Lululemon is acquiring more new shoppers than ever before, CEO Laurent Potdevin told CNBC’s “Squawk on the Street” Thursday morning, with many of those new customers being men.
Lululemon shares were climbing more than 7 percent in early trading, following an upbeat third-quarter earnings report after the bell Wednesday. In turn, many analysts who cover the company raised their price targets on the stock.
Same-store sales jumped 8 percent in the fiscal third quarter, outpacing analysts’ estimates and boosted by double-digit growth online. According to the athletic apparel retailer, its first-ever men’s campaign fueled a 21 percent increase in new male guests ringing up purchases during the latest quarter.
“We have so much runway in the [men’s] segment. … I have yet to see a guy try our product and say: ‘It’s not for me,'” Potdevin later explained on CNBC.
The company now expects holiday-quarter sales to reach as much as $885 million, following what were Lululemon’s greatest sales ever on Black Friday and Cyber Monday. The company also participated in Alibaba‘s recent Singles Day, which amassed record sales overseas.
Lululemon said its latest marketing initiatives have lured more customers to the brand, and shoppers have reacted favorably to new product fits and fabrics.
Potdevin said strong third-quarter results keep Lululemon on track to achieve a target of $4 billion in annual revenue in 2020. That includes $1 billion in online sales, $1 billion in international sales and $1 million in revenue from its men’s category — the remainder will stem from women’s and “innovation.”
“We are almost halfway there,” the CEO told CNBC Thursday about those goals.
Internationally, Lululemon is making a bigger push in China, where Potdevin said millennial consumers are finally looking to live healthier lifestyles, and commit to staying active.
“We are at the beginning of a movement in China,” he said. “[And] we are at the front of that movement.”
Lululemon expects to open six additional stores in Asia during the fourth quarter. By the end of 2017, the company will have opened 46 new stores overall.
“While other players in the sports and athleisure market struggle, Lululemon continues to go from strength to strength,” Kevin Wathey, a consultant with GlobalData Retail, wrote in a note to clients.
“Lululemon is still attracting new customers and is getting existing shoppers to spend more at both its stores and online,” Wathey added. “The strength of Lululemon’s bottom line is mostly thanks to its ability to resist the temptation of excessive discounting — even in a market that has become steadily more promotional.”
Lululemon shares have risen about 11 percent this year. That compares with rival Nike, which has gained more than 17 percent, and Under Armour, which has tumbled more than 50 percent over the same period.