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China turns growth engine for Lululemon Athletica Inc in Q3

By Wang Zhuoqiong | China Daily | Updated: 2025-12-20 07:27
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Lululemon Athletica Inc's business in China emerged as one of its strongest global growth engines in the third quarter of fiscal year 2025, driven by surging demand for outerwear, successful product innovation and deeper penetration into lower-tier cities — helping to offset softer sales in the Americas.

For the quarter, Lululemon Athletica said net revenue rose 7 percent year-on-year to $2.6 billion. Revenue in the Americas declined 2 percent, while international revenue surged 33 percent.

China remained the standout. International performance was fueled by a 46 percent increase in revenue in the Chinese mainland, or 47 percent on a constant-currency basis, according to Chief Executive Officer Calvin McDonald.

The Chinese market's contribution to global revenue climbed to 18 percent, up from 13 percent a year earlier, while same-store sales rose 25 percent.

"Looking forward, we now expect revenue in the Chinese mainland to be at, or better than, the high end of our range of 20 percent to 25 percent revenue growth for the year, excluding the 53rd week," McDonald said in an earnings call. "We were really pleased with the overall results in the Chinese market."

Outerwear has emerged as a key growth driver.

McDonald said Chinese consumers responded strongly to established products such as the Wonder Puff line as well as newer innovations.

"We're definitely gaining share, gaining momentum in that marketplace," he said, adding that the brand is seeing traction across tier-1 cities and continued resonance as it expands deeper into tier-2 and tier-3 markets.

Lululemon has also been increasing its brand visibility through high-profile events and community initiatives.

At the 8th China International Import Expo in Shanghai in November, the company showcased products across six categories — yoga, running, training, tennis, golf and daily wear — reinforcing its positioning as a holistic athletic and lifestyle brand.

Store expansion remains central to the company's growth strategy.

Chief Financial Officer Meghan Frank said during the earnings call that Lululemon expects to open about 46 net new company-operated stores this year, while completing roughly 36 store optimizations. Overall square footage is projected to grow at a low double-digit rate.

Of the new openings planned for 2025, about 15 were scheduled for the Americas — nine of them in Mexico — while the majority of the remaining stores were meant for international markets, primarily China.

The company has also strengthened its local infrastructure. Starting Oct 27, Lululemon relocated its China Store Support Center to the West Bund Zhonghuan in Shanghai, fully occupying a five-storey stand-alone office building.

On Dec 12, Lululemon announced that McDonald plans to step down as CEO and member of the board, effective Jan 31, 2026.

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