The pandemic has undoubtedly had poignant effects on consumer behavior, from becoming more environmentally conscious to living healthier lifestyles. According to Lululemon LULU CEO Calvin McDonald, in terms of consumer buying habits, three primary driving factors accelerated throughout the pandemic.
I think what the pandemic did was accelerate the path that we are already on, McDonald told Yahoo Finance. And the first factor of those three are that the importance and expectation of what guests have with apparel — so I think of the versatility, the functionality, and quality of what guests are buying — definitely changed. The second and third driving factors pertained to consumer health consciousness and the way they chose to shop.
Two, people are just trying to live a healthier lifestyle. They're aware of and they sweat more and they're more conscious of the notion of well-being. Those are important factors, McDonald said. And three is how they buy, the adoption of online and willingness to do that. Lululemon currently operates more than 500 stores in 17 countries, with company-operated stores reporting advancing revenue of 142% year over year and 9% on a 2 - year compounded annual growth rate CAGR basis to $695.1 million for second-quarter fiscal 2021 in spite of industry-wide supply chain issues.
Ultimately, all of the aforementioned accelerating factors play to the strength of Lululemon, according to McDonald. He believes that it puts the company in a position to capitalize on its strengths and leverage upon the shifting needs and wants of its customers.
Looking forward, Lululemon forecasts a strong end to the year with a robust holiday shopping season expected. McDonald stated that the company currently expects around a 25% two-year CAGR for Q3.
He also spoke to Lululemon s resilience throughout the pandemic, highlighting the company s consistency in paying rent, retaining its employees and honoring purchase orders.
And I think that just puts our business in a good position with our relationships with our partners. And we're supporting them through these difficult transition periods, McDonald said. And as they come online, I think our goodwill and investment in relationships is putting us in a good position.