will start shortly Analyst Day 2019
Slide 2: Analyst Day 2019
@ Analyst Day 2019
Slide 3: Howard Tubin, Vice President of Investor Relations
Howard Tubin Vice President of Investor Relations Analyst Day 2019
Slide 4: Forward-Looking Statements
Forward-Looking Statements: This presentation includes estimates, projections, statements relating to our business plans, objectives, and expected operating results that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Se
Slide 5: Welcome
Welcome Analyst Day 2019
Slide 6: Agenda
9:35 am 10:30 am 11:00 am 11:30 am Calvin McDonald Sun Choe Celeste Burgoyne Stuart Haselden Our Five-year Plan Product Vision Omni Guest Experiences International Growth 12:00 pm LUNCH 1:30 pm 1:50 pm 2:20 pm PJ Guido Senior Leadership Team Calvin McDonald Financial Overview Q&A Closing Remarks Ana
Slide 7: Video: 2018 financial results
video Sizzle reel of 2018 financial results Analyst Day 2019
Slide 8: Calvin McDonald, Chief Executive Officer
Calvin McDonald Chief Executive Officer Analyst Day 2019
Slide 9: Immersing myself in lululemon
Immersing myself in lululemon Analyst Day 2019
Slide 10: Product innovation, guest relationship, brand loyalty, channel agility, people and culture
Product innovation Guest relationship Brand loyalty Channel agility People and culture Analyst Day 2019
Slide 11: Product innovation
Product innovation Market trend LeverageScience ofpants Feel Consumers choose Flow and breadth versatile products that enable them to live the life they want CompleteFabric assortmentinnovation Analyst Day 2019
Slide 12: Guest relationship
Guest relationship Market trend +Expand7M Guestsshare of in Maximize Consumers want wallet2018 our to participate in influencers communities with 92% people who share highGlobal value their passions communityguest retention Analyst Day 2019
Slide 13: Brand loyalty
Brand loyalty 83 Market trend BrandNet Consumers respond awarenesspromoter Coveted score events to experiences that foster and enable human connections Experiential4k loyaltyevents Analyst Day 2019
Slide 14: Channel agility
Channel agility Market trend 46% Right size Consumers expect growth China convenient digital solutions that % create personalized Digital26 digital ecosystem experiences penetration Analyst Day 2019
Slide 15: People and culture
People and culture Market trend Development- Dofocused more Consumers engage culture with authentic, 94% of purpose-driven employeesDrive brands with wouldour recommend impact lululemonagenda as strong values a great place to work Analyst Day 2019
Slide 16: Five strategic pillars
Product innovation Guest relationship Brand loyalty Channel agility People and culture Analyst Day 2019
Slide 17: Pillars and focus areas
Product innovation Guest relationship Brand loyalty Channel agility People and culture Versatility Community Experiences Digital solutions Purpose-driven brand Analyst Day 2019
Slide 18: Our amazing 2018
Ecomm comp Revenue GAAP 45% EPS growth $3.3B 90%* Total Adjusted EPS growth revenue growth 48%* 24% Our amazing 2018 * Please see page 121 for a reconciliation of non-GAAP financial metrics. Analyst Day 2019
Slide 19: Delivering on our 2020 plan early
Delivering on our 2020 plan early, looking boldly into our future
Slide 20: Early innings of our full potential
We are in the early innings of our full potential
Slide 21: Our Vision
Our Vision Be the experiential brand that ignites a community of people living the sweatlife through sweat, grow and connect
Slide 22: Sweat
Sweat The physical challenge that pushes us past our boundaries
Slide 23: Grow
Grow The practice of personal development and becoming our best selves
Slide 24: Sweat, Grow, Connect
GrowSweatConnect TheCreating practicephysical bonds of personalchallengewith others that to developmentpushesbuild something us past thatourbigger boundaries accelerates than we selfcan- aloneleadership
Slide 25: #thesweatlife
#thesweatlife
Slide 26: #thesweatlife This is lululemon
#thesweatlife This is lululemon
Slide 27: Video: Our Vision
video Our Vision Analyst Day 2019
Slide 28: Our Vision
Our Vision Be the experiential brand that ignites a community of people living the sweatlife through sweat, grow and connect Analyst Day 2019
Slide 29: The greater opportunity of the sweatlife
The greater opportunity of the sweatlife Analyst Day 2019
Slide 30: Global and North America sports apparel market
$83B NA Sports The greater Apparel Market $115B Global Sports opportunity of Apparel Market the sweatlife Source: sports apparel market Euromonitor Analyst Day 2019
