Guys, we appreciate you being here. Obviously, we are really excited to present to you our five-year vision today. We're happy you can make it here in person. Thank you for joining on the webcast, if you can be here in person. We'll get started in a couple of minutes. I'm just gonna give you the logistics for the day, and then we'll kick it off. We've got two sessions planned for you today, a morning session and an afternoon session. We're trying to get you guys out of here by 2:30, quarter to 3:00. That's sort of the plan for the day. Let's just get this out of the way first. Okay. You all saw it? It doesn't wanna Okay, good.
Let's get this out of the way. If you have to go to the restroom, you go out that door and you make a right, and you go down the hall to the right of the elevators. Now the content. Calvin's going to kick it off in a couple of minutes. He's going to take you through our five-year vision. After Calvin comes up, Sun Choe, our Chief Product Officer, will come up and take you through our product vision and talk to you about our innovation. After Sun, Celeste Burgoyne, our EVP of Americas and Global Guest Innovation, will take you through our opportunities in North America and our omni-guest experience. Then we've got Stuart Haselden, our COO and EVP International. He will come up and take you through our international opportunity.
After that, we will take a break for lunch. Lunch is going to be downstairs in the room where the product activations were. We will go down one flight of stairs. It will be casual. We will have members of our senior team down there, so you can chat with them during lunch. Lunch will be about an hour. We would love you to be back in your seats up here at 1:10, so we can start the afternoon session. The afternoon session, Stuart will come back, kick it off, take you through our enterprise fitness. Patrick Guido, our CFO, will take you through all the numbers that I am sure you are waiting to hear. After that, we will do a little Q&A, then Calvin will wrap the day up.
Like I said, we'll have you guys out of here by a quarter of, by quarter to three. We are gonna get started. We're gonna show you a quick video, highlights from 2018, and then Calvin will take the stage.
[audio distortion] See you later.
Okay. Morning, everyone. How did you find that morning? It's always good to start off with product, isn't it? I thought the team did a great job. We really wanted to showcase for you, our approach to innovation, Science of Feel, which I know I and Sun Choe will talk a little bit more. Share a little bit into Tom's world and the White space and what they've been up to. With Woody, some of the exciting pinnacle product that the team's bringing in that just adds a little bit of that sizzle to the overall assortment that we offer our guests.
I know as a leadership team, we're super excited to have everybody here today, the opportunity to share what we've been co-creating for the last few months and set the course for the next five years. What I wanted to start off is really it's now been almost nine months since I joined Lululemon, I've been traveling to countries, to markets, really getting out and wanting to learn the culture of this incredible organization. With that is really meeting individuals, being curious, finding out what's on their minds, and sharing, quite frankly, what's on my mind. In those discussions, really helping to sort of collaborate and solidify the opportunities as we think about our future.
The one word that just kept resonating for me in almost every interaction in any market I went into was the opportunity that still rests ahead for Lululemon in both North America, in any international market, in our stores, across the entire organization. It really was exciting to just think of where we are, where we've come from, the momentum we have in the business, yet the opportunity that lies ahead. What I wanted to do today is kick off and really share some of the thoughts that I accumulated along that journey. What are the strengths of Lululemon and what are the opportunities?
Now, I'm not going to talk to you about the strengths of Lululemon in great detail because everybody in this room well-versed on what has driven the success. There are a few that I want to highlight that I think were unique and interesting to me from being a guest of Lululemon for 20 years to then joining the organization and being on the inside and really gaining an appreciation for how we do things and the magic, if you like, behind what the guest sees. I will take a moment to pause and share a bit of those. Really, I wanna talk about the opportunities that are setting up how we're thinking and moving forward. Initially, I'll talk about product innovation, guest relationship, brand loyalty, our channel agility, and the people and culture within Lululemon.
From a product innovation perspective, there are really two exciting strengths, that differentiate us from almost anybody else within this space. The first you heard a little bit about that this morning, and I would say you probably heard it for the first time because although it has been our approach to how we've innovated, and that is through the Science of Feel. That is really thinking of the connection of mind and body and how what the athlete wears, how that plays with how they feel. Depending upon what activity they are doing, how they wanna feel is very different. How we can innovate into that, be it either through temperature, movement, touch, is really critical and very unique.
I think a really differentiated point of view of how we are thinking about not just the fabrics, the touch in which those fabrics provide the athlete, and then combined with our unique function and aesthetic, is a big part of the strength and what drives the product and obviously what the guest responds and resonates with. The other is our approach to fabric innovation. Now, similar to other industries, technology being one that's probably similar to this, we are constantly building and ideating and innovating off of the platforms of the fabrics we have today.
Meaning, we are already working on version 3.0 for fabric that is on a garment today that is responding well and knowing that we wanna continue to bring even further innovation, further touch to, again, the Science of Feel, how we want that fabric to perform for the athlete. If you think of over the 20 years, where the business started with Luon and where we are today, I mean, that incredible fabric that gave birth and started, you know, Lululemon 20 years ago, today has been almost completely replaced with new fabrications, be it Nulu, Nulux, or Everlux. Why? It's because we are constantly thinking and ideating and bringing out new versions.
The benefit to that is even with the success that we have in our women's bottoms, the reason they continue to sell and continue to sell year in and year out is because we are bringing new innovation that's encouraging and giving reason for the guest to replace, to continue to buy and engage in that very important and powerful item that we have within our women's assortment because we are constantly innovating and pushing it forward. The areas of opportunity that we have around our product innovation is as powerful as our women's bottoms are using that as an anchorage. We know that that is the number 1 vehicle in which we see new guest acquisition. We know it's the number 1 item that our loyal guests love to continue to connect and then buy year in and year out.
When you look at that and then think about the ratios that we have of our bottoms to our tops or to other items in which that guest that's loyal to Lululemon purchases throughout the year within their wardrobe, throughout their sweat activity, we have an opportunity to drive more, leveraging that relationship into other areas of their wardrobe. Our assortment. You heard today, we are always going to be rooted in athletic wear. We are athletes designing for athletes, and our technical performance is what we are focused on and how we want to deliver solutions, and performance will always be in trend. However, when you think of the three key categories that Sun talked about, be yoga, train, and run, we have opportunity to round out that assortment. We're good in run, we're not great in run.
If you're a runner in the room, there is product, if you love Lululemon, that you can't get from us today. The opportunity the team has dialed in is we can round out that assortment. We have you hooked on one garment. How do we get you hooked on other garments? How do we continue to build upon the fact that Lululemon is the destination for not just yoga, where we have a strong positioning today and will continue to innovate and see continued ways in which we can improve both what we offer today and round out that assortment. As we get into train, as we get into run, as we look at other sweat activities in which our loyal guests do, how do we make sure that we have the assortment for them?
We know they love the brand, they love the unique point of view we have through Science of Feel. Let's make sure that we have the full assortment for how they choose to sweat today. Big opportunity, obviously men's is included in that. The final opportunity is how we flow and showcase the breadth of our assortments today. We know that the guest is highly engaged. I'll share those numbers with you. There are certain categories like outerwear that guests shop differently. They wanna understand the full breadth of assortment. They want to be able to showcase and see it to make that buying decision. When they make that buying decision is very different on a seasonal basis in some others.
How we today flow our product, how we today represent and showcase the incredible assortment that the merchants and the designers have put together is an opportunity that we have as we wanna continue to look at expanding and building our business in these key critical categories where we've seen success. We know we can be more successful, flow and breadth in showcasing that is a big opportunity for us to do that. When we just step back and look, well, what's happening in the market around us, right? We know what our strengths are, we know what our opportunities are. What's happening in the industry, what's exciting is that we know the market trend of consumers choosing versatile products that enable them to live the life that they want to live plays right into who we are as a brand. Designed for, used for, right?
We have very versatile product. We have product that can cross sweat activities to and from the studio. Lots of opportunity building upon our strengths and playing to the trend that's happening in the marketplace, and therefore resonating with the guests as they look to a brand that delivers upon what they're looking for. Secondly, guest relationships. Last year, we had over 7 million guests shop Lululemon. Shop Lululemon. These are active guests shopping within the year. We have a 92% high-value guest retention. Now, a high-value guest retention are our top 20% spenders. Our guests that spend the top 20% have a 92% engagement. That is very high. When you compare that to other brands, that is very high.
What that tells you is our most loyals are incredibly loyal. The opportunity for us to build upon that, to continue to nurture those relationships, and as you think about what I just talked on product, to build on that retention and that loyalty engagement is a big, exciting opportunity. In our communities, a huge strength of ours. We have over 2,000 ambassadors around the globe. We have over 15,000 legacy ambassadors. As you know, typical ambassador program is a two-year journey with us. We maintain those relationships. 17,000. We have over 12,000 educators that are anchoring our community. This is where that guest relationship truly comes to life, connected. Big strength of ours.
When we look at opportunities, as much as we have a highly engaged, loyal guest, we're excited about the opportunity that we can do even more to expand that share of wallet. A lot of that goes back to the product that we offer today, the assortment, the range, and the ability that when our loyal guest who loves the brand, who loves us potentially because they do practice yoga and/or another activity, how do we build upon that? Our global community. I mentioned we have 2,000 ambassadors, 15,000 legacy ambassadors, and they have been built at the grassroot level, which is so cool. It's so authentic.
The opportunity to take that and build upon it and build it up also to a global community, leveraging our global ambassadors, but also connecting, leveraging the world of digital so that that community that I know within my local store is also connected to that global community across the total Lululemon universe is a huge opportunity for us. Which leads to the next opportunity, which is therefore, how do we really maximize the power that these individuals have to influence the guests, to influence the fact that they play a part in product design and innovation. They play a part in living and wearing Lululemon to sweat in, and they have a point of view on product, and they have a point of view on a lot of what Lululemon stands for.
How do we make sure that building on that global community and giving them a voice, that is a huge opportunity for us to scale that we think is truly unique and differentiates us from so many others. When you step back and look at, well, what's the trend that's happening in the marketplace, we know that consumers want to participate in communities with people who share their passions. Again, this is a trend that's happening. It works well, and I think really resonates and connects with who Lululemon is, what our strengths are, and equally, what our opportunities are to do even more in and around that. Brand loyalty. We have a very strong net promoter score with our guests of 83.
Big piece of that is obviously driven through the connection that they have with the educators, but also through the fact that, yes, they connect, yes, they love to come into our retail environment and channel, but we've been a company that has hosted and created events that really brings the soul of the brand to life and allows our guests to interact with us in a way in which they can't interact with most other brands, an intimacy, a kinship with those that share equal values. We host over 4,000 events on an annual basis. That's a combination from the pinnacle event that you've seen at SeaWheeze to getting into some of our 5K, 10K races that we've been hosting, getting into our virtual run races that we put on in Strava, which I think is so cool and unique.
It's also the local events that are happening at the store level. Being able to pop in on a Sunday for either meditation or yoga that our educators are putting on. A number of these really driving and translating into that brand loyalty. Even with that, the opportunities we have is our brand awareness. In particular with men. We have very low brand awareness with men. The opportunity to just be known, and therefore to have them consider us, to choose us, to see the product and the assortments that we offer them for their needs within both sweat and to and from is significant. Also brand awareness, also being understood. Who is Lululemon? What does it stand for? Why is it different? What does it mean by the Science of Feel? And why i s it the right brand for me?
Huge opportunity and exciting for us to build upon obviously where we are today, which is a large pool of guests that have a big net promoter score, that are highly engaged and love the brand. Experiential loyalty. We're late to the loyalty game. Probably one of the last large retailers that don't have, and we're not gonna show up to the party with a discount card. We've talked about that, and we've been testing and piloting. One of our big opportunities when we think about where we wanna go, how do we bring in a loyalty program that is unique and different, is really thinking of loyalty through the lens of an experiential loyalty program. That it builds upon the brand, that it builds upon this notion of community, that it pulls people together and adds loyalty to the brand. Really exciting.
Finally, the notion of events. We run 4,000. We run a ton of exciting events. How do we host and think about running more coveted events across more markets, and have it broad enough that it really captures both the Sweatlife activity, but the mindful activity and the whole human that you heard Tom talk about, which is a trend that's happening in the marketplace. We know that through SeaWheeze, which sells out in hours, or our 5K, 10K that sell out in hours. When we host them, we offer both yoga, we offer both immersions, and mindful meditation, then into the activity of the 5K and the 10K and have a celebration, that guests love the balance of what that is, we are well-positioned to offer and do more of those.
By offering and doing those, combined with experiential loyalty, not only is it gonna drive our awareness, but the opportunity is to drive that love and loyalty to Lululemon in general, and do it in a way that is so unique and different. 'Cause you're not buying it, you're truly creating it in a sincere, authentic way. What's happening in the industry around loyalty is consumers are responding to experiences that foster and enable human connections. Again, that's the trend that's happening. Exciting is that trend completely resonates and is at the center of what we do well and the opportunity that we have to do even more.
Channel agility. We have over 46% international revenue growth last year. We have a 26% digital penetration. Our store base is incredibly agile, from seasonal stores to the size up to some of the stores that you'll be hearing about that we're testing and learning. We have the ability to penetrate markets. We have the ability to grow both physical and online retail, and to take our brand and to take our position, to take our position of what Lululemon is into other markets and see that it's resonating and is doing, you know, well from a performance basis is incredibly exciting. We have opportunity.
