Lululemon Well-Positioned Against Activewear Competitors

The Canadian activewear giant has little reason to fear upstarts like Alo Yoga and Vuori, an equity research report suggests

A new proprietary survey is bullish on Lululemon’s future, with analysts confident in the activewear giant’s longevity and ability to thwart competition from emerging brands.

While Lululemon reported a 10% revenue increase to $2.2 billion for its first quarter of fiscal 2024, brands in the activewear and athleisure sector have been facing challenges amid an unfavorable macroeconomic backdrop,

Yet in the crowded athletic apparel space, which includes emerging brands such as Alo Yoga and Vuori , analysts from William Blair see ample opportunity for Lululemon, stating in a research report that the brand can continue to improve its domestic brand awareness, narrowing the gap between its current 50+% figure versus sportswear giants Nike and Adidas, who are each above 90%.

What began in 1998 in Vancouver, Canada, as a yoga apparel company touting leggings that would provide the best fit (and an envious backside) has morphed into more than an activewear company — Lululemon has become a global status symbol of fitness and fashion-forward athleisure, with popular pants that retail for as high as $118.

Even with such a price point, the survey cited in the research report showed that Lululemon consumers come from a broader range of household income than one might expect. The survey found that 10% to 15% of respondents with household incomes under $75,000 owned Lululemon products, for example.

“Relative to Alo and Vuori, Lululemon has a clear advantage in awareness with younger consumers and with consumers with household incomes less than $100,000,” the William Blair analysts noted.

Lululemon has also surpassed Alo and Vuori in terms of brands purchased by consumers in the last six months and purchase intent for the next six months, which the analysts say suggests that Alo and Vuori have “little competitive impact” on Lululemon.

From a single standalone store in 2000, Lululemon joined the prestigious S&P 500 last fall, cementing its place as one of the world’s biggest apparel brands.

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