Lululemon Athletica’s latest partnership with the National Football League could be more than just a marketing play.
It could mark the brand’s reputation as a global sportswear brand which is far from the women’s athleisure company it started off as, according to a senior equity analyst.
“It’s another move by Lululemon to really get more involved in the sportswear space,” David Swartz, senior equity analyst at Morningstar Research Services, told BNN Bloomberg on Tuesday.
The Vancouver-based retailer announced a collaboration with the NFL and Fanatics Inc. to launch a new line of licensed gear for all 32 teams.
It’s Lululemon’s first officially licensed NFL collection.
Last year, the company collaborated with the NHL, releasing a collection that included 11 teams. It extended that collection to 32 teams earlier this month.
“People are underestimating the real opportunities that are ahead of Lululemon,” said Swartz, also calling the stock ‘undervalued’.
Swartz said his fair-estimate for the stock is US$295 per share.
Lululemon’s stock jumped about 4.9 per cent to $186.91 at its peak after the NFL partnership announcement on Monday, before settling around 1.8 per cent higher at $181.39 by the close.
More women interested in sports
Women’s interest in sports is growing, and this collaboration is a good for the brand, Jessica Ramirez, co founder and managing director of The Consumer Collective told BNN Bloomberg.
She referred to the The Kansas City Chiefs’ fan base, which went from 50 per cent female to 57 per cent female.
Kansas City Chiefs tight end Travis Kelce, right, is congratulated by Taylor Swift as they celebrate the Chiefs victory over the Buffalo Bills in the AFC Championship NFL football game, Jan. 26, 2025, in Kansas City, Mo. (AP Photo/Charlie Riedel, Fil...Kansas City Chiefs tight end Travis Kelce, right, is congratulated by Taylor Swift as they celebrate the Chiefs victory over the Buffalo Bills in the AFC Championship NFL football game, Jan. 26, 2025, in Kansas City, Mo. (AP Photo/Charlie Riedel, File)
The team’s owner shared the numbers this summer, attributing the increase in female fan base to singer Taylor Swift’s relationship with football tight end Travis Kelce.
Competing with the big brands
Swartz said this partnership helps Lululemon position itself alongside names like Nike and Adidas which dominate traditional sportswear.
He said while the new NFL line won’t dramatically shift revenue on its own, collaborations broaden the company’s reach, especially among men and new demographics.
Swartz said the company has already made its mark as a sportswear brand in recent years by sponsoring athletes and signing partnerships.
Now, it’s an $11 billion company that is attracting different demographics and also drastically expanding its men’s business.
Lululemon menA man is shown in Lululemon Athletica men's wear. (Provided / Lululemon)
“I think a lot of people don’t really realize how large Lululemon men’s business is now, even though it’s been around for quite a few years,” said Swartz
“People don’t necessarily see Lululemon as a sports brand, but this will change that.”
He pointed to footwear and wholesale partnerships as untapped growth areas to reach more consumers.
“Footwear drives the sportswear market,” said Swartz.
There needs to be more innovation
Ramirez said she’s concerned there won’t be much innovation in the products after the partnership with the NFL. She said Lululemon would need to ramp up its product assortment for this deal to succeed.
She said the company is doing well with the partnerships on its rewards and lifestyle program which has been the bulk of its business, but also where it is lagging behind. She said China is a strong market for Lululemon, where they are doing well by being more localized and focusing on the customer experience.
“I think if there isn’t enough newness in their assortment that is truly going to captivate the consumer who is new and is coming into the brand, then it will not be that sticky
She said if the company brings in new customers with a core product, it should be able to keep those customers.
“I think that’s really where the test is going to be,” said Ramirez.
Most of the company’s growth is international
Swartz said most of Lululemon’s growth is international as it continues to open stores in China and Western Europe, where the brand is lesser known.
Shoppers tour by a Starbuck cafe and a Lululemon store inside a shopping mall, in Beijing, Thursday, April 10, 2025. (AP Photo/Andy Wong)Shoppers tour by a Starbuck cafe and a Lululemon store inside a shopping mall, in Beijing, Thursday, April 10, 2025. (AP Photo/Andy Wong)
“It is a very large market, and it’s the number two market now for sportswear in the world, behind only the U.S. And so there is an opportunity there,” said Swartz adding that the brand’s opportunities extend to Asia and other parts of the world.
“I think this is one of the reasons why Lululemon is undervalued,” said Swartz.