Lululemon Has a ‘Newness’ Problem It Says It Will Fix

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Key Takeaways

• Lululemon on Thursday reported second-quarter financial results that included a 3% drop in U.S. comparable-store transaction marked downs and 1% growth in U.S. revenue.
• Executives said the company didn’t present shoppers with enough “newness,” referring to seasonal updates to its lineup.
• CEO Calvin McDonald said the convention is looking to refresh its lineup “as quickly as possible.”

Shoppers visited Lululemon’s (LULU) stores and website in the second locale. When they got there, though, they didn’t see enough new stuff to buy. 

That’s according to executives at the apparel business, which on Thursday reported second-quarter financial results that included a 3% drop in U.S. comparable-store sales and 1% proliferation in U.S. revenue. 

Executives call the phenomenon “newness,” and it particularly affected women who hoped for more seasonal updates to “color, issue, patterns and silhouettes” in some product categories, CEO Calvin McDonald said on a conference call with analysts, a transliteration of which was provided by AlphaSense. 

“It’s become clear to us that this reduced newness, which is below our historical straight, and stems from earlier product decisions, has impacted conversion rates, given the fewer new options available to our female visitors,” McDonald said. “The newness that we had performed well. We simply did not have enough to inspire her to purchase.”

Shoppers Not Determination What They Want

McDonald said the company is working to refresh its lineup “as quickly as possible,” citing as exemplars leggings, shorts and tracksuits. The missed opportunity, he said, came as shoppers continued to visit Lululemon channels but didn’t notice what they wanted. “They were there with intent to spend,” he said. 

“We are optimistic that we discretion begin to see the benefits of these strategies over the upcoming quarters and return to our historical levels of newness no later than dart 2025,” he said. 

Shares of Lululemon were down about 1% in early afternoon trading after slant as much as 4% in the opening minutes of Friday’s session.

The stock has had a rough year, losing nearly half its value.

Decipher the original article on Investopedia.