A lot of the assortment that you've seen today, how we think of our store size, and rightsizing the stores so that we both maintain the productivity of the doors, maintain the economics of the doors, but show the breadth of the assortment and create the experience that we want that is supporting the overall positioning of the brand is an opportunity for us. Our digital ecosystem. We are doing incredibly well online. Danny, Celeste and the team, a fantastic job building the foundation. You'll hear more from her later on what we're continuing.
The opportunity is, and we know that, to bring the soul and the feel that you have within the store, this notion of connection to the educator and the community, how do we bring that to our online community and create an ecosystem that's not just connected to the store and not just through the flow of goods, through buy online pickup in store. Yes, we're testing. Yes, we're going to roll that out. What I'm talking about in terms of an opportunity is to really connect and create a connection between what makes Lululemon different and how our digital app and our digital online site creates that universe. China being a big opportunity for us. A huge opportunity, Stuart will talk more about that. Again, strength, really exciting opportunities.
When we look to the market, what is the trend that's happening? Consumers are expecting convenient digital solutions that create personalized experiences. Where we are in digital is well-positioned. Where we wanna go and the ability of our brand to speak to the guest in a broader way than just a transactional relationship, that we can have an emotional relationship with them, that we can leverage this to bring the brand of Lululemon to life and the connection to the community and everything we're doing is super exciting and it fits completely with the trend that's happening and how they're interacting and using the device to interact with brands. Finally, people and culture. One of our strengths is we do obsess and are focused on developing people within our culture.
It's one of the reasons why employees come to Lululemon. It is one of the main reasons why people stay at Lululemon. It's one of the things that really differentiates this culture and our investment in our people and our teams beyond what most others do. It's why in an internal employee survey score, 94% of employees would recommend Lululemon as a great place to work. We respect and appreciate the culture that we have, the engagement that we have in our employees, and you just gotta walk into our stores and know that that vibe, that feeling, and that authenticity is very different than most other retailers. In retail, it's not easy to create. It's done through, you know, a true, sincere focus and investment in culture. With that, we know we can do more.
The opportunities are always for us. We know it's one of our greatest strengths. We're gonna continue to invest in it. We're proud of what we achieved last year with pay equity in 2018. We're proud of what we launched this year around parenthood, taking leadership position in the industry, but we know we can do more. The opportunity is for us to just continue to think about how do we lead the industry in creating and nurturing the culture that we know builds, supports the brand, and drives the performance. As well as our impact agenda. Impact being how we view both social and sustainability efforts within the organization. We're proud of the work we've done around Here to Be on our social side of the business. We know we can do more, and we know we can do more on sustainability. Those are exciting opportunities.
Why? Because the market trend that's happening is consumers are engaging with authentic purpose-driven brands. I believe it's why we're seeing success with a lot of Gen Zs and the young generation today, is because we are a purpose-driven brand. We do believe in having an impact greater than, and it resonates both through our educators through to our guests, but we know we can do more. When you sit back and look at all the strengths that we have, what's exciting to me is that the opportunities outnumber our strengths two to one. We have great momentum in this business. We have an opportunity to do even more, and the trends that are happening in the industry are creating that tailwind that are helping us. It's not just one trend in the industry. It's not a fashion trend.
It's not about casual Fridays that's driving this business. What's driving this business is a multiple number of trends that are core to how guests and consumers are thinking and choosing brands today. There's multiple that line up with who we are in an authentic way, that tap into who we are as strengths. Also, we are well aware of the opportunities we have to continue to fuel that path going forward. When we look at our 2018, it was an incredible year. Great results. Balanced growth across multiple levers. Very healthy new guest acquisition. Very healthy loyal guest interaction in driving growth. Healthy across all channels, healthy across all markets, healthy across all categories. The business is balanced coming out of a very incredible year. I think that's a reflection.
When we look to the opportunities ahead, we're not just dependent on one driver of growth, one market of growth. It's diverse, it's balanced. A lot is resonating, most is resonating, and w e see huge opportunity to continue to drive and build that forward. In addition, to start 2019, we're very happy with the results and momentum that we're seeing in the business. We'll share more with you in June when we share our quarter one results. Coming out of 2018, we're delivering our 2020 plan early. We knew it was time for us to look boldly into our future and to reset where we wanna go. We really are in the early innings of our full potential.
Even as successful as 2018 was, even after 20 years, myself and this leadership team and the entire organization is energized with the potential ahead, energized with the opportunities of building off of our strengths, and energized with the vision that we shared and co-created as a leadership team just early this year. Shared with the entire organization back in February, which I'll now share with you today. The vision to achieve that full potential, to unleash the full potential within every one of us, which is why we do what we do. Even as an organization, how do we unlock that full potential? What we wanna create over the next five years is we will be the experiential brand that ignites a community of people living the Sweatlife through sweat, grow, and connect. What does that mean? An experiential brand.
We're not just an apparel retailer. We're not just a retailer. We have an opportunity when we think of experiences to create experience within a store, outside of the store within the community. To continue rooted in product, to deliver solutions to the guests, to deliver experiences that build upon that product, that build upon that loyalty and love, that create the connection to the community. To really ignite that community of people living what we call the Sweatlife. The Sweatlife is really that balanced approach to how people today choose to live their life, which is physical health, mental health, and the importance of connecting to those around you. We refer to that through sweat, grow, and connect. It really is a philosophy and a positioning that we see happening in the trend, that we see we are well-positioned, the brand is authentic in.
It is rooted in product, rooted in our guest loyalty and what we want to create with experiences, and creates a wonderful opportunity for growth in areas in which we can continue to innovate, develop into as an organization, and build forward as we go through to 2023 and beyond. Sweat is obviously the physical challenge that pushes us past our boundaries. That's the heritage of the brand. It has been, it always will be. It's gonna be rooted for athletes, designed by athletes. These are the activities in which our guests, we, go out and sweat every day. One of the advantages of this brand, of Lululemon, is we're versatile. Yes, we're rooted in yoga, but what we want to do is take the practice, the mindfulness within yoga to the other activities in which people sweat.
If you're a runner, and you don't do yoga, Lululemon is still the brand for you. We are really focused here on the physical activity of sweat and how that guest is choosing to have that physical challenge. Grow. Grow is the interesting emerging area of the practice of personal development, of becoming one's best self. We're seeing that through meditation. We're seeing that through mindfulness, the opportunity around restoration and recovery, rest in here for the athlete. There's a lot of opportunity for Lululemon and the brand, both through product and services, to think about how we can show up in an authentic way within this, again, to round out that notion of the Sweatlife. Thirdly, creating the bonds with others to build something bigger than we can alone. It's resonating with the trend that's happening.
It's resonating with how guests are looking to connect with others within their community today, and it's very authentic to the brand. The Sweatlife is how we've referred to it internally. We're working, we'll be bringing it sort of guest-facing in the coming months. I think instead of, you know, just talking about what is it you really mean by the Sweatlife, I thought I'd show a quick video to really help represent what do we mean by the Sweatlife, and what do we mean by Lululemon. Play the video.
When we defined and sort of co-created the vision of where we wanna go, when we look at the greater opportunity that the Sweatlife creates for us and our future, what it does do is it helps us shape not just the size of the addressable market, but also redefine in terms of the potential. It's bigger than just the apparel market, it's bigger than just the global sports apparel market. When we think of the adjacent product categories, and I'll talk about the core today, where we're expanding and what we see as new. Also it opens up some interesting other categories, be it services that we can look to, tapping into.
It's absolutely the greater opportunity of the Sweatlife is that it is a $3 trillion global marketplace in which Lululemon has an authentic point of view, an authentic voice, and an opportunity to continue to lead, continue to innovate into and represent the brand, provide guests with solutions and experiences in which they're looking to live their life. Our five-year growth plan. PJ will take you through numbers in much greater detail, but the highlights are, over the next five years, 2018-2023, or 2019-2023, you're going to see revenue growth of low teens. Gross margin expansion, modest expansion. SG&A, modest leverage and EPS growth that's greater than revenue growth. How we're gonna achieve that is we're really focused our five-year plan on what we're calling the Power of Three.
These are going to be the primary growth pillars that are driving the business, driving the focus and the clarity across the organization, and where we are investing our resources and prioritizing to achieve the growth. Three pillars are innovative products, omni guest experiences, and expand our markets. On innovative products. The elasticity of our brand opens up a lot of opportunity for us. Equally, what we know is that our core assortment, plus the assortment that we can continue to expand, offers a significant amount of opportunity. Then we have new categories that we're not even in today. What you'll hear from Sun later, when we sit and look at our innovative products, it continues to be how do we build upon our core.
How do we expand the categories that we're in today, but we know we can round out our assortment, build a stronger assortment, and drive even a greater share and then build into new. When you think of expanding categories, bras, outerwear, two great examples. What you saw from Tom in white space is a really unique, creative, exciting way in which not only as we round out our assortment, which we have been doing and the team is continuing to do, but we have the ability through the sensor to create an experience and a service in which we can connect the guest to the right bra based on the activity that she's looking to perform. That's really unique. That's taking a category that we're in today, and it is pushing it forward. It is driving even more growth out of it.
I know we talk a lot about new, what's going to be the new category. There is a ton of opportunity in our core. There is lots of opportunity in the current categories we are in to expand not just our assortment, but expand the guest experience to drive greater loyalty engagement and sales and new. With new, we are going to continue to test and learn. We are going to take a disciplined approach over the next five years to the categories that we get into, how we test and learn, how we make them part of the core, and how we continue to build out. Couple of categories that we have tested and learned from. Self-care. Tested and learned, and you will hear more, we are expanding this year. Footwear. We tested and we learned a lot on footwear.
What we learned is the guest resonates with us selling footwear. We've identified white space that we can create within the footwear category. We will be in footwear. More to come on that later this year. What's exciting when you compare these potentials and opportunities to the five-year financial model is that it is not heavily dependent on new. Our low-teen guidance for revenue is based on building up the core, building up the expand. It is not aggressive on new. As we test and learn, as we build into these categories, those will be incremental to the model that we shared with you. As the primary driver, men's business within the five year will double. Women's will still grow at low double digit.
This notion of core plus, our core is still going to grow at low double-digit, and we're going to more than double our men's business as they lead growth driver within innovative product. From an omni guest experience, we talked about the vision. Being an experiential brand, igniting a community, people living the Sweatlife. Omni guest experience is the exciting area growth pillar where that is really going to come to life. How we think of sweat, grow, and connect. How we think about innovating and building upon our communities. Experiential loyalty program. How we're thinking about experiential events and doing more of the ones we do today that are big, impactful, and really create a halo for the whole vision of Sweatlife and the brand into our experiential stores.
You'll hear more from Celeste later today about our plans behind all of those, and our new experiential store that will be opening in July. As well, you'll hear that how you bring this omni guest experience to life, how we create the vision of igniting a community will be rooted not just what we do in the physical space, but what we do within our digital space. We have continual opportunities around our foundation, even with the success we have. Celeste will share with you our plans to continue to build out the foundation as we continue to layer on innovation that's building towards supporting the vision of an omni guest experience. In that, we are excited about the growth that we have within our store business. Similar, this is core plus.
Our store channel in the next five years will grow low double digit, and digital will more than double. Similar to innovative product, what you're seeing rooted in our plan is health in our core, continual growth in our core, and then these key growth drivers, men's more than doubling, digital more than doubling, but on the base of a very healthy core that will continue to grow. Finally, we're gonna continue and focus the third growth pillar on expanding markets. What's exciting here, and what you'll hear later, is our North American business is incredibly strong, will continue to be strong, and will continue to contribute growth over the next five years. We still see significant opportunity within the North American business to drive our sales growth. Equally is the opportunity that's happening.
The video that captures the essence of our vision of the Sweatlife is happening in Europe. It's happening in Asia Pacific. It's happening in China. We are really excited about the opportunity that we have to expand into these markets, to bring that vision, to bring the brand to life in those markets. You'll hear from Stuart our plans to do that. Our goal over the next five years is to quadruple our international business. Our core North America is still gonna grow low double digit. The reasons we're sharing growth numbers with you versus penetration numbers with you is, quite frankly, our core isn't done yet. I don't wanna be held to a penetration when we wanna grow the business. Digital is gonna grow. It's gonna more than double, but the store-based business is still growing.
International is gonna quadruple, but North America is still growing low double digit. Men's is gonna double, but women's is still growing low double digit. We see both success and health in our core, as well as these three large growth drivers out of the three growth pillars that make up the Power of Three on top of, obviously the numbers that I shared with you earlier. PJ will go into greater details with you around those. I'll sort of conclude with, you know, we're really just getting started. The opportunity for our business is significant. The advantages that we have, first coming out of having powerful momentum. The benefit of having powerful momentum and the momentum we have is that, as I shared with you earlier, looking at where we got the growth in 2018, it's balanced.
