Global challenge

A small Lululemon Athletica test boutique in Hong Kong's Soho district is helping to lay the groundwork for what Canadian yoga-wear maker sees as an avenue for growth.

The retailer is casting an eye on international markets even as it grapples with the demands of finding a new chief executive, mending a tarnished image after a recall of overly sheer pants and expanding in the United States.

It is a tricky move even in the best of times. While the rewards are alluring, such global markets can be fickle, complicated and risky.

For now, investors looking at Lululemon's largely successful track record are betting it can juggle the balls needed to maintain a lofty valuation and recapture some of its earlier growth. The stock has soared 500 per cent since the company went public in 2007.

In its latest quarterly results, revenue rose nearly 22 per cent to US$344.5 million, but the retailer said sales growth at established stores this quarter was likely to be in the mid-single digits, far removed from the days when growth could exceed 30 per cent.

The retailer may see its biggest medium-term opportunity in the US - where industry experts say the market has the capacity to handle 300 stores, doubling its current footprint - but analysts say it needs to look further afield for the long term.