How Lululemon Makes Money

Lululemon makes money by designing technical athletic apparel, footwear and accessories and selling most of it directly to consumers through 825 company-operated stores (as of August 2, 2026) and its e-commerce site and app. Because it controls design, pricing and the retail checkout, it keeps the margin a wholesaler would otherwise take; gross margin was 60.5% in Q2 fiscal 2026, helped by $134.5 million of tariff refunds. Product development centres on proprietary fabrics such as Luon, Nulu and Everlux, and marketing leans on a network of local yoga, running and fitness ambassadors rather than large celebrity endorsement deals.

Lululemon's 'Power of Three x2' plan (2022) targeted doubling revenue to $12.5 billion by 2026 through growth in menswear, digital and international markets. With fiscal 2026 revenue now guided to $10.35-$10.50 billion, that target will be missed. The current priorities are faster product newness in the Americas, more marketing investment, continued international store openings (especially mainland China), and categories beyond women's yoga such as men's apparel, running and footwear, which the company entered in 2022.