This week, Lululemon stock experienced two record days. Shares rose nearly 20 percent in the past month and some analysts say it could continue to grow by an additional 10 percent.
The company has experienced incredible growth in the past year. In April 2018, Lululemon shares were trading at around $80 per share. A year later, their stock is currently sitting at $170 per share.
Growing momentum for Lululemon
The company continues to deliver strong earnings and expand its international presence. That’s why many analysts say now might be a good time to invest in Lululemon stock.
Here are a few things to watch from Lululemon in the coming year.
Lululemon will continue to grow its international presence
The company has experienced strong international growth in the past year. Their markets in Asia and Europe continue to grow at rapid rates.
In particular, company executives have noticed a great deal of interest from China. The company opened 36 stores in 2018 and many of those were located in China. This contributed to their international revenue and strong growth in the past year.
Of course, Lululemon’s international revenue is still much smaller than their revenue within the U.S. But there is a lot of room for further growth.
Lululemon continues to grow its menswear line
Traditionally, Lululemon has always been thought of as women’s activewear. However, they do have a line of menswear and it is actually growing at a faster pace.
For instance, the company’s fourth-quarter earnings showed that sales of women’s bottoms were up 21 percent. In comparison, sales of men’s bottoms were up 28 percent.
This indicates that Lululemon could become a dual-gender brand and that the men’s line could eventually perform just as well.
Strong digital sales will continue to increase revenue
Digital sales make up one-third of Lululemon’s total revenue and their digital business grew 49 percent in the past year. The company’s revenue from digital sales is one of the most profitable in the retail industry.
And the company’s strong digital presence should help fuel its international growth as well. The company also plans to launch new websites in France and Germany.
In addition to increased revenue, Lululemon has had higher-than-average cash flow growth. Year-over-year cash flow growth for the company is currently sitting at just over 38 percent. In comparison, the industry average is 5.9 percent.