Lululemon (LULU) expects a robust holiday shopping season, but the supply chain crisis remains a concern.
At Yahoo Finance’s All Markets Summit, CEO Calvin McDonald said the athletic apparel maker is using more air freight to ease bottlenecks at ports and prioritizing the manufacture of high-demand fall styles.
“We're confident we'll have the inventory to support the revenue that we've guided to, but there's definitely missed opportunity as a result of the supply chain disruptions,” McDonald said. “I wouldn't want people to think that we're satisfying every demand that we have, but the team is doing a wonderful job getting the product here to meet the guidance numbers.”
About 30% of Lululemon’s products are sourced from Vietnam, an important region for the retailer that crosses a number of product categories.
“We do a lot of dual sourcing around the globe,” said McDonald, “so there isn't one product in particular that I would say is 100% sourced in Vietnam, and we don't anticipate supply issues.” But he added, “I do think guests should shop early.”
Factories in southern Vietnam that were shuttered because of a Covid outbreak have started to reopen, which McDonald said is helping the supply situation.
Lululemon has seen explosive growth during the pandemic as shoppers stock up on its pricey jogger pants, leggings and sports bras for their stay-at-home wardrobes. McDonald said sales of its athleisure wear remain strong as consumers opt for comfortable clothing as they return to the office. It’s a trend benefiting retailers such as Lululemon, Nike (NKE), and Under Armour (UA).
The retailer is also betting on new categories to win more business. It expects to have the Mirror, its wall-mounted device for streaming workouts, in 200 of its 500 stores globally by Black Friday, and it’s on track to launch its patented sneaker line in early 2022.
“Our e-commerce grew while our stores came back to those pre-pandemic productivity numbers, so we’re very pleased with the balanced growth we're seeing, which puts us in a good position to want to recruit and hire,” McDonald said.
The retailer is looking to hire 8,000 seasonal workers as it gears up for the holiday rush.
“We are actively out recruiting like I know many are. It's harder than it has been in the past,” he said, though he believes the company is competitively positioned.
In August, Lululemon raised the minimum base pay for most employees to $15 or $17 per hour, depending on their role. A bonus system adds another $3 to $6 per hour.
Alexis Christoforous is an anchor at Yahoo Finance. Follow her on Twitter @AlexisTVNews.