It's across all levers of the business. It's across men's and women's, it's across multiple categories, digital and stores, North America and international. It's very healthy and balanced, but it's driving momentum in the business. What we can do with that momentum is it allows us to invest. Allows us to invest back into the business. We'll continue to do that. That's why we can test and learn. It's why we can figure out how and what events and which way in which we wanna build the brand loyalty and how to talk to our guests to build that share of wallet, how to leverage digital marketing. We'll continue to do that. It's the power of momentum. We have it. It's gonna allow us to continue to invest, allow us to continue to fuel, and continue to drive the top.
As well, the vision really opens up not just what we've been doing around incredible product, what we've been doing around the activities in which guests sweat, yoga, train, and run being the three critical, but rounding out the other activities in which we know our loyal guests sweat. It allows us to look at other opportunities, like the signature movement that Tom showcased of how we accelerate our bra business. Not just incredible product, but how do you create an incredible experience for the guests that's unique, different, and allows them to find something, be it a bra, that others can't connect. Think of how we can build upon that system. Or grow into meditation, restoration, recovery. These are categories that we're excited about.
Excited about how they can fit into the brand, the vision of the Sweatlife, and eventually, through test and learn, become large contributors to the overall momentum and success of the business. White space and the innovation that's happening combined with the vision is really setting us up to think about areas in which we potentially haven't leaned in as much before. All rooted in product, all rooted in sweat, designed by the athlete for the athlete through Science of Feel, but we know that athlete is looking for more. They're looking for a more balanced way in which they choose to live, and we are an authentic brand to deliver that. Great storytellers. We're not going to win and outspend the competition when it comes to marketing dollars. I don't believe we need to.
Our opportunity is less about being heard by everybody. It's being heard by the right people, but being understood. Who is Lululemon? What is it we stand for? What is it we're creating? What is the vision? Why is it right and resonates with you? That's the exciting. Being a vertically integrated retailer, we have a much bigger opportunity of how we leverage that, leverage the guest relationship, leverage our community, become better storytellers. The role that ambassadors play in supporting our product launches. The role in which our events play in supporting our product launches. The role in which our stores play, our digital play.
Across all levers we have, we will cut through by becoming better storytellers, by leveraging the strengths we have to be understood, to showcase and present the products that we launch through the vision that we have of igniting that community in the Sweatlife. They're not independent. They're completely dependent. They're completely built upon each other. Those experiences are there to accelerate the awareness of product. They're there to accelerate the sales of product, the performance of product. Finally, winning on talent. This is an ambitious, exciting vision. It's gonna require talented people. We have talented people inside the organization. It's something that we know we're gonna continue to focus on. We're gonna build it by first developing the talent within, being leaders and how we develop leaders and their skill sets.
Building a culture in which people wanna work with and for, and hence have unmatched retention. Then the halo of creating something that is just so cool and special that people wanna join and the talent wants to come to you. We are gonna continue to win on talent, and we'll never take our eye off the importance that it plays in the formula of creating a vision that is truly unique and separate from what everyone else is doing. In doing that, obviously, you know, we believe we will be on our path to achieving the full potential of Lululemon. Later today, you're gonna hear from the leadership team. As I said, we've been in co-creation for the last few months. Well, quite frankly, you know, nine months since I've joined.
They've been incredible partners for me along my learning journey. They've been incredible partners of getting in the kitchen and co-creating and really setting the five-year vision that we have for the organization of which we shared back in February. You're gonna hear from them today on the Power of Three and the Three Growth. At the end, you'll have the opportunity for Q&A. With that, I wanted to open up an opportunity for some direct questions now if anybody has in the room for, I think, 10 minutes or so.
Can you talk about product design? How a lot more designers.
Yeah. I think one of the competitive advantages is simply the fact that, and you had the opportunity to meet, you know, Ben today, is that the design team is made up of athletes that are wired and focused on creating solutions through technical apparel. That to me is a distinct advantage just simply by the very nature of the people that we have. I equally feel that under Sun's leadership, having both the design as well as the merchants under her leadership, is a distinct advantage for us because it allows us to gain the alignment on what is it we're innovating against the strategy than against how we're trying to bring it to market. Typical pipeline for us is two years plus or minus a few months.
If we wanna take a strong position on a particular pinnacle, call it run, having that alignment in working with Sun Choe across both designers and the merchants allows those teams to be well coordinated along that journey. When that opportunity comes, we've brought solutions that are disruptive and unique to the marketplace. I'll let Sun Choe talk to if there is sort of ratios of, you know, sort of design to merchant. I would tell you that, you know, equally are important within our mix. The synergies of them together are, you know, working well in us building out the new innovative product strategy.
Footwear, is that gonna be something?
I don't wanna say too much on footwear. You know, we learned a lot through the collaboration and the partnership. We learned that, as I said, guests are engaged in the category within our environment. We learned that we can showroom footwear and do well in terms of sales and performance. We believe we've identified an opportunity that will be unique to us and unique within the marketplace. We are looking to do it ourselves, and we'll share more at a later date. Paul.
Hey. Is it on?
Yeah.
Okay. When you think about the five-year plan that you laid out, curious to hear your thoughts about what's the lowest hanging fruit. What are the low, you know, the low-hanging fruit pieces of the puzzle? Which parts of the five-year plan do you think you're gonna have to work a little bit harder to achieve those numbers that you laid out?
That's great. Bringing the tape with me, kind of created a tail. I think when I think of some of the low-hanging fruit, a lot of them are rooted in the opportunities that I shared. In that we already have credibility with the guest. They're already buying a particular category for us, but we haven't yet fully rounded out. We have an intent with the guest. Run to me is a good example. We're good, we're not great in run. What we know is that, you know, many of our loyal guests consider us for their run needs. As soon as we start filling those needs with assortment, those are pretty quick, you know, sales opportunities.
You know, we haven't up to this point had a split short in our, in our assortment. You know, you can't. You know, that is a big opportunity within run. Some of our men's run tops aren't the best performing if you're going out for a long run in terms of how they perform, 'cause they haven't been designed for that. Ben and the team are doing a great job designing into it. I think one of the there are many of the ones that I sort of identified.
I think just the fact that we're in their consideration wheel, and they're buying part of the category, and it's a large category, and we haven't yet filled out the needs that they have, that filling out those needs are some real sort of immediate opportunities for us to see. Then I think the areas that are going to be more interesting, is just when you get into the newness and the white space. You know, self-care, is a category in which we've tested and we've learned. We believe there's an opportunity around athletic needs in the beauty space that we can create. We know that when you build a position and you're building a brand, it's gonna take time.
I think the shift of the vision and really connecting it to the store base as well as our digital are the areas in which we have to wire it, which is the challenge to do. I think it's really more the new areas are probably the things that Just 'cause it's unknown. The good thing is it's not anchored in the financial model. We haven't depended on any of it for us to achieve what we want to achieve.
Calvin, over here. How you doing? My question is on international. Pretty remarkable, quadrupling expectations. As you think about what you know about your high-value customers in North America, are there attributes that you see in those loyal customers that are starting to emerge in those international markets? Are you able to distinguish what that data set looks like to leverage and get that customer sooner up the brand awareness ramp process so that you can actually get to those numbers that you're laying out?
That's a great question. A couple of things. We're definitely taking approach, which is our brand is 20 years young in North America. Where the guest is on that journey in understanding Lululemon and understanding our vision of living the Sweatlife is very different than where the guest in that brand is, say, in Europe or in China. We continue to look to push. What you'll hear from Celeste is how we're pushing and leading innovation of activating the Sweatlife within North America with the intent that we will fast follow in the other markets. They will not take 20 years to get to where the brand is fully positioned. We're also letting them build, you know, along their journey based on the same way that the North American business was built, which is bottoms.
Women's bottoms continue to be the number one acquisition vehicle. We just in fact did a campaign in China on women's bottoms to kick off this year, and i t had a significant impact. A significant impact in acquiring incremental guests in overall, you know, business. I think one of the things that we've talked about as a leadership team is, how do we make sure that we're not thinking about every market through the lens of where Lululemon is today within North America? Because you may not accelerate or may not put the focus on women's bottoms to the same degree if you look through that lens. When we paused and looked differently at China and put the focus on women's bottoms to accelerate the guest acquisition, 'cause where they are in their brand journey, we saw an immediate impact.
I think they're all tracking the same. They're just at different points, and we're going to be accelerating them, but a bsolutely there's a distinct difference in how they're tracking. What's good is they're tracking similarly, just different times.
Matt, over there in the front.
Calvin, thanks on addressable market. I mean, I'm not sure but, sorry. Matt McClintock, Barclays. Calvin, thanks for bringing up addressable market. It's a question I think we all grapple with with your company. You started with the North America sports market and went to the global sports apparel market. Those tend to be highly consolidated market shares amongst a very few players, probably because of various large barriers to entry, et cetera. How do you think about consolidation of market share as you go into new areas, you know, the $3 trillion, et cetera, given that you have those strengths that allowed you to consolidate market share in the sports apparel market?
Yep. I mean, I think it's definitely a lot less concentrated. I think we have an opportunity to continue with the size, a dominant healthy share within the apparel addressable market. What I want to make sure is in the vision, everything begins with product. It's what we do, it's what we're creating, and how we activate it. The benefit of the vision of people living the Sweatlife is they're living that Sweatlife through our product, and they're living it through events we're hosting it. They're living it through, you know, grow activities and how they choose. That will continue to be those first $83 billion in North America will continue to be sort of the primary area that we build upon, we see a lot of opportunity and will focus on.
As we build out, I don't see significant concentration, and I think we will learn to figure out if there's a particular area that we can really lean in and do much more in terms of market share. It really is early in terms of, you know, what is our opportunity in recovery and restoration? We're having those discussions. We think it's pretty exciting. When you look to even define that within the marketplace, it's so new, it's very hard to define. The fact that, you know, I have confidence that it fits in with our vision. We're in the work in our white space innovation. It is decentralized. It is shaping as we see it, that we have an opportunity of carving out, you know, share.
As we look at the other peripheral opportunities, I'm less driven about share right now as just what is the right opportunity? How does it resonate with the vision? How does it resonate with our guest, and how do we grow that share of wallet and loyalty? I mean, that's really the driver behind a lot of these. Then share will be what it will be because outside of the apparel business, 'cause I think it's very decentralized at this point and emerging as we see it. We're really thinking of it through the guest, that guest interaction and the spend that guest has with us.
Yeah. Yeah, low double digits square footage.
Wondering how you think about that in relation to the rapid growth of the digital channel, which I think you've said could represent 50% of your business over the I don't know at what point, but I think you've said that. I just wondered how you protect against what's happened to a lot of other growth retailers, which is to end up with, you know, a store base that's potentially unproductive in margin. Love to hear your thoughts there. Anything you could give us on total potential store base would also be interesting.
Yeah.
Thank you.
Interesting, but we're not, correct?
No.
I can answer. I mean, I'm just, s o I mean, you're right. Square footage growth, we've guided towards low double digit. Our store opening, we've modeled in line with what we've been opening. We haven't planned to accelerate, but we haven't planned to slow. Obviously, we have room for growth internationally, and Stuart will talk to that. China in particular, we entered this year with 15 stores in a country of 1 billion and significant opportunity. Within North America, where we're 20 years, there is still room for growth for us. I think our store counts in the 280 range. Compare that to other retailers, they have significantly more.
When we look at the productivity, when we look at, you know, the size of the market and what we can pull, I think those are conservative numbers. What you'll hear is It really is the agility of the channel. Over the next five years, what we're looking to do is continue to open at the pace we're opening at this point. Shift, continue the seasonal small store mix that we have today, which is very healthy. Allows us to get it in test markets, allows us to get in at a high productive level into smaller markets, which is very unique. Continue to expand our co-locate, so it's the medium-sized stores I think you'll see shift more to large-sized doors. That will increase a greater ratio of our store fleet come 2023.
That's where we'll have the opportunity in proven doors, where we know we've resonated and connected with the community. As we continue to build out our assortment, we want to express it in a, in a larger way. That's a pretty good bet because we're taking our medium doors, and we're shifting them to larger. We're gonna be introducing our true experiential door. You'll hear about Lincoln Park in Chicago. We've modeled that to be about 10% of the fleet by 2023. These are all open to, you know, performances. If the experiential doors are as strong as we believe they are, we'll choose to accelerate them.
If we continue to see great response to our broadening of the assortments as we round out Run, Yoga, Train, and some of the pinnacle product that you saw, Lab, then we can accelerate that. That's the current plan, current store, that square foot growth, and that's how we'll see the shift within. In the health, I think that is still a very healthy number of physical space versus our digital space. I think what makes our brand unique is the connection between the physical and the digital. That is our vision. Yes, you can interact and purchase Lululemon online, but there's a reason to go to the store that's beyond just purchasing and transactional. In most others that struggle and suffer, that's not the case. We see these building together, and think there will always be reason to interact with both.
We still have room for growth before there's any real concern.
That's all the time we have for Q&A right now, but we'll do more at the end of the day. Now we'll move on to Sun.
Okay. I think Sun's coming up next, but before she does, I am to introduce a video about the Science of Feel. Thanks, everyone.
Hi, guys. Good morning. It was a pleasure walking most of you through at least at a very high level, Science of Feel, as well as what our White Space team has been up to and our take and collaborations in lab. What I'd like to do in the next 25 minutes is really go and take a bit of a deeper dive into our product strategies for 2019. Earlier today, we walked you through at a higher level what Science of Feel is and how it comes to life through the lens of activity. What I wanna share a little bit deeper now is talk about why we have the confidence that this proprietary take on innovation will continue to fuel the growth for us across men's, women's, accessories, as well as new ventures.
