Virtua Weekly: Keeping You Informed on Industry News and Insights

Welcome back to Virtua Weekly, where we break down the biggest stories emerging from the sports, fashion & outdoor industries each week!

Here's what you need to know:

1. lululemon reports strong Q2 and expects to double revenues by 2026??

Calvin McDonald, Chief Executive Officer, stated: "Our Q2 results highlight the ongoing strength of the business amid a dynamic operating environment. I am proud of how our teams continue to deliver on our vision and offer an exciting pipeline of new products and experiences to our guests around the world. Our continued ability to gain market share and bring new customers into the brand illustrates the significant runway ahead for lululemon ."

For the second quarter of 2023, compared to the second quarter of 2022:

• Net revenue increased 18% to $2.2 billion, or increased 20% on a constant dollar basis. Net revenue increased 11% in North America, and increased 52% internationally.
• Total comparable sales increased 11%, or 13% on a constant dollar basis. Comparable store sales increased 7%, or 9% on a constant dollar basis. Direct to consumer net revenue increased 15%, or 17% on a constant dollar basis.
• Direct to consumer net revenue represented 40% of total net revenue compared to 42% for the second quarter of 2022.
• Gross profit increased 23% to $1.3 billion and gross margin increased 230 basis points to 58.8%.
• Income from operations increased 19% to $479.3 million. Adjusted income from operations increased 23%.
• Operating margin increased 20 basis points to 21.7%. Adjusted operating margin increased 80 basis points.2023 OutlookFor the third quarter of 2023, the Company expects net revenue to be in the range of $2.165 billion to $2.190 billion, representing growth of 17% to 18%. For 2023, the Company expects net revenue to be in the range of $9.510 billion to $9.570 billion, representing growth of 17% to 18%. Power of Three ×2The Company's Power of Three ×2 growth plan calls for a doubling of the business from 2021 net revenue of $6.25 billion to $12.5 billion by 2026. The key pillars of the plan are product innovation, guest experience, and market expansion and the growth strategy includes a plan to double men's, double direct to consumer, and quadruple international net revenue relative to 2021.

1. New Era Cap Prepares for IPO

New Era Cap , a provider of headwear for prominent U.S. sports leagues, has initiated the groundwork for an upcoming initial public offering (IPO) in New York. Sources familiar with the situation suggest that this IPO could potentially assess the company's value at approximately $4 billion to $5 billion.

New Era, which makes caps affiliated with the National Football League (NFL) , Major League Baseball (MLB) and National Basketball Association (NBA) , has invited investment banks and law firms to pitch this month for roles in its stock market debut.

The company, which is controlled by its founding family and in which private equity firm ACON Investments, L.L.C. holds a significant minority stake, aims to go public in 2024, the sources said. MLB, the NFL and the NBA hold minority stakes in New Era.

The company's earnings before interest, taxes, depreciation and amortization (EBITDA) may reach or surpass $300 million in 2023.

Kevin R. Wilson, executive vice president and chief financial officer of New Era, said the company "is always considering alternatives to position the company financially for future growth, but we have no strategic plans to share at this time. We don’t comment on speculation.”

1. Rapha poaches Robert Lee from Adidas as new Chief Creative Officer

Leading cycling clothing brand Rapha has appointed Robert Lee as Chief Creative Officer, with immediate effect.

Lee boasts a remarkable track record in the sports industry, amassing more than twenty years of experience. His most recent role was at 阿迪达斯 , where he served as the VP of Creative Direction for Training and Sportswear, in addition to his position as Creative Director for the U.S.

Furthermore, Lee held the position of VP of Design at Adidas Group/ Reebok International for an impressive eleven-year tenure from 1997 to 2008. He also held the role of Design Director for Reebok between 2002 and 2005.

In his new role at Rapha, Lee will lead the product and brand creative teams, while also being responsible for contributing to the brand strategy, “dreaming up a new future for Rapha and the sport of cycling.”

Francois Convercey, CEO of Rapha, said:“We are truly excited to have Rob join us as Rapha’s Chief Creative Officer. Creativity and design have been central to the Rapha brand since its inception, and Rob will bring his passion for product, culture, and his own rider’s perspective to help us continue to inspire the world to live life by bike.

Lee commented:?“I’m honoured to be part of an iconic cycling brand that has led the industry in sport and culture. As an active cyclist and endurance racer I will be able to apply my experience of working with athletes and leading product and brand expression for some of the biggest brands.”

1. Tommy Hilfiger names Virginia Ritchie as new global CMO

Tommy Hilfiger , the American fashion label, has named Virginia Ritchie as its Global Chief Marketing Officer. In this capacity, she will be reporting to Martijn Hagman, who serves as the CEO of Tommy Hilfiger Global and PVH EMEA. Her responsibilities will encompass the supervision of all facets of the global marketing department.

Ritchie, a 13-year veteran of PVH Corp. most recently led global consumer engagement for Tommy Hilfiger with the responsibility to bring the brand’s campaigns, activations, and products to life for consumers across all marketing and commercial touch points.

Ritchie brings over 15 years of experience across all aspects of global marketing strategy, consumer engagement, full-funnel media, and communications, as well as developing culturally relevant, cut-through talent partnerships, collaborations, and campaign creative.

“Virginia is an experienced and respected brand leader within our organisation. Over the last 13 years with PVH, she has developed a deep understanding of the Tommy Hilfiger brand DNA and has been a champion for the transformations and evolutions that keep Tommy Hilfiger aspirational and relevant for our consumers. Virginia’s leadership will help us win with the consumer by leaning into the many strengths of our global Tommy Hilfiger brand,” said Hagman.

1. Amer Sports Files Confidentially to Go Public

Amer Sports , the company that owns Salomon , Wilson Sporting Goods Co. , Arc'teryx Equipment , and other sports brands, has discreetly submitted an application for an initial public offering (IPO) in the United States. This IPO has the potential to assess the entire group's worth at up to $10 billion. This move coincides with Amer Sports experiencing rapid expansion, particularly driven by the success of Arc’teryx and Salomon, along with significant growth in the Chinese market.

Amer Sports, headquartered in Finland and backed by China’s ANTA Sports Products Ltd / ADR . The IPO speculation comes as Amer Sports hired Andrew Page, former CFO for Foot Locker, as group CFO and a member of its executive committee in April. Page reports to James Zheng, who replaced Heikki Takala as Amer Sports’ CEO in October 2020. Zheng had been executive director and president of Anta.

After acquiring Amer Sports in 2019, Anta set an ambitious goal to grow its three biggest brands—Arc’teryx, Salomon and Wilson—to “billion euro brands” over the next five years under a “Big Brands, Big Channels, Big Countries” growth plan. The growth of the brands particularly emphasized footwear and apparel categories.

China was a major opportunity under Amer’s five-year growth plan as Anta, which primarily makes sneakers and activewear, aims to capitalize on the country’s growing middle class and expanding interest in sports. Amer was expected to tap into Anta’s extensive distribution infrastructure to fuel growth in China.

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