Slide 31: Adjacent product categories market
$115B Global Sports Apparel Market $83B NA$630B Sports The greater Global Adjacent ApparelProduct Categories Market opportunity of the sweatlife Source: sports apparel market Euromonitor Analyst Day 2019
Slide 32: Personal care and beauty market
$630B Global Adjacent Product Categories $115B Global Sports Apparel Market $83B NA Sports The greater Apparel Market $3T opportunity of Global Wellness Market the sweatlife Source: personal care + beauty market AND sports footwear combined; personal care + beauty market global alone is $500B Euromo
Slide 33: Global wellness market
$3T Global Wellness Market $630B Global Adjacent Product Categories $115B Global Sports Apparel Market $83B NA Sports The greater Apparel Market opportunity of the sweatlife Source: global wellness institute Analyst Day 2019
Slide 34: Our five-year growth plan
Our five-year growth plan Analyst Day 2019
Slide 35: Financial summary: next five years
Financial summary Next five years 2018 - 2023 Revenue Gross margin SG&A EPS growth expansion leverage growth (CAGR) (Annual) (Annual) Modest Modest > Revenue Low teens expansion leverage growth Analyst Day 2019
Slide 36: The Power of Three
The Power of Three
Slide 37: The Power of Three
The Power of Three Innovative products Omni guest experiences Expand markets Analyst Day 2019
Slide 38: The Power of Three: double
The Power of Three double Innovative products Omni guest experiences Expand markets Analyst Day 2019
Slide 39: The Power of Three: Digital double
The Power of Three Digital: double Innovative products Omni guest experiences Expand markets Analyst Day 2019
Slide 40: The Power of Three: International quadruple
The Power of Three International: quadruple Innovative products Omni guest experiences Expand markets Analyst Day 2019
Slide 41: The Power of Three: targets
The Power of Three Digital: International: double double quadruple Innovative products Omni guest experiences Expand markets Analyst Day 2019
Slide 42: The Power of Three and financial summary
The Power of Three Digital: International: double double quadruple Revenue Gross margin SG&A EPS growth expansion leverage growth (CAGR) (Annual) (Annual) Modest Modest > Revenue Low teens expansion leverage growth Analyst Day 2019
Slide 43: Whitespace, innovations, storytellers, talent
Powerful Whitespace Great Winning momentum innovations storytellers on talent Analyst Day 2019
Slide 44: The full potential of lululemon
The full potential of lululemon Analyst Day 2019
Slide 45: Leadership team
Leadership team Analyst Day 2019
Slide 46: Leadership team
Celeste Burgoyne Sun Choe EVP, Americas & Stuart Haselden PJ Guido Chief Product Officer Global Guest Innovation COO & EVP, International Chief Financial Officer Analyst Day 2019
Slide 47: Q & A
Q & A Analyst Day 2019
Slide 48: Slide 48
Slide 49: Video: Science of Feel
video Science of Feel Analyst Day 2019
Slide 50: Sun Choe, Chief Product Officer
Sun Choe Chief Product Officer Analyst Day 2019
Slide 51: Innovating through Science of Feel
Innovating through Science of Feel Delivering new sensory experiences for our guests Analyst Day 2019
Slide 52: Infusing Science of Feel beyond yoga
Infusing Science of Feel to serve guests living the sweatlife Expand beyond yoga Analyst Day 2019
Slide 53: Grow share of wallet by solving unmet needs
Grow share of wallet by solving unmet needs for our guests Analyst Day 2019
Slide 54: Doubling our men's business in five years
@ Doubling our men’s business in the next five years Continue to extend reach into men’s, with categories for mindful athletes Analyst Day 209
Slide 55: Collaborations and Lab
Extending our reach through collaborations and Lab Designed to inspire and attract new and current guests 2018 2019 Royal Opera House SoulCycle Robert Geller Analyst Day 2019
Slide 56: Building on success in accessories
Continuing to build upon success in accessories Demonstrating the elasticity of our brand Analyst Day 2019
Slide 57: New category growth opportunities
New category growth opportunities Creating functional solves for the sweatlife Analyst Day 2019
Slide 58: Analyst Day 2019
Analyst Day 2019
Slide 59: Slide 59
Slide 60: Celeste Burgoyne, EVP Americas & Global Guest Innovation
Celeste Burgoyne EVP, Americas & Global Guest Innovation Analyst Day 2019
Slide 61: Growth runway remains strong in North America
Growth runway remains strong in North America 349 $2.9B Stores* $1.9B 321 Stores* 2015 2018 *company-operatedAnalyst lululemon Day stores 2019