A few years ago, when we launched the pant wall, we observed that our guests were either sizing up or sizing down to change how they were feeling in our existing styles. What that uncovered for us was that our guests were looking for something they couldn't articulate, but they were showing us through their actions that they were looking for new sensory experiences that they weren't currently getting from us. They sized down when they wanted to feel a little more free or relaxed. They sized, a ctually, they sized up when they wanted to feel relaxed or free. They sized down when they wanted to feel a little more compressed. What this led us to is intentionally engineering new sensations for our guests.
We offered never experienced before materials like Luon in our Align tight, where a guest could feel like she was wearing everything she needed and nothing at all at the same time. It's really no coincidence that the expression of Science of Feel in our pant business has created a trajectory in our women's bottoms business that is responsible for delivering significant growth in 2018. What's really exciting for us as we look at the future growth opportunities for Lululemon is the commercial success of Science of Feel. It's not just our innovation philosophy. It is actually something that we feel is commercially very viable in the future as we take it across categories into activities.
Moving into activities, most of the times we've been talking to you guys a lot about our category growth, really growing and expanding into bras, expanding into women's, expanding into outerwear, as well as expanding into men's. For the first time, you're really starting to hear us talk more intentionally about moving into activities beyond yoga, and again, really infusing the innovation of Science of Feel into these activities. I would also say, too, the opportunity for us inside the activities is because we were so much more category-focused, we might have developed a great run tight for our female guests, but we didn't really offer necessarily the perfect top to wear with it. What you'll start to see us do more is really outfitting against the activity.
We really wanna service him and her really in a full head to toe across run, train, as well as yoga. Moving into women's, we know that while it's the biggest piece of our current business, we feel like there's still a really long runway. We know there's a ton of opportunity in category expansions. Women's pants, probably the most commercially successful for us, really having driven a ton of growth. Most of that business has been in close to body and tights and really in pursuit of sweaty activities. Where we see opportunity is really expanding upon the fit portfolio, so really distorting and going after joggers, wide legs, away from body silhouettes, as well as continuing to really innovate on fabric.
We have a really rich pipeline to make sure that we are continuing to develop new sensory experiences for our guests based on the insights that we see in the market and insights that we receive both from our guests as well as our white space. One cool thing that we're gonna be leveraging, I know we talked a bit about this engineering sensations, whether it's someone wanting to feel naked or someone wanting to feel more hugged in. We've actually developed a technology that we're calling SenseKnit. It's gonna be coming out the back half of this year. The cool thing about this is, even within one item, we are able to engineer different sensations in that one item.
Rather than feeling naked all over or feeling held in all over, we're actually able to engineer places where you might want to feel more free and areas of your body where you might want to feel more held in, depending on the activity that our guests participate in. Really cool innovation from us and really taking that idea of engineering sensation to a whole new level. Going into activities, really wanting to claim activities outside of yoga. As I mentioned before, using the idea of Science of Feel, we really feel like between outfitting and really solving for distinctive touch, thermal comfort and embracing movement, there's just a lot of runway here, but beyond just the category growth that we've talked to you about in previous years. Moving into bras, really exciting growth category for us.
We know that there is a ton of unmet needs that we are uniquely qualified to solve. Tom had walked you through earlier this morning around the thinking on signature movement and really being able to personalize a women's breast movement. What we found when we launched the Enlite bra is that most of the competitors are really developing bras, particularly for high support that really stops motion, which creates a discomfort when you're actually not participating in an activity. What we've done with this bra is really engineered it so that even when she's not in motion, it still creates a great deal of comfort for her and also providing a much more comfortable held-in sensation for her. The cool thing on us really expanding the high support portfolio.
Currently, I would say today in our bra business, we're most famous for strappy back details, and I think there's a reason for that. It's because our roots are in yoga, so you don't need as much support when you're doing something that has a little low impact. I'd say we're famous in strappy back details really for low to medium support. You'll see us, especially with the back half of this year, really starting to grow and expand our range of high support bras, which again goes to support the idea that we wanna go after other activities beyond run and claim or yoga and claim run and train as something that we really wanna play to win in.
The other thing that we've noticed, in terms of guest behavior when she's shopping for bras is that when she does buy a high support bra from us, she's more likely to have a repeat purchase. We're really excited that by expanding into high support bras, we'll really be able to increase the loyalty from our guests in terms of this category. I would say, we're still in the early innings of really intentionally figuring out how to apply Science of Feel into this category. We feel like we're really close to unlocking this, and at some point in the future, we boldly feel that our bras will be as big as our pants. Into outerwear and OTC, again, this really is aimed squarely at growing wallet share with our guests.
We believe we have a really unique point of view in outerwear, really expanding the assortment across whether it's office travel commute or run or train. We also feel like we have a proprietary point of view on this. Using the Science of Feel, we know that in order to actually protect guests from the elements, sometimes there's a discomfort that comes with that. I mean, I'm sure you guys have all experienced when you have your coat on in the winter, you get into the car to drive, the first thing you do is take that coat off because it restricts the movement while you're driving.
Really trying to solve for that so that we can make sure that we're creating raw materials, fabrics, constructions to really move with the guest and create a comfort that may sometimes come at the cost of protection from the elements. Secondly, we're gonna be doing all of these things without ever losing sight of the fact that we believe our guests really come to us for the combination of both a really great-looking outerwear, but also being able to provide those great functional solves. Finally, going into the OTC category, office travel commute, which we touched on a little earlier. We know that men's has been really able to drive a lot of success in this end use, and it really is about when you look at the Sweatlife in totality, it is about life on the go.
He and she is definitely moving from the studio to the office, office back to the studio, and we believe that through the Science of Feel, there are a lot of unmet needs and compromises that our guests have to make. We feel that we will be able to help unlock what those compromises are and really unlock a new incremental end use for our guests, and thereby, you know, continuing to see some growth opportunities within the women's line. Really leveraging the learnings in men's because they've definitely been much further along in this category. We believe that that's something that we can take advantage of.
You'll start to see us really going after it more intentionally at the back half of 2019, and then it'll be a really big curtains up in 2020 where we'll be offering a little more well-rounded assortment, and again, really infusing the intel and philosophy from Science of Feel. Going into men's. You heard Calvin talk a bit about this earlier. I mean, really, our aim is to double our men's business in the next five years. It is one of our three, most important growth drivers and pillars. Here, what we really wanna be able to do is focus on guest acquisition and brand awareness.
We feel like in this space, we don't have enough guys that really know Lululemon to be a brand for them, and really trying to get over the idea that Lululemon is a women's brand. You'll see us entering into partnerships and creating a lot of activations that really speak to guys. As well, really excited to expand on a lot of new launches. I'd say 2018 was a great growth year for men's, but it was largely off the backs of franchises that have been existing. If you think about ABC, if you think about our big three shorts and our Metal Vent, that really was primarily what drove the men's business in 2018. 2019, we feel like it's a great inflection year for us because we have a ton of newness really in the pipeline.
The first one which, we touched on this morning, Ben and I, is creating and launching a new run franchise called Fast and Free in men's. It really is the notion of men wanting to feel fast, yet free when they're running. It also has a lot of thermal regulation properties and creating some pinnacle products within that with the split shorts and some singlets. As well, we're really actively going after train as an activity, really building durable fabrics that while it's durable so that it can, it won't abrade while you're doing deadlifts or weightlifting, it also has a flexibility to the fabric so that it can still really embrace the range of moments or movements that the guy is making while he's doing his CrossFit workouts.
The exciting thing about License to Train in particular is it does create a net new aesthetic for our men's business, really taking cues from the streetwear trends that are happening out there. You'd see in the portfolio of our men's business that we are kind of widening the aperture in terms of the aesthetics that we service for our guests. Finally, going into collaborations and lab. I know you spent some time with Woody this morning, really going through what is coming up in 2019.
I just wanted to take a step back to let you know that we have been doing collaborations over the last couple of years. I think the point of difference for us is we really do try to leverage our relationships with ambassadors, as well as studios that we work with, as well as places that we feel are really culturally important. I think the first collaboration that we launched a couple years ago was Taryn Toomey. It was met with a lot of commercial success. Then from that, we entered into relationships with the Royal Opera House. Really had great relevance in our Europe market, particularly London. It did resonate quite well in North America because it had such a feminine aesthetic.
This really was more a play on seeing if we could potentially have opportunity in a dance category, as well as really working with Francesca, who's a prima ballerina within the Royal Opera House. The second collaboration that we did last year that was really successful is probably something that's way more adjacent to who we are. We worked with SoulCycle. Again, that was very successful for us. Probably less successful in terms of acquiring new guests because of the adjacency of the brand and what they do, but still a really exciting collaboration and just a lot of learnings there. It was definitely an important retention play for us in terms of the guest view. What's exciting for 2019, 'cause we feel like our approach to collaborations, we really want it to be dynamic.
We don't wanna continue to go after the same suspects, whether it's fashion designers or ambassadors. We actually really wanna be able to mix it up to surprise and delight our guests. In 2019, we're really working with much more fashion-relevant designers. On the men's side, working with Robert Geller, and on the women's side, working with a pretty high-end designer named Roksanda. We believe that this will really create credibility for us, really, with that more early adopter fashion market and give us fashion relevance. What's really important about these two collaborations is that they actually have a lot of reach in our Asian and European markets. Given that that's such an important growth category for us, and initiative for us, we feel like this would resonate really strongly in those markets.
More to come on collaborations, and you'll continue to see us work with a lot of different types of relationships, whether it's artists, musicians, et cetera. Our goal really is to mix it up and not go to the usual suspects. Going into accessories. This still actually is a startup business for us. We're really excited for 2019 to build upon the successes that we have seen and to really demonstrate the elasticity of our brand. Some key things that we're gonna be focused on in terms of growing the accessories business. One, really going after bags. I think we've been all over the place in terms of our aesthetic.
What I'm really excited about for fall 2019 is we are really creating some iconic franchises and really letting the life cycle of these franchises live much longer than they have in the past. Really owning bags and having that be a key piece of our strategy. I'd also say that we've probably been a bit one note in terms of the fabrications that we've offered. We've been heavily distorted into nylon, and you'll see us starting to diversify our raw materials, really just to give more visual character as well as a little more durability in our fabrics for our bags.
We also know, regardless of the functionality that we build, we know that aesthetically, it has to be something that a woman wants to carry from the gym into the subway to go to her office and not something that, like, is screaming, "I'm a workout bag." Those are some of the aesthetic details that we're evolving. Going into the other categories and accessories, really to support us going after more intentionally into the activities. Can you flip back? Thanks. We believe that we wanna use yoga, and not yoga. We wanna use equipment to really complete the activity through equipment. To the extent that we are in yoga, run, and train, really wanna be rounding out with the best yoga mats, rollers, you know, to really release the tension in your body.
We also launched some training gloves. We kind of haphazardly launched some of these equipments. It actually has been met with a lot of success. We feel that if we can intentionally tie these equipments into the activities that we're going after, really into the framework of outfitting, there's a lot to unlock here. The same thing goes for socks. We know that this is where we can also help complete the activity and a critical part of someone's sweaty pursuit. Finally, we feel that within accessories, there's a lot of different categories, whether it's hair accessories, scrunchies, headbands, hats, and we know that these are gateway products for us because it really is a much sharper price point.
It does enable us to get younger guests into the brand, and also as well, help to build the basket and make great gifts. We see an opportunity within this category to be basket builders, have some sharp price points to be gateway products for younger guests coming into the brand. As well as, when you look at kind of where the business spikes, it really does spike around Mother's Day, Father's Day, Christmas. We believe there's probably an opportunity for us to leverage gifting year-round within accessories. Finally, really going into self-care. This is a new opportunity for us. It is something that we tested back in October. It was sold in 17 stores across three different markets, Chicago, Orange County, and Toronto.
What we learned from our guests is that she really trusts us in this space, and she really looks to us as the experts and authority on sweat. The products that we launched with was a deodorant, a dry shampoo, a lip balm, and a facial moisturizer. Based on the test, and the results of that, we feel optimistic that there is an opportunity for us here. We definitely have a unique take on it, given that we feel that we are the authority on the Sweatlife. We will be rolling out self-care to 50 doors in June as well as online. Same categories. The other unique take that we have on it is, as we talk about Science of Feel is you guys will all get some giveaways when you leave today.
You'll notice, like, whether you put on the lip balm or if you actually touch the packaging, we really are incorporating the Science of Feel into this product. When you put the lip balm on, you'll see that the texture of it on your lips feels quite different from what's out there in the market. On the packaging, we really intentionally built it so that it was soft to the touch. When you have it in travel packs, which we really believe that that's a huge opportunity for us as people rushing out of the gym to get ready to go to the office. We wanted to be able to have some travel packs for our guests when they're going from studio to work.
