Though trends have shown athleisure declining in prominence among American consumers, Lululemon is defying the downward trend.
Lululemon beat estimates in its latest quarterly earnings report, with revenue increasing 13% to $581.1 million ($567.79 million analysts).
That signals that athleisure isn’t dead yet – but poor results from other apparel sellers prove its buyers are becoming pickier.
“They are very intentional,” Lululemon CEO Laurent Potdevin told CNBC on Friday, of the customers shopping Lululemon. “They want brands that have purpose.”‘
For Potdevin, the call that athleisure is dead is “a misinterpretation in what’s going on and how people want to live their lives,” he said on CNBC.
There are still more people than ever living more active lifestyles according to Potdevin, who called that trend “timeless.”
Lululemon targets this core customer with innovative products, like the new best seller in the women’s bra category, the Enlite bra – which retails for $98, the Potdevin revealed on Thursday’s earnings call. The Enlite uses a different, lighter fabric, and is designed to offer stronger shaping than the average sports bra.
“[Lululemon’s] unique brand positioning and fashionable product offering have allowed it to dominate the North American athletic yoga apparel category,” Morgan Stanley analysts wrote in a note to investors.
Though competition remains fierce in the athletic apparel market, that competition exists mainly on the budget and mid-priced section of the market, which Lululemon does not compete with in its premium positioning.
This allows it to “sidestep the clear Athletic carnage plaguing the channel,” according to analyst at Normura Instinet.
“We’re on a very different playground,” Potdevin told the CNBC anchor when asked if Amazon poses a threat to Lululemon’s business.
Potdevin said Lululemon’s stellar quarter were all driven by increases in the international market, a boost to online sales, and an increase in the men’s business, which Jefferies analyst Randal Konik (via CNBC) said is on its way to becoming a billion dollar business for the company.