Active apparel retailer lululemon Athletica Inc. reported its third quarter earnings and revenue that beat expectations as its online sales boomed. Its revenue rose 22% year over year to $1.12 billion for its third quarter ending Nov. 1. And its ecommerce business had a 93% year-over-year growth. Plus, its online sales accounted for 43%, or $478 million, of revenue during the third quarter.
The retailer now expects its fourth quarter revenue to grow “in the mid-to-high teens” after a Thanksgiving week that saw a “record-breaking performance” from ecommerce, said CEO Calvin McDonald in an earnings call transcribed by Seeking Alpha. That helped to offset a brick-and-mortar decline in traffic, he said.
Lululemon, No. 54 in the 2020 Digital Commerce 360 Top 1000, also has accelerated its ecommerce and omnichannel investments during the pandemic to be ready for a holiday surge.
“We have been investing in our digital capabilities and enhancing the experience of our ecommerce sites for several years, which enabled us to quickly respond to the accelerated shift to [omnichannel] this year,” McDonald said.
Still, the retailer expects store productivity to be 70% below last year’s level this quarter as governments add restrictions, such as capacity limits and mask requirements, to fight the resurgence of COVID-19 cases. About 97% of its locations are open, executives said during its earnings call.
“While the majority of our stores remain open, we have continued to see guests shift between channels, which has driven outsized growth on our ecommerce sites,” said Meghan Frank, chief financial officer for lululemon. “Our investments are paying off as our sites have demonstrated the ability to more than handle the anticipated spike in volume.”
Lululemon also has implemented five tactics to keep shoppers who want to visit its retail locations safe amid the pandemic:
- A virtual waitlist, so shoppers no longer need to physically wait in line and can be notified by text when it’s their turn to enter the store.
- Mobile point-of-sale system, which allows certain transactions such as returns, exchanges and purchasing gift cards to all occur just outside of the store.
- Buy online pick up in store and curbside pickup.
- Shopping by appointment, which can be scheduled before, during and after a store’s normal operating hours.
- Lululemon’s digital education program, which the retailer says is designed to assist shoppers who prefer to shop online. This allows shoppers to have a quick online chat or schedule an appointment for a personal or group online shopping experience.
“We pulled forward investments in our digital channel to ensure our guests continue to receive an elevated experience when shopping our sites and to maximize holiday business,” Frank said.
GameStop’s online sales skyrocket
GameStop Corp.’s third quarter sales fell 30% to $1.00 billion in the period ended Oct. 31. But ecommerce was a bright spot, growing 257% year over year. And its ecommerce penetration continues to grow and represents nearly 25% of total sales this year, up from a low single-digit percentage historically, the video game retailer reported.
“We remain very committed to our efforts to build a frictionless digital-first omnichannel ecosystem [and] our customers are responding, significantly changing the way they shop with us,” says CEO George Sherman in an earnings call transcribed by Seeking Alpha.
Additionally, ecommerce sales from GameStop’s mobile app have doubled year over year. “We are very pleased with the initial performance and look forward to rolling out additional features such as the gamer news feed and a comprehensive, easy-to-use digital wallet in early 2021,” Sherman says.
GameStop is No. 34 in the Digital Commerce 360 Top 1000.
Percentage changes may not align exactly with dollar figures due to rounding.
Bloomberg contributed to this report.Favorite