We have them in travel-size packages, but the cool thing with the soft touch packaging is that you won't hear it rattling around to distract you. Just, again, some really thoughtful details that we embedded into our product, really intentionally using some insights from Science of Feel. Really that is a roadmap for product for 2019 and beyond. We feel really confident that with the successes that we have had using Science of Feel as our innovation platform, it is not only a differentiator, but we know that it's commercially very viable. We're really excited to be able to continue using this and leveraging this philosophy into all of our products and in the years to come. Thank you. With that, I have the pleasure of introducing Celeste. Thank you.
Hi, everyone. My name is Celeste. I'm happy to be here today to talk with you guys about the growth that we see over the next five years in North America, as well as all the innovation we're up to within our omni-guest experience. 2018 was a great year for North America. We ended with a 7% store comp and a 43% e-commerce comp and close to $3 billion in business. We ended with just under 350 permanent stores and 25% digital penetration. Probably the most exciting thing is not only that 2018 was a great year, but how much runway we still see left in North America. As Calvin mentioned, men's digital and category expansion are all truly in their infancy within North America, which is our most mature market.
Our North America growth story is really anchored on our physical ecosystem, our digital ecosystem, and our community model. We are focused on creating a guest-centric, full omni-channel experience. We really believe that we will be positioned to win. I'll take you through those three strategies in a little bit more depth. To start with our physical strategies, our physical growth is really fueled by our agile retail concept. To your question, Jen, I feel really confident that we will continue to have one of the most productive store fleets out there, and that our store fleets will continue to be the envy of most retailers. Five years ago, we really had one store type. It was a 3,000 square foot store.
If you were a $3 million store or a $13 million store, if you were in a suburban mall in Chicago, or if you were in a really cool downtown hip neighborhood. Today, we have four distinct store types that we really look to in order to help us create relevant experiences in every community we go into. They are helping us penetrate markets deeper than we ever thought possible, and we're actually seeing less cannibalization than we assumed, which is a great sign. This strategy also allows us to leverage our strength of agility as an organization as well as our local community knowledge. Within these store types, I'm gonna take you a bit deeper into the seasonal strategy as well as our co-located strategies, 'cause I think we truly have a unique point of view in these. Our seasonal is really our pop-up strategy.
These stores, on average, are open for 3- 6 months. Last year, we opened over 60 seasonal stores in North America. From resort towns like Cape Cod and Muskoka to back-to-school hubs like Harvard Square and University Park in South Bend, Indiana, to holiday centers that are really relevant during the peak months, like Arrowhead in Phoenix, Arizona, Santa Anita in California, and Smith Haven in New York. Our seasonal stores allow us to capture organic traffic. Our seasonal stores are over-indexing on new guest acquisition, and on average, over 35% of all guests in those stores are new. We're acquiring guests at a faster rate. It's also letting us test and iterate markets to understand how we can grow our permanent footprint into the future. Oops, that was a mistake.
Our co-located strategy has been a major focus for us over the last two years, and I know you've heard us talk about that. It is really going to help us with our goal of doubling our men's business. This is where we take our most productive stores from approximately 3,000 sq ft, and we expand the square footage and take them to on average 5,500 sq ft. Within this square footage growth, we are seeing really good overall business growth. But in men's, in particular, we're seeing on average 50%-60% growth in men's with this additional square footage with no additional breadth of assortment given.
Better news, even on top of the year 1 growth we're seeing, is that in year 2, these co-located stores are continuing to outperform the mainline from a comp perspective, which gives us a lot of confidence as we look at category and assortment expansion into the future. Although we are really excited about our physical strength, we are actually more excited about what we see is possible within our digital ecosystem. We can clearly see a path where we will double our digital business across the globe, and we know that North America will be a huge part of this. Three key areas of focus within our digital growth is a focus on our core e-commerce experience, growing the online assortment, and transactional omni. Within our core e-commerce experience, we are really focused on our foundation and ensuring that it can scale with us.
This year, you will see further enhancements of product education online with a real focus on our product detail page, which is really the workhorse of the website, so lots of opportunity within it. We will replace our search and browse platform with a more modern system that will allow the guest to have a much better product discovery journey online. We will do a complete redesign of checkout, which will help us to eliminate any further friction within the guest journey, and we will begin our journey on getting true personalization between the web experience and our app experience. On top of that, as Calvin mentioned earlier, we will have a real focus on bringing the soul and community of Lululemon to life within our digital ecosystem.
Growing the online assortment. Based on performance and product insights, we believe that our online assortment can be 2 times the assortment in store. Some of the key areas that we'll start to look to right away in order to expand this assortment are extensions of color in core styles online, extending sizes, so either 0s to 14 inseam in different lengths, as well as fixed waist sizing in men's online to ensure that we carry that full size assortment. We'll have year-round shops, so a real focus on ensuring that year-round, things that may be more seasonal from a physical perspective are still available. Think swim, rain or accessories, which we know have the ability to over-index online. Online exclusives will also continue to be a big focus, and we know those are always a huge hit.
Transactional omni. We know guests expect a seamless experience between channels, and they wanna be able to get what they want, when they want it, how they want it. We're really committed to ensuring that our experience supports this. With our great physical footprint and our digital capabilities, we believe we're really set up to win within this omni-channel experience. We'll have a continued focus on BBR, which is our endless aisle experience. Today, that drives over 12% of e-commerce revenue comes from our stores selling from the full assortment to the guest within their four walls. Ensuring that a guest might get a curated experience in their local store, but they always have access to the fullest assortment online. We have an innovative comp plan that ensures that our educators are always focused on getting the guest exactly what they want.
BBR will continue to be a strategic pillar for us as we grow the online assortment strategically. Ship from store is something that I would say we're industry leading in today due to the fact that we have RFID as our foundation. We will continue to leverage ship from store to ensure that we can sell to the last unit and really take into consideration top line and margin implications as we move product throughout our network. Buy online, pickup in store. We have currently 35 stores testing buy online, pickup in store since last fall. We've continued to iterate that experience, and we now have a really solid experience that we feel confident with that sits in the category detail page.
We will be rolling buy online, pickup, in store out to our entire North America fleet by back to school. We believe this will just help again to really elevate the overall experience for our guests and leverage our ability to convert quicker and more often on e-com and drive store traffic. Now community. A lot of people would stand up here and they would talk about physical and digital. We're in the unique position about being able to talk about physical, digital, and community. Community is really at the heart of who we are. Not only is it the heart of who we are, but it's really at the heart of our omni-guest experience. Our community model made us experiential before experiential was a thing.
In community specifically, we're really focused on our ambassadors and growing and amplifying our ambassadors as they are truly the heart of our community. On top of our nearly 2,000 store-level local ambassadors, we have three global programs that we feel really strongly that this will be able to grow and amplify our ambassadors in a big way. Our Global Yoga Ambassador program is where we got our start. This year, we're launching our Global Run Ambassador program with Charlie Dark, who's our first global run ambassador, and he hails from the U.K., and he's really helped us enter run in a really authentic Lululemon way. Our Global Elite Athlete program. We support over 70 elite athletes across the globe, and we are really dedicated to helping them reach their highest athletic endeavors.
We're really excited that this spring, we welcome Nick Foles, who I'm sure a lot of you know, who ended up winning a Super Bowl with Philadelphia Eagles in 2017, and he just took the starting QB job at the Jacksonville Jaguars. We're really excited to support him and cheer him on during the next season. Our goal within all of this, physical, digital, and community, is really about deepening our guest experience day in and day out. Today, our relationship with our guest is a strength. As Calvin mentioned, 90% of our most loyal guests shop with us year in and year out, and yet we don't take this relationship for granted.
We're really excited to share with you how we're continuing to push the boundaries with our omni-guest experience and push our ability to go deeper with our guests and create even more intimate experiences. With membership, experiential stores and events, we're really aiming at giving our guests access to the Sweatlife through sweat, grow, and connect in an authentic Lululemon way. We see these three things really unlocking our full potential as a brand and supporting us in truly becoming a global experiential brand. I'll take you a bit deeper into each of these areas. Our membership program is currently being tested in Denver and Edmonton, and it's really aimed at giving our guests access to sweat, grow, and connect. What is the membership program? I'll give you a teeny bit more detail.
For an annual fee, the guest gets access to exclusive product, our personal development curriculum. They get 12 classes, one a month, at local studios in their community, led by our ambassadors, and they get access to our development curriculum as well as member-only events. A couple key learnings so far. First of all, events matter. In Edmonton, in a random Saturday at the end of January with minus 40-degree weather, we had 1,400 diehard members come out to do a three-hour sweat session with us, and I'm still getting feedback that it was one of the best days of their year. Our initial demand gives us a lot of confidence. For example, in Edmonton, in the month of October, when this was for sale, in those four weeks, we sold twice as many memberships as we did the Align Pant.
For context, the Align Pant is our number 1 pant in women's. To sell 2 times as many memberships, which is really an unknown product, in that same time period really gives us confidence in terms of the guests being ready for more with Lululemon. We assume that our most loyal guests would be, really be the one knocking down our doors signing up. We've been pleasantly surprised that both in Edmonton and Denver, this has actually been a way to acquire new guests. This has actually been new guests' first purchase with Lululemon. In Edmonton, 10% of memberships were bought by somebody as their first purchase, and in Denver, it was actually 13%. We are actually launching Edmonton in Austin in May, and then we will test 1 more market in North America this year.
We're continuing to test and iterate and are really excited about how we can create a really special membership program that we are proud of and that our guests loves. I did receive a review this morning. We get constant feedback from our members that I just wanted to share really quickly. From Stephanie, "The Lululemon membership is absolutely worth every penny. It allows a person to explore the fitness opportunities within one city that they may not have discovered on their own. Personally, I discovered that I love spin, and before this practice, I just thought it wasn't something that would be of interest to me. Discovering fitness gems and connecting with friends while doing so is pure magic. I hope this practice continues as its rewards are quite obvious. I would definitely sign up again." Experiential stores.
Calvin took my thunder a teeny bit, but we're really excited that this July, we will be opening up our first full expression experiential store in Lincoln Park in Chicago. It will be a 20,000 square foot experience, and our goal is that it really is the physical manifestation of the Sweatlife, bringing sweat, grow, and connect to our guest and celebrating the local Lincoln Park community in a beautiful way. On top of an innovative shop experience, Lincoln Park will have two sweat studios offering 6-10 classes a day. It will have an innovative Lululemon meditation space. It will have a fuel space that brings people together over coffee, juice, smoothies, or a seasonally relevant breakfast bowl. We will have close to 45 ambassadors within our Lincoln Park walls when we open.
We really cannot wait to get this bad boy open so that we can learn what our guest really thinks, and we can continue to iterate into the future, as we really believe that this can teach us as we look at the physical footprint in totality. Then events. Events might be our best kept secret. We host over 4,000 events across the globe in our local communities. As Calvin mentioned, this year, we are really focused on our flagship events. This year, on top of SeaWheeze, we will also host three Sweatlife festivals in Europe, one in Paris, one in Berlin, and one in London. In London, we have a goal of having 6,000 people join us over the two days. We'll do Unroll China across 10 cities in China.
We'll do two Immersions and our 10K series. In North America, we will host three 10Ks, one in Toronto, one in Edmonton, and our first 10K in the U.S. later this fall. Just for some context, Edmonton and Toronto went live for sale in March. They both sold out within 48 hours. Toronto getting 10,000 people, 24% men participating, and Edmonton selling 7,000 events or 7,000 spots. This is just a few examples of the scale and opportunity we see possible in the event space. I know there's a lot of information, but hopefully you can feel our excitement and the pull that is truly happening within our communities around membership, experiential stores and events.
We see these three areas truly helping us reach our vision of being the experiential brand that ignites a community of people living the Sweatlife through sweat, grow, and connect. I would say that I've been with Lululemon for 13 years, and Lululemon was born to do this, so it's really exciting to be in the work. With that, I will bring Stuart up to talk about international.
Okay. Thanks, Celeste. Great to be here. You know, we've come a long way since 2014. I think we'd all agree. I'm excited to share with you some highlights of our vision for international over the next five years. I'd like to start with a video because that's what we do. We have videos. I'll share some stats and context after we watch it, I'd like to share this just because I believe this footage, this video really conveys how powerful our brand is coming to life in our international markets and in China specifically. With that, Gerry, you wanna roll it? Great energy. It's hard to deny. That looks like a lot of fun.
This event was the celebration of our 20th anniversary. We conducted the event in four cities: Shanghai, Beijing, Chengdu, and Shenzhen. We had just around 3,000 actual participants live in the event in those four cities. We conducted it in a very intentionally omni-channel manner, meaning we made it very easy and encouraged WeChatable moments. That translated successfully into over 1 billion media impressions for that event alone. I did wanna share, I think to convey the energy and the excitement of how the brand is really taking root in our international markets. You can get a sense for how the feel of the brand in North America is very much alive and well in our markets overseas.
It also illustrates through the context I just offered, how our business model is coming to life internationally and how we're leveraging the tried and true playbook of community and connecting that to new and innovative digital strategies. I just thought that was a great way to start. This does, I think also give you a sense of the excitement that we now feel that we are on the cusp of an inflection in our international business. You heard Calvin describe the our goal over the next five years to quadruple our business. We're very confident in pursuing that goal. We will do it in a manner that is balanced between stores and e-commerce.
