China Market Becomes Lululemon's Main Growth Driver, Yuan Items Marked Up to Thousand Yuan Selling Out

How can AI in the Chinese market become a core driver of Lululemon’s global growth?

The athletic lifestyle brand Lululemon recently released its Q4 and full-year 2025 fiscal year financial report as of February 1. The full-year net revenue increased by 5% year-over-year to $11.1 billion. Gross profit margin declined by 260 basis points to 56.6%, operating profit decreased by 12% year-over-year to $2.2 billion, and operating profit margin fell by 380 basis points to 19.9%. International revenue grew by 22% year-over-year, effectively offsetting a 1% decline in the Americas. Notably, the Chinese market’s full-year net revenue grew by 29% to $1.755 billion, increasing its share from 13% in FY2024 to 16% in FY2025. By the end of FY2025, the number of directly operated stores in China exceeded 170.

In Q4, global net revenue grew by 1% year-over-year to $3.6 billion. The Americas declined by 4%, while international business grew by 17%, with China up 24%, becoming a key support. Meghan Frank, interim Co-CEO and CFO of Lululemon, stated: “We are pleased with the Q4 global performance and earnings per share that exceeded expectations. As we begin the new fiscal year, we will continue to execute our strategic initiatives, delivering innovative products that differentiate us and continuously enhancing the brand experience. In FY2026, increasing full-price sales will be a focus, especially in North America. This will help us further strengthen brand health and create long-term value for shareholders.”

André Maestrini, interim Co-CEO, President, and Chief Commercial Officer, added: “In China, our product mix continued to receive positive feedback in Q4, with outerwear, especially the Wunder Puff™ series, performing particularly well. During the Spring Festival, we released a new Spring Festival-themed short film for 2026 and launched a limited edition series for the new year, reflecting our ongoing efforts to connect with local consumers around key cultural moments.” The first quarter of FY2026 in China maintained a positive trend, with revenue expected to grow by 25% to 30%. The brand projects about 20% growth in the Chinese market for FY2026.

Wunder Puff™ series outerwear.

In terms of product categories, women’s products achieved a 5% increase in full-year net revenue, accounting for 63%; men’s products grew by 4%, accounting for 24%; accessories and others increased by 8%, accounting for 13%. Additionally, the brand plans to open 40 to 45 new directly operated stores globally, with 25 to 30 in international markets, most of which will be in China. Previously, Lululemon announced that swimming world champion Wang Shun has officially joined as a brand ambassador. Future collaborations will include creative campaigns and offline events. The brand states that Wang Shun’s outstanding performance on the international stage and his resilient, focused athletic spirit align closely with Lululemon’s philosophy of mind-body balance and self-exploration. This partnership further strengthens the brand’s expression of sports culture in China.

Swimming world champion Wang Shun.

Recently, a hairband priced at 80 yuan released in 2023 by Lululemon became a viral sensation online, attracting consumer attention. The product sold out on the official website and other channels. The official store page shows that the branded hairband features a logo, with a trim made of 100% zinc alloy and the main material being 86% polyester and 14% spandex. Data from the Poizon app indicates that since its release in 2023, the hairband has maintained a high market premium, with early 2026 transaction prices soaring from 80 yuan to 599 yuan. The “Elf Yellow” color hairband even reached a peak market price of 999 yuan, an 11.5-fold premium. Consumers generally say the product is “very durable.” It is reported that the official retail price for Lululemon’s new hairbands in 2026 has increased to 150 yuan.

According to Southern Metropolis Daily, former CEO Calvin McDonald left Lululemon on January 31, 2026, and will remain as an advisor until March 31. During the transition, CFO Meghan Frank and Chief Commercial Officer Andre Maestrini are serving as interim co-CEOs, and a global search for a permanent CEO has been initiated. Calvin McDonald was appointed CEO on August 20, 2018, when Lululemon’s annual net revenue was $3.3 billion. He recently confirmed he will join beauty company The Wella Company, but the “CEO race” remains unresolved. The company’s largest individual shareholder and founder, Chip Wilson, continues to publicly criticize the company’s strategy and push for a board reshuffle, attracting widespread market attention.

Currently, the most discussed potential candidates for CEO are interim co-CEOs Meghan Frank and André Maestrini, as well as Jane Nielsen, an executive from Ralph Lauren. Alongside the earnings report, a major personnel appointment was announced: Lululemon appointed Chip Bergh, former President and CEO of Levi Strauss & Co., as a board member. Bergh will stand for election at the 2026 shareholder meeting. Prior to this, founder Chip Wilson nominated three industry veterans—former Co-CEO of On Running Marc Maurer, former ESPN Chief Marketing Officer Laura Gentile, and former CEO of video game publisher Activision Eric Hirshberg—to join the board, all of whom will participate in the shareholder vote.

Facing pressure from declining profitability and a slowdown in North America, Lululemon has initiated adjustments, prioritizing the return of full-price sales growth in North America through product innovation and SKU rationalization. Before the new CEO takes office, the company will enter a transitional period. Ahead of the earnings release, the company announced plans to expand into six new markets in 2026: India, Greece, Austria, Poland, Hungary, and Romania—its largest single-year expansion in new countries. This will be driven through a new franchising partnership model. For FY2026, Lululemon expects net revenue between $11.35 billion and $11.5 billion, representing a growth of approximately 2% to 4%.

Southern Metropolis Daily N Video Reporter Wang Xin