Slide 62: Omni guest experience
Physical Digital Community Omni guest experience Seasonal Local
Slide 63: Agile retail concepts
Our physical growth is fueled by our agile retail concepts Seasonal Local Mainline Co-located Analyst Day 2019
Slide 64: Agile retail concepts: e-commerce
Our physical growth is fueled by our agile retail concepts Seasonal Co-located Analyst Day 2019 Core e-commerce experience
Slide 65: Doubling our digital growth
Doubling our digital growth Core e-commerce experience Growing the assortment Transactional omni Analyst Day 2019 Global Yoga Ambassador
Slide 66: Community is at the heart of who we are
Community is at the heart of who we are Global Yoga Ambassador Global Run Ambassador Global Elite Ambassador Charlie Dark Chelsea Jackson Nick Roberts Foles Analyst Day 2019
Slide 67: Deepening our guest experience across channels
Deepening our guest experience across channels Analyst Day 2019
Slide 68: Membership, experiential stores, events
Membership Experiential stores Events Pushing the boundaries with our omni guest experience
Slide 69: An experiential guest membership program
An experiential guest membership program Analyst Day 2019
Slide 70: A unique experiential store environment
A truly unique experiential store environment Analyst Day 2019
Slide 71: Creating experiential events across our communities
Creating experiential events across our communities Analyst Day 2019
Slide 72: Our Vision
Our Vision Be the experiential brand that ignites a community of people living the sweatlife through sweat, grow and connect Analyst Day 2019
Slide 73: Slide 73
Slide 74: Stuart Haselden, COO & EVP International
Stuart Haselden COO & EVP, International Analyst Day 2019
Slide 75: Video: China Community
video China Community Analyst Day 2019
Slide 76: International growth phases
International Global Balanced Emerging Acceleration: Growth: Global Brand: Reaching Region & Growing Inflection Channel Awareness
Slide 77: Accelerating track record
Accelerating track record +40% CAGR $360M ASIA 434 EMEA Stores 721 Stores $135M ANZ 3136 Stores 2015 2018 Analyst Day 2019
Slide 78: International focus and 2023 goal
International market Focus 2023 goal Our ambitions $115B* Sports • Key Geographies >30% CAGR apparel market • Omni-Channel Expansion • Product Innovation • Brand & Community *Source: Euromonitor Investments
Slide 79: Key geographies: China acceleration
Key geographies China acceleration Deep potential 76% of urban vs % of Americans population exercises 72 772M Worlds largest online online users population 400 More than population millennials US + Canada Analyst Day 2019
Slide 80: Omni guest innovation
Omni guest innovation Physical Accelerating unit growth Regionally tailored formats Digital Key investments Regional digital marketing Omni guest innovation Technology investments Cross-channel guest engagement Analyst Day 2019
Slide 81: Product innovation: Asia fit
Product innovation Asia fit Better meeting guests needs Unlocking regional demand Regional exclusives Leveraging local talent New creative capabilities Analyst Day 2019
Slide 82: Omni guest experiences: build community
Omni guest experiences Build community Local community Events Ambassadors & Influencers Amplify digitally Social Media Owned content & platforms Digital investments Enhanced engagement CRM investments Personalization Acquisition & retention programs Analyst Day 2019
Slide 83: 2023 International >30% CAGR
2023 International >30% CAGR
Slide 84: 2023 targets: Region
2023 targets: Region 2018 Revenue 2023 Revenue $360M 4xincrease Europe China Europe China >30% CAGR ANZ Asia* ANZ Asia* * Asia, excluding China Analyst Day 2019
Slide 85: 2023 targets: Channel
2023 targets: Channel 2018 Revenue 2023 Revenue $360M 4xincrease Other Other Ecomm > % CAGR Stores Ecomm Stores 30 Analyst Day 2019
Slide 86: Profitability by region
Profitability 2018 2023 China + + Asia (Excluding China) + + ANZ + + Europe ‒ + 10% - 15% Total company earnings Analyst Day 2019
Slide 87: Slide 87
Slide 88: Lunch break
We are on a lunch break and will be back at 1:15ET Analyst Day 2019
Slide 89: Slide 89
Slide 90: Enterprise fitness
Enterprise fitness Supply chain Technology People processes Cost structure Ability to scale globally Analyst Day 2019
Slide 91: Enterprise fitness: Supply chain
Enterprise fitness: Supply chain Cost Speed Flexibility Analyst Day 2019
Slide 92: Enterprise fitness: Supply chain gross margin
Enterprise fitness: Supply chain 2023 Gross margin potential Modest improvement 2018 annually Gross margin 55.2% Segmentation Volume 680 bps DC network efficiencies 2015 improvement Gross margin 48.4% Sourcing efficiencies Segmentation Volume Analyst Day 2019
Slide 93: Enterprise fitness: Technology
Enterprise fitness: Technology Channel Product Guest Infrastructure Analyst Day 2019
Slide 94: Enterprise fitness: People processes
Enterprise fitness: People processes Organization structure planning Talent management Key people processes Analyst Day 2019
Slide 95: Enterprise fitness: Modest SG&A leverage
Enterprise fitness Modest SGA Leverage Analyst Day 2019
Slide 96: Slide 96
Slide 97: PJ Guido, Financial Overview
PJ Guido Financial Overview Analyst Day 2019
Slide 98: Financial summary: next five years
Financial summary Next five years 2018 - 2023 Revenue Gross margin SG&A Operating growth expansion leverage income (CAGR) (Annual) (Annual) improvement Low teens Modest Modest > Revenue expansion leverage growth Analyst Day 2019
Slide 99: Financial summary: EPS, square footage, capex
Financial summary Next five years 2018 - 2023 EPS Square growth Capex footage growth as % of sales (Annual) income 6-8% Low Double growth Digit Analyst Day 2019
Slide 100: Powerful business model
Powerful business model Continuous innovation Strong guest connection Multiple expansion opportunities Financial flexibility Analyst Day 2019
Slide 101: Key growth drivers: Digital and International
Digital International Key growth drivers
Slide 102: Revenue growth by product
Revenue growth by product Untapped growth with continued strength in core New categories New categories Accessories Accessories Other 9% (core) (core) 70% 20% CAGR Low double digit CAGR 2018 2023 Note: New categories includes selfcare, footwear, membership, all other Analyst Day 2019
Slide 103: Revenue growth by region
Revenue growth by region Brand resonating across the globe EMEA North America APAC EMEA APAC EMEA 2% APAC 9% North America North America 89% 30%+ CAGR LDD CAGR 2018 2023 Note: APAC includes Australia and New Zealand Analyst Day 2019
Slide 104: Revenue growth by channel
Revenue growth by channel Balanced, seamless delivery of experience and assortment Other Other Stores Ecomm Ecomm Other 9% Ecomm 26% Stores Stores 65% 20%+ CAGR LDD CAGR 2018 2023 Note: Other includes seasonal stores, outlets and strategic sales Analyst Day 2019
Slide 105: Margin expansion and increasing profitability
Margin expansion and increasing profitability 2018-2023 Leverage drivers Gross margin Modest expansion expansion Product cost Channel mix Market mix Category mix SG&A Leverage Modest leverage Fixed cost Channel mix Market mix Operating income Outpacing improvement revenue growth Analyst Day 2019
Slide 106: Capital allocation
Capital allocation Fueling the strategy Priorities Expansion Product Guest opportunities Market Channel Platforms and New stores Supply chain Strong cash flow infrastructure Renovations IT systems Share 2018 Share Repurchase $598M 2018 cash from operations $743M repurchase 2019 YTD Repurchase $164M
Slide 107: Global store footprint
Global store footprint Low double digit square footage growth EMEA China North America 2023 Mid-teens 2023 APAC annual square 40%+ annual 2023 2018 (ex. China) 2018 footage21 square15 footage HSD annual growthStores growthStores square2018 footage 2023 growth349 Stores 35%+2018 annual square55 foota
Slide 108: Compelling investment thesis
Compelling investment thesis Powerful business model Increasing profitability Multiple growth drivers Financial flexibilityAnalyst Day 2019
Slide 109: Slide 109
Slide 110: Q & A
Q & A Analyst Day 2019
Slide 111: Slide 111
Slide 112: Calvin McDonald, Chief Executive Officer
Calvin McDonald Chief Executive Officer Analyst Day 2019
Slide 113: The full potential of lululemon
The full potential of lululemon Analyst Day 2019
Slide 114: Our Vision
Our Vision Be the experiential brand that ignites a community of people living the sweatlife through sweat, grow and connect Analyst Day 2019
Slide 115: Slide 115
Slide 116: Thank you
Thank you Analyst Day 2019
Slide 117: Slide 117
Slide 118: Adjusted diluted earnings per share
Adjusted diluted earnings per share excludes the amounts recognized in connection with U.S. tax reform, the costs and related tax effects recognized in connection with the restructuring of our ivivva operations, and taxes on repatriation of foreign earnings. We believe this adjusted financial measur