I'll offer some additional color and details on that momentarily. Then finally, we are encouraged that we're seeing growing brand awareness in all of our international regions. In selected regions, we even attribute the accelerating comp trends we saw in 2018 in our stores and e-commerce to a higher level of brand awareness. Our work over the last several years is beginning to pay off. That's a nice segue into the next slide. This has not happened overnight. This has been a journey over several years of very considered and careful investments. These investments have been laying the foundation for not only the success that we've, you know, now been capturing in our most recent year in 2018, but also sets the stage for the next phase of growth.
You know, we're pleased with the success that we've captured over the last four years. We nearly doubled the penetration of international from around 6% in 2015 to just over 11% in 2018. We're pleased with that growth rate, but we still feel like we're just getting started. This journey has also not happened without mistakes. There's been some important lessons we've learned along the way. We feel like those hard-won lessons make us stronger. We've refined our business model, we've refined our go-to-market strategies. We feel like this helps us de-risk the growth plans that we now have into the next five years.
As we think about where we're headed and our ambitions through 2023, you know, just wanted to introduce some of the key elements of our goals. Certainly, the sports apparel market at $115 billion is not the entirety of where we see our brand playing. Calvin touched on that in terms of the other adjacent areas where we feel we can compete and win. This gives us confidence that we can deliver an annual growth rate in our international markets of over 30%. We'll do that through four specific key areas of focus that you see listed here. I'd like to take a few minutes now just to walk us through each of those.
The first key geographies. You've heard us talk about Asia-Pacific and EMEA broadly over the last few years. Those remain the broad areas that we will pursue growth internationally. We have important growth plans in each of those geographies rather. As we drill into those regions, there is one important area, specifically China, that emerges. This is really important to our growth story overall internationally. By 2023, we project our revenues in China will exceed the Europe and Australia, New Zealand revenues combined. Just to give you a sense of the scale of growth we're anticipating in China. I'll offer some other details in a few minutes.
We wanted to just start with these stats on China, just to give a sense of just the depth of the potential as we see it. You know, certainly the level of urbanization, the level of online users and the Millennials, as an age segment within China, we see all these factors as important tailwinds to our business and our opportunity in China. Secondly, omni-channel guest innovation. As I mentioned, we will have a very balanced strategy between stores and e-commerce, as we enter and develop our international markets. We do see a greater potential for our digital business internationally and in particularly in China. There are key investments that we need to make to unlock that opportunity.
Frankly, we're a little behind in our journey from a digital standpoint. We are, as you heard us mention on the last earnings call, making important new investments in websites in Korea and Japan and in China, the first half of this year, as well as in France and Germany. This unlocks an ability to engage with our guests in a local language, with local relevant content, and also unlocks the potential for more sophisticated digital marketing. This is a big part of the story for this year, the current year and beyond. From a store standpoint, you're gonna see accelerating unit counts. I think that's the case and the guidance that we offered for 2019.
You're seeing a tipping of the balance of new stores, overall for the company, tipping to the international markets. You should expect that to be the case as we go forward. Finally, omni-channel. There's been great success in North America, with key technology investments in RFID and BBR, ship from store, buy online, pickup in store. These proven successful strategies have yet to be rolled out fully in our international markets. Making those investments to create a more seamless guest experience, connecting those pools of inventory across channel is definitely a priority for us over the next few years.
Oops. Yeah, there we go. Product. You heard Sun give a, you know, a great overview of our product strategies. Certainly, that's a global view, and our international businesses will take advantage of and participate in the great strategies that Sun and her team have crafted. In addition to that, there's a few unique things we're exploring from an international standpoint. Currently, Asia Fit has been a very successful initiative in just a handful of styles, relatively limited part of our assortment, but we can't keep it in stock. It's been wildly successful. As we look to expand that, we will explore just how broad across the assortment the strategy can ultimately be.
Regional exclusives, again, Sun Choe and her team will explore, are there opportunities for us to learn from the regions to take creative insights, to create not only regional styles, but potentially styles we take back for the globe. Finally, our omni guest experiences. Critical that we are able to build guest engagement, acquire guests. We will leverage, first and foremost, the proven playbook of community that we've developed and perfected in some ways in North America. We will continue to execute that model in our international markets, local community events, ambassador and influencer model. That is foundational to how we will execute this part of the business. We'll look to amplify that through various forms of social media and digital marketing.
You know, the event that we showed at the beginning is an example of how we've been able to do that successfully. The digital strategy in general will be a critical part of our international strategy in Asia in particular. We'll be talking more about that on subsequent earnings calls, so stay tuned. Finally, from an enhanced engagement standpoint, again, there's a lot of success that we are able to draw on from our North American experience, where we've been able to build a guest file, a CRM strategy, connect that to a more sophisticated data analytics personalization, to drive a deeper understanding of how we acquire and retain guests. That is really something we have yet to fully introduce in our international markets.
We're making important investments in the first half of this year in CRM capabilities. That will be our first steps. Over the next five years, we'll look to draft off of the success in North America and take those lessons learned abroad. Those are the strategies at a high level that we will pursue to achieve our goal through 2023 of over 30% annual growth rate. What I'd like to do now is just go through some highlights by region and channel just to offer some dimensions on that growth, that growth trajectory. Starting by region. In 2018, you see here our total revenue is at $360 million in our international markets.
You see it broken down here, in the pie chart, in these four groupings, China, Europe, Australia, New Zealand, and then Asia, excluding China. Australia, New Zealand actually being the largest of the group, with the other three regions, almost on par. You see how we expect the growth rates to unfold over the next five years to achieve this four times increase in overall revenue. You see China and Asia, again, Asia excluding China, each representing roughly a third of our international business. You see Australia, New Zealand shrinking significantly as it'll be on a lower growth trajectory, but still a very profitable business. We're very happy, proud of the work that's happened in that region with the team to improve its profitability. It's a business we're very happy with.
Europe will grow faster than Australia, New Zealand, but not as fast as China and Asia. Hopefully that gives you some context, some feel for at least directionally where we see the growth as well as the importance of China in the overall growth story. As we look at by channel, again, from 2018, we see e-commerce internationally roughly on par from an e-commerce penetration standpoint to the company overall around 1/4. We see that growing significantly faster over the next few years than our store business growth. We see e-commerce overall for our overall international business just over 1/3 of the overall revenue mix.
What I would say in China and Asia, it's probably closer to 40%-50%, not quite half by 2023, but north of where we are here for the international business overall. Again, that reflects the new investments we're making, the priority that we're setting around the digital part of our business, as well as guest appetite, how folks wanna shop in Asia and China in particular, and how we can better participate in those underlying trends. Lastly, profitability. You heard us describe how in 2018 all of our international regions, with the exception of Europe, were profitable. Overall, including Europe, our total international business was also profitable. We see that inflecting significantly into 2019 and through 2023.
We still we're still probably about 18 months away from Europe breaking even. We're very pleased with the progress we're making there in leveraging the investments that we've made and also the accelerating comp trends and the work that Gareth Pope has done to recalibrate and retool our go-to-market strategies and our real estate strategy specifically. You see by 2023 all of our regions will be profitable, and we will at that point the international business will represent 10%-15% of overall company earnings and accelerating and inflecting. This is not the height of our aspirations in terms of how the international business will contribute to our earnings.
It will likely always be disadvantaged due to certain structural cross-border costs versus North America, but we can close that gap significantly, and we will. I would be remiss if I didn't mention that all of this is only possible by the great leadership of Ken Lee in Asia and Gareth Pope in Europe. They've both done a fantastic job of building their teams and crafting the strategies that will bring these results to pass. With that, we're gonna close on international.
Thanks, Stuart. All right, we are running ahead of schedule, as we always try to exceed expectations. We're gonna head down for lunch. We'll show you guys how to get downstairs. Same room as the product activations were. Since we're a little bit ahead of schedule, let's be back up here at 1:00 P.M., and we'll start the afternoon session then. All right. Thanks, guys.
Okay. Hope everyone had a good lunch. Back for the afternoon. Moving on from international. Next topic is enterprise fitness. It's a very sexy topic. I don't have a video, but that in no way diminishes how interesting and important these areas of the company are. In fact, I had a nice chat with some analysts and investors during the break around a lot of the things I'm gonna mention. Let's get right into it. This first slide just introduces the notion that there are critical infrastructure parts of our, our foundation, if you will, that will enable our ability to scale globally. We're gonna drill into each of these, but we hold supply chain technology, people processes, and cost structure management as critical to enabling our success.
In terms of supply chain, you know, we've done a lot of work over the last few years. We are excited at the opportunities that we continue to see in front of us. The areas that we're focused on, you see listed here. Cost, speed, and flexibility. From a cost standpoint, our agenda here over the next five years is to continue to extend the success that we've seen since 2015, when we initiated our major supply chain initiatives. I'll speak more about some of the details around that in just a bit. From a speed standpoint, there's a number of programs and processes we're pursuing, process efficiencies in terms of how our design, merchant, and sourcing teams collaborate, new technologies that we're investing in.
3D technology to help reduce the time it takes us to develop samples and iterate with them. Production geographies, as we look at putting more of our production in the Western Hemisphere, there are cost benefits as well as lead time savings. Speed is an important part of our supply chain agenda. Lastly, flexibility. Fabric innovation, being able to commercialize innovative fabrics faster and offer our designers and our merchants a broader palette in a more efficient way is definitely an important part of how we create that flexibility. New category capabilities. You heard a lot of new, a lot of exciting new categories that we're exploring, areas like self-care that had not been a part of our supply chain capabilities in the past.
We're looking to make investments and build teams at the right scale to help us support the growth that will emerge in these new categories. Lastly, you know, production practices with our key vendors. We have a number of important vendors that support our strategic programs and how we are able to develop more efficient practices with them in terms of how we stage raw materials and commit those raw materials to production offers us ongoing opportunities for efficiencies and flexibility. Drilling into supply chain specifically. You see here, just a recap from 2015 to 2018, how our gross margin improvement unfolded 680 basis points.
Some of the folks that have covered us for a while will recall we had a 300 basis point program that we were going after aggressively, and we're thrilled at the level of success we've been able to achieve. The things that contributed to that, to those savings and those efficiencies from 2015 to 2018, you see listed here, s ourcing efficiencies. This is just getting our house in order in terms of how our design, our sourcing, and our merchant teams collaborate. This was the low-hanging fruit back in 2015 that we tackled first. That enabled us to show up with our suppliers as better partners.
Through that, we were able to identify new strategies, segmentation specifically, where we could source our products based on the lifespan that they have on our sales floor. In 2014 and 2015, we sourced every product on the same timetable. By looking at the lifespan, if you will, of each product, we are able to source products that had three, four-year lifespans within our assortment differently than products that would only be with us for a season, if you will. That segmentation and how we were able to allocate our assortment and our purchasing by segment and negotiate with our vendors better pricing for those longer lifespan categories led to significant level of savings.
Then volume. You know, as our business has grown, we've been able to leverage volume, pricing improvements as you would expect. So these were the three of the primary strategies that we leveraged to improve our product costs. I would say in addition to this, and you'll hear PJ speak to it in his section, product mix was definitely a tailwind for us. Our largest and most profitable category is women's pants. And as you know, as we've reported, we've done quite well in women's pants over the last few years. That's contributed to the success in our gross margin overall.
As we look forward from 2018 to 2023, and you heard the guidance that Calvin shared with us, our expectations are to continue to drive improvements in our gross margin at a modest level on an annual basis. We'll do that through the continued expansion of our segmentation strategy, the volume pricing opportunities as our business grows, that those create. Lastly, a new strategy that Ted Dagnese and Chris Bonner within our supply chain team have developed is efficiencies within our network, our DC network, downstream efficiencies.
We're in the process of putting a new distribution center outside of Toronto, which will help us unlock efficiencies for Eastern Canada, improve our service offering from a delivery standpoint to our guests and also enable us to capture certain cross-border opportunities more efficiently. Those position us well to continue to drive these product margin opportunities. This, you know, embedded in the improvements from 15, 18 was also a lower markdown posture for the business that we see continuing for the next five years. An important part of the story and one that we're really proud of.
Technology. Another area we've made important investments over the last few years, Julie Averill, our CTO, our Chief Technology Officer, has done a fantastic job of building our technology hub in Seattle and recruiting really a world-class team. They are deployed across these areas that you see listed. From a channel standpoint, important investments, and I would say across all of these areas, we're going to look to leverage the investments that we've made over the last few years, so that we'll be able to continue to realize the benefits that those investments offer us. We will make carefully considered incremental investments over the coming years.
The sort of a lot of the major investments, particularly in supply chain and technology, that we'll talk about, a lot of those have been made already, and we're in a position where we can leverage those investments into the future. Specifically within technology and the capabilities that we're looking to unlock within channel important technology projects around Omni, much of that that you're familiar with, and we've spoken about today. Labor management has also been another success, improvement in how we schedule and track hours within our stores. Improvements to our website. Most of the folks here who followed the story will be familiar with the new website that was launched in the back half of 2017.
We continue to make improvements and investments in that website to improve the experience for the guests as they visit us on the website, as well as conversion opportunities that we see and continue to identify. POS. Our POS system in our stores is older than we'd like it to be and we've got an important project this year to upgrade. That project is already underway. We've successfully implemented a new POS system in our Europe business. Product, inventory planning systems, predictive analytics, all important capabilities that will enable Sun and her merchant teams to be more effective in building their assortments and estimating where and how our inventory should be allocated.
Within our guest strategies, you heard me mention a number of these things with the context of the international business. Our CRM capabilities, data analytics, machine learning. We have a small team of data scientists who are helping us breathe life into our data analytics program. It's still in the very early days. We've seen good success with personalization. Some of the first wins coming from that team, and we're excited to continue to expand and extend that success. Infrastructure, which includes some of the more exciting areas like reporting and security, are important for us to ensure that we have scalable systems, we have the right information at the right time, we have secure systems, both for our internal data as well as our guest data.
We'll make important investments in our HR systems this year as well to upgrade how we're able to support our people teams. That's a nice segue into people processes. There's been a lot of work that's happened over the last year or two to look at our org structure, to identify how we can grow more efficient, and to set in motion actions to build on that. Susan Gelinas, our Head of People & Culture, is here with us today, and she's been on point for all that work. You know, I think the sort of the bottom line that we want to take out of that is creating a flexible and durable structure to enable our growth ambitions.
Talent, certainly, how we think of talent, is likely different than other companies. The personal development, the leadership development, is really an important part of the culture. Nonetheless, attracting the right leaders, and the right team members, across the business, both domestically in North America and overseas, is a critical factor enabling our success. Key people processes. You heard me mention the new HR system. There are things we can do more efficiently and make investments to help support that, so that we can support our people teams more effectively.
Finally, as we think about cost structure management and our guidance that we've offered and our commitment to deliver modest SG&A leverage, there are a number of areas where we will drive those efficiencies. Operational efficiencies, as you think about our stores and our digital businesses. We've had important labor projects that have unfolded over the last two years that have helped us grow more efficient and more effective in how our store teams operate. Within digital, even this year, we have launched programs to drill into our digital marketing. As we have pushed more resources into that strategy, we've identified opportunities for us to grow more efficient in how we deploy those resources. Indirect sourcing. This is a program that the company really hadn't had before 2015.
We stood up a team in 2015 that has had good success, and we continue to see that as a foundational part of how we manage the broad cost structure of the business. By indirect, we are referring to everything we purchase that is not merchandise. That is not things we sell to our guests. Overhead management, broad category. We continue to look for opportunities in our home office to grow more efficient, both from a people standpoint as well as process. These areas offer deep opportunities for us to find ways to free up resources that we can invest in the exciting growth strategies we outlined.
The combination of these things gives us confidence that given the low teens total revenue growth trajectory that we've outlined, we will have enough incremental investment to fuel those core, those critical growth initiatives and still be able to deliver on this commitment on SG&A leverage. Again, sorry about not having a video. I'm going to hand it over to PJ now.
Unfortunately, I also don't have a video. There are only so many up for grabs. I'm the least tenured member of the management team, and I'm also not the CEO. We threw out most of the red meat this morning in a press release. You know, Calvin started off by giving you the financial guidance. I'm going to rehash these really quickly and then go into detail behind them.
Once again, we see revenue growth in the low teens CAGR over the next five years. I do want to stop and just the significance of the CAGR is in some years we may be above, some years we may be below, but the objective is in five years to look back over that period having achieved the low teens growth. That's how we're thinking about it. I hope that's how you'll think about it as well. Gross margin expansion will continue with modest expansion. Stuart talked about that. I'll talk about some of the puts and takes in gross margin. SG&A leverage, continued modest leverage. Modest plus modest. Modest gross margin, modest SG&A leverage equals comfortable operating income comfortably outpacing revenue growth. We hope to achieve that going forward.
EPS growth. On par or better than operating income growth. Augmented by opportunistic share repurchase. We do throw off a lot of cash in this model. The plan does call for significant cash. We'll opportunistically look to return cash to shareholders as we've done the last couple of years. We'll continue to invest in the business with CapEx in the 6%-8% of sales range. Square footage growth, low double digit, annually. One of the questions we always get is, how are you gonna maintain momentum? In 2018, we generated a lot of momentum. Coming into 2019, we maintained that momentum. We feel really happy about the momentum we're currently seeing. The answer is, it's the continuous innovation that Sun and her team continue to put out.
It's the strong guest connection that Celeste and her team have forged over many years, a relationship that's only growing stronger. It's also the multiple expansion opportunities. I should qualify that remark. I don't mean P/E multiple. We're not being presumptuous there. We'll leave that up to you. We control what we can control. That's the platforms that have been built over the years under Stuart's leadership that are gonna allow us to enter new markets, enter new categories, so really important. I know we've been talking about the, you know, things in threes, the Power of Three, but I did slip in a CFO, the financial flexibility, which is near and dear to my heart, right?
By financial flexibility, we mean, you know, continued strong cash flow, maintaining a strong balance sheet, and just having the dry powder to support the business, to support the strategy, to continue to invest. I am celebrating my one-year anniversary at Lululemon this month. And I may just throw in that the share price has gone up considerably in that period. I'm not, Kimberly, I'm not saying it's related to me, but I'm just saying. At any rate, one of the reasons I feel so fortunate to be here is because of the growth we have had. We talked about men's, we talked about digital, we talked about international, but there's, I stepped on that tape, too.
But there's so much more, there's so much more and you've heard it's new categories. It's new markets. It's, you know, there's so many and growing the core, the continued innovation. There's so many other things about our growth that de-risk this plan and give reasons to believe that, and give us confidence in the plan we're putting forward. Just getting into breaking down revenue by product, region, and channel. Let's start with product. Women's, the core, 70% of the business today or as of 2018. Men's, 21%. Other categories, accessories, Ivivva, less than 10%.
We see men's growing at that 20% CAGR going forward. One of the things that, you know, we do that get me excited and that we do wanna stress is that the women's business, the core, is gonna continue. It's gonna continue to grow. We see that growing in the low double digits and throw in accessories and new categories, which is upside. The combination of these three outside of men's growing low double digits, it gives you a lot of confidence that, you know, we're gonna continue to, you know, hit our targets.
And, and I would also comment that the women's business as a $2 billion business, having that growing at low double-digit, again, it takes risk. As a CFO, I like to think about risk, that takes a lot of risk out of the plan. You end up in a place where we're less reliant, in 2023, you're less reliant on any one particular category. Cutting this by region, again, North America, close to 90% of our business. Asia Pacific and EMEA making up about 11%. When we talk about international quadrupling, now that's sort of eye-popping. If you dissect it, really, it translates into just over 30% CAGR, which is lower than what we achieved last year.
When you look at it that way and the compounding effect, you know, it just puts things in context, and it's very achievable. Adding on top of that the North America business, which is a, you know, approximately $3 billion business growing at low double digits, you get to a point where North America is still meaningful, but international becoming a much bigger part of the company. Cutting this by channel. Stores roughly 65%, e-com 26%. Other, seasonals, outlets, you know, less than 10%. Again, we see 20% plus growth, CAGR in our e-com business. With our store business, again, approximately $2 billion business.
I like to look at, think of things in dollars and cash. Growing at low double digits, you know, gets you to a place where, you know, e-com is playing a much bigger role, but stores just continue. The two, you know, they'll feed off one another. Shifting gears to profitability. I do wanna drill into this a little bit. When we talk about modest expansion in gross margin, there's gonna be several puts and takes, okay? Stuart talked about product cost and how, you know, that there's still upside there, albeit on a much smaller scale than what we've seen in the past, but that's a tailwind. Channel mix, the e-com P&L has a different structure than the store P&L.
It's not burdened by rent and depreciation. That, you know, as e-com grows faster and penetrates, we'll see, you know, a tailwind on channel mix. Market mix. As we penetrate internationally, again, international, the P&L, the rent depreciation, rent particularly, you know, focus on rent, just much higher internationally, so t here'll be some pressure there. Category, as Stuart mentioned, women's pants is our most profitable category. As men's grows, as other categories grows, accessories, you know, there'll be some pressure based on category mix. You know, I'll use the men's pants business as an example.
As men's pants grows, you know, we'll scale that and there'll be, you know, cost efficiencies there, but it's still below where women's is today. We'll see a little bit of pressure based on category. Net-net, we do see modest expansion going forward when you kind of add up all the puts and takes. SG&A leverage, modest leverage. We've made some big investments over the last couple of years in talent and infrastructure, the focus will be on leveraging those fixed costs going forward. Channel mix, again, e-com, you know, not without store labor. Its, you know, its margins are higher. As we penetrate into e-com, you know, that will be a good guy. Then market, we talked about the international P&L.
You know, the profitability is not where North America is. We'll, you know, we'll be working towards, you know, increasing that, but initially, it will be a headwind. Again, net-net, we see modest leverage going forward. The combination, again, out-operating income outpacing revenue growth. In terms of capital allocation, we're gonna continue to invest in the business and fuel our strategy. Our priorities are, you know, expansion opportunities, by product, you know, product innovation, investing in different markets and continuing to invest in channel, our e-com business. Also putting the platforms and the infrastructure in place to support the business. New stores, renovations, optimizations, co-located, supply chain investment and IT, which Stuart talked about.
In 2018, we generated over $700 million in cash from operations, which is a meaningful number. That will continue to grow. We put back into the business capital investment of just over $200 million. Which is appropriate and allowed us to do all the things we wanted to do. Obviously, there's a nice gap there, and that's free cash flow, right? We'll continue to generate free cash flow going forward. Again, we'll opportunistically look to potentially return that to shareholders. Last year, we returned close to $600 million via share repurchase. Year to date, we've returned roughly $165 million. Again, there'll be those opportunities going forward.
In terms of our global store footprint, we're starting in North America with 349 stores as of 2018. The way this breaks out globally, we see the square footage growing in the high single digits in North America. We know what you'll see in North America is less unit growth, more square footage growth, and that's partly due to our co-located strategy where we expand stores. In Europe, 21 stores, we'll look to growth square footage in the mid-teens. APAC, ex-China, 55 stores, growing at just over 35%. 15 stores in China, where we'll be looking to grow square footage by over 40%.
Obviously, the square footage skews to international and specifically, you know, to China in a bigger way. All right. In closing, hopefully, you know, the investment thesis here is exciting. I know, you know, I'm certainly excited about it. You have this powerful business model that is leading the marketplace by maintaining a model that is relevant to, you know, an evolving guest who values connection, values experience, values innovation, values community. You know, again, a model that is certainly in touch with its guest. You have a growth company that's getting more profitable as it goes, which is a great combination. There's multiple growth drivers, not just the big three, but also the other ones we talked about.
Again, you know, just to reiterate, we have, you know, the financial flexibility to certainly support our strategy, but also to, you know, take advantage of opportunities that may arise, make additional investment, and once again, you know, reward shareholders. That is it for finance. Then I think we're gonna have Stuart, Celeste, Sun, Calvin, and myself come up for questions.
Here we go. All right, guys, we have about half an hour for Q&A. We've got some mics in the audience. What we'll do is, I'll call on you. Wait till you get the mic. Just state your name and your firm, and then ask your question. Pretty simple. Pretty standard. Rebecca.
Hi. Is this on? Okay. Hi. Sorry, I just have a loud mouth, so I couldn't tell if it was on or not. Rebecca from BlueFin Research. My question is on the gross margin expansion, you guys have made a lot of progress over the last, you know, few years. A lot of that was due to really not having a supply chain in place, right? Kind of creating one for a company of your growth. If you look at product cost as your biggest bucket for the gross margin expansion, is that due to volume? Or where are you, I guess, in terms of like the innings of, you know, platforming raw materials, not airing as many goods as you used to, negotiating by narrowing down your vendors.
I mean, I know you've been doing that work over the last few years, but where would you say you are in terms of that inning?
That's a good question. This is working, right?
Yeah.
You're right. We were in a tougher place a few years ago. It's been a big strategic focus. Ted Dagnese, our head of supply chain, has built a real world-class team. He has done amazing work in every part of the supply chain. The elements or the strategies that will continue to drive product cost improvements are the segmentation strategy. I'm hoping I'm doing a good job of describing this. Essentially, by being able to break down our assortment into products that inherently we should be able to source at a lower cost and putting a program in place to capture those opportunities is the essence of it.
Where we began with that years ago, Ted has continued to refine it, improve it, and identify ways to extend those opportunities by digging in deeper and deeper with our vendors in partnership to identify what their true costs are, how we can be a better partner to them, and how we can share with them the benefits of those more efficient practices. Volume is the other driver, as I mentioned, that will continue based on the low teens growth trajectory that we've outlined and the growth rates that PJ talked about. That will continue to offer us opportunities into the future for volume pricing benefits.
Sorry, can I just do a quick follow-up? I don't know. What about if, where are you, like, in terms of staging raw materials? I know that that was still something you guys were, like, trying to obviously turn, being able to order closer to the sales data, and that's something you guys have been working on now. Now that you kind of have new established raw materials and fits. Do you feel like you're in a better position that that's also part of the strategy in terms of the gross margin expansion, not just segmentation?
That has been part of the strategy, and it has been reflected in the benefits that we've captured. For a lot of companies, that strategy is aimed at reducing markdowns. In our business, markdowns are a lower part of how we conduct our business. It's a smaller opportunity for us in comparison to some of those other more traditional retailers. Nonetheless, it has been a benefit. We have captured meaningful results from that, and we continue to explore how to expand on it.
I would say, just some future opportunities too, is we've mostly on the raw material side, really looked at, raw materials for men's and raw materials for women's. Now that we're really living into some of these activity strategies, we see a real opportunity to be able to share some raw materials across men's and women's and really be able to use scale to negotiate prices down. That's something that we see as a future opportunity for us.
One way back.
It's Bob Drbul from Guggenheim Securities. I guess, one question I have is on the international expansion, can you just address, you think about higher operating costs with the stores, but lower brand awareness, the need for higher investments in the brand and advertising and marketing, and just sort of, you know, how you plan to really approach and attack markets, especially like China, as, you know, with just the 15 stores now.
Yeah, I'll take that one. The cost structure challenges in our international markets and in China specifically, fall into a few different areas. If you look at the four-wall store cost profile, rent and labor costs more, and that is just a fact versus North America. As you look below that to the overhead operating costs, we have made important investments in the team and the capabilities regionally. Part of what we're now seeing in terms of reaching profitability is the economies of scale as the business grows, and we're able to leverage those investments. As you mentioned, one of our important goals is driving brand awareness regionally.
We will leverage, as I mentioned earlier, the tried and true community strategies, and we will adapt those to regional tastes and opportunities and look to amplify them via new investments in digital marketing. What we've seen success with in North America with digital marketing as well as with CRM, new data analytic capabilities are all in front of us in international. There are investments we will make, there are investments we will leverage, and there are some fundamental elements of operating overseas that, and the cross-border costs from an inventory standpoint, are all real. The comment that I offered in the presentation that we see that improving but likely will be structurally lower than North America is how we line those up.
[inaudible]
Hi. Thanks for a great presentation. Can you comment a little bit more on footwear? That's obviously a, you know, pivot in strategy to take that in-house and directly operate it. It's a different competitive set. Just talk about how that fits into the accessories and other categories that you talked about and how you expect to position that category. Thank you.
Great. Thank you. I think the first thing that I just want to sort of stress is that when we look at the five-year and the numbers that we shared, they're driven out of the core and our ability to expand the categories that we're competing in today and we know we can go even deeper in. As you saw in PJ's, the dependency on new is very minimal. It's really quite immaterial in our ability to achieve our target. We shared self-care and footwear as examples of some categories that we've tested and had good response with our guests. Self-care, we're moving. Footwear, we know that the guests responded.
We learned what we needed to learn how to commercialize it. We believe we see opportunity that we can provide through our unique Science of Feel as solution for the guest that doesn't exist today. It's gonna be limited and small when we test. It's not something that, you know, we're going to be in market anytime soon with. You know, we'll share plans at a later date. Definitely it is something We understand the competitiveness of that. We want to enter with something that is unique, defined, and focused. That's what our plan will be. It'll be done as a test and learn at a later point in time. We'll share the plans then.
Thanks so much. Kimberly Greenberger, Morgan Stanley. Stuart, my question is on international. It looks as though the entry into Asia, you know, let's say Greater China, has been so much more accelerated than the initial entry into Europe, or rather, should I say the reception in Asia has been so very strong relative to the very early days in Europe. I'm wondering, were there some key learnings that you had in Europe that informed the stronger entry into Asia? Is it just a different market and a different response to the brand? Can If you can just talk about those two geographies and any key learnings.
Yeah, it's a great question. I think fundamentally, the market dynamics are very different. There is just a more robust appetite for, I think, Western brands generally in Asia. There is a growing health and fitness trend in China, supported by the Chinese government specifically, that is helping sort of add to the tailwind for businesses that participate in those markets. Those factors don't exist in the same way in Europe. We had some painful lessons in Europe where we did abandon, in certain cases, our proven showroom model. Opened stores in locations based on sort of attractive real estate where we hadn't yet adequately developed demand, brand awareness in the community in those markets.
Folks that have paid close attention over the years, we've had some write-offs of stores in Europe. What's remarkable is those stores are now performing well. The questions that we bring back to the team in Europe is like, "What's changed?" I alluded to it in some of my earlier remarks, brand awareness in Europe has improved based on the strategy that we then shifted away from sort of a real estate strategy to more building brand awareness in the U.K. via London specifically, and then retooling our market entry to take advantage of the lessons learned from the showroom strategy. Gareth Pope introduced a new version of the showroom strategy for Europe, where we've now had great success with that. It's given us confidence to accelerate our store openings.
You'll see more store openings happening faster in Europe as a result of essentially the pause that we took for some period of time for us to assess what we had missed steps, retool our model, and then come back to the market. Even with that, though, I will say, those other broader macro market dynamics that I mentioned between Asia and Europe still give an advantage to our Asian businesses, our Chinese businesses, in terms of the pace of growth.
Mark.
Great. Thanks. Mark Altschwager from Baird. I also wanted to ask a question, on margin. I guess just more broadly, how should we think about flow-through to the extent you drive any revenue upside from the targets that you outlined? I think over the last couple of years, as you've beaten your plans on the top line and on gross margin for that matter, you've taken that opportunity to reinvest more aggressively in the business. I mean, is that how you're thinking about it moving forward, or is the business at a scale at this point where you would expect to see maybe a bit more flow-through?
Maybe I'll start with the answer, and then I'll let PJ come on top of what I'll suggest or I'll offer. Where we've been in the past has been a commitment to the earnings recovery, the margin improvement. We made investments in 2015 and 2016 and 2017 in particular around supply chain and technology that we just had to. After we hurdled those critical investments, we returned to our goals of delivering SG&A, modest SG&A leverage on an annual basis, and that's what we did in 2018. That doesn't mean every quarter you're gonna see SG&A leverage or flow-through, but what it does mean for the year, we will deliver on that commitment.
The only thing I would add to that is we've seen results from incrementally investing in SG&A, whether digital marketing efforts or investing in more seasonal stores. We're using those funds freed up from good performance to continue to fuel top line. We've seen the result, and it's a strategy we think again, opportunistically and in a disciplined way, we continue to serve.
I'll just finally, I mean, it's what I touched on in terms of the momentum. To Stuart's point, we will always first meet the guidance and the commitment that we have out, but where we see opportunity, we're a growth business, we're an innovative business, and we have a lot of opportunity to continue to test and learn, and we're going to be opportunistic and make those to continuing to push the business forward. We'll look at those.
Thank you. Jay Sole, UBS. Calvin, interested in your view on, you know, where the boundaries of the brand are. Because obviously there's a ton of opportunity just doing running and some of the other activities you talked about. You know, ball sports has always been a question and things like, you know, tennis or soccer. You know, have you thought about a way to extend the brand into those areas as you think beyond this five years and into maybe even, you know, you know, looking into 2030, things like that?
Absolutely. We've done a lot of work in the last few months in understanding where our current guests sweat, what our assortment is in the activities in which they choose to sweat, and making decisions of where do we want to play and where are we choosing not to play. Certain categories like the three we have identified, being yoga, train, and run, are the three key categories where we've identified, you know, we will win in. That means all season, all year long, across all channels, across all needs of that guest. We want to be their destination for their for their needs, their sweat needs.
We also know, though, that our loyal guests sweat in other activities. And some of our products are versatile, designed for, used for, and can service that need, and o thers we need to design more into more frequently. Tennis being one that you've identified, swim being another, hiking being another. There are other activities that we've identified where we know our current guests sweat in, and we wanna make sure that we are there to service their needs. Now, on those, we may offer them sometimes in stores, always online, certain locations, always in store, depending upon the seasonality of the store.
In those, we've definitely looked through the lens of our loyal guest. There are activities that we've elected, we're just not gonna play in. You know, we have no roadmap to play in baseball. We have no roadmap to play in football, hockey, soccer. Now, there's a lot of men's and women's gear that are versatile and you can, you know, play in our, you know, Metal Vent and our Pace Breaker shorts, but specifically design for. There are activities that we've said for now we're not. We've looked at specific design activities that we will. Where we're excited is, I would say other than yoga, you know, there's a lot of opportunity to grow the core and expand by focusing on our already loyal guest as a means of fulfilling their sweat needs on a more consistent basis.
That's gonna really drive that growth as we leverage bottoms and others to acquire new guests and then, you know, trade them up and trade them across into the categories that we're, you know, designing into more consistent basis.
Thank you.
[inaudible]
Hi, there. Thanks for the great presentation. I'm hoping you can talk about pricing as an opportunity for the brand. I'm also interested in hearing a little bit more about the loyalty program. It sounds like it is not an insignificant revenue opportunity. One of the compelling things there is a lot of the value to the consumer is actually coming from third parties. Are there other opportunities to leverage the strength of the brand and partnerships and so forth, to monetize? Thanks.
Did you wanna take pricing and you'll take membership?
Sure. I'll take pricing. In general, we actually see that there's opportunity for us to have a wider band of pricing. Like, I think today we've gotten a little bit better, but if you look in the past, we really stayed in kind of like that mid zone where it was a pretty narrow price bucket. As we infuse our product with more innovation, we do see that there is an appetite and an elasticity to our brand so that we can really, from an entry price point to a more premium price point, really play in a broader range of price points. I'd say the best expression of that really is in our outerwear business. I'd say last year, 2018, we probably capped out at about $598.
Really got a lot of feedback from our educators as well as our guests that we probably could have maybe gotten a little more for those pieces just based on how much innovation and how much we've built into some of those designs. Going into 2019, we took at look at some of those insights, really building in solutions for like 3-in-1 outerwear and, you know, inching up the prices just to make sure that we're still being honest with ourselves around the price value equation for our guests. You'll start to see where there's more innovation, where we believe the guest perceives to be more value, that there is AUR opportunity. We've also seen it actually in our core category of pants.
You know, if $98 is our opening price point, when we layer on more innovation in our fabrics, she will pay us more for those, knowing that there's more technical features in our products. We've really not seen any price resistance in some of those categories. I would say conversely, when you have categories like accessories where you are trying to build baskets and increase UPT, we have opportunity like in our headbands or scrunchies or things like that, to, like, make sure that we have some sharp entry price points that can create gateway product for younger guests to enter into the brand.
On membership, I would just share that we're really excited about the opportunity to connect deeper with our guests and what it could create in terms of another revenue stream. We are in test mode, so I'm not gonna get into any economics. Trust us when we say that as we're looking at these different tests, we are really looking at not only the guest experience, but also the economic model and how we use it to continue to grow.
Hi. Thanks. Michael Binetti with Credit Suisse. Stuart, yes, you answered this a little bit earlier, but I wanna ask maybe a little different way. Your guidance for the international revenues is to quadruple, and if we anchor ourselves in the comment you made recently that international recently just turned breakeven or turned profitable, I think that roughly gets us to about 1,000 or 1,500 basis points margin improvement over the five-year period, based on your 10% to 15% of earnings for international that you gave us. You mentioned that there was some fixed cost leverage. You mentioned that, you know, rents and labor have some different components, but that is a lot of margin expansion for international while growing that fast.
You know, can you maybe point us to some of the, you know, the components that you think will I guess be the most leverageable as we watch that business. I guess another question is at 2023, where will the margin opportunity be at that point? What will not have been leveraged at that point that'll still be, you know, very leverageable for you?
I think the obvious is the overhead investments that we made regionally. As those businesses scale, there will be leverage on those costs. The mix of the business, it kind of goes to PJ's slide as well, as we looked at over-index in our digital business, that carries a benefit from a mix standpoint. You know, otherwise, I think it's scale. It's gaining scale. It's as we look at the granular plans over that period, store by store, market by market, we'll see improvements even in the store models as we learn more, as we gain efficiencies regionally, that will help us improve the four-wall performance of those stores.
We're seeing that significantly in Europe, where the stores have been slower out of the gate as we talked about earlier. As we gain velocity in the different channels, there's opportunities for margin improvement. Then we'll participate in the overall company margin improvement programs that PJ outlined. Looking forward, I think it's continued scale, i t's continuing to drive the e-commerce penetration even farther, and again continuing to participate in the overall company programs.
Thanks. Rafe Jadrosich , B of A Merrill. When you look at your China business, can you talk about how important platforms like Tmall will be to the growth outlook? Then also, if you could just talk about how the stores in China compare to the U.S. in terms of the product mix and then gender and customer mix.
Sure. I'll start with the first one, I'm sorry, the latter question. I'll come back to Tmall. On the assortment, it is largely a global assortment. We tailor that as we do in North America to the differences that we see by market in our international business. The assortment is largely similar at this point. As I mentioned, we're beginning to take advantage of Asia Fit within women's in particular, and looking to see how far we can take that across the portfolio, the assortment. In terms of the gender breakdown, it's, you know, there tends to be a little higher in Asia, a little lower in Europe.
We recognize an opportunity that we're exploring how to take advantage of, whereas we're not yet known in a lot of places at all. Therefore, we're not known yet as a women's brand. There's an opportunity to show up and avoid some of the challenges that we have in North America and present ourselves as a more dual gender brand. That's still work for us, in front of us to really capitalize on that approach. For the most part, the stores have been. The strategy has been more like North America than not. That's something we're exploring. On the Tmall side, it's been, you know, there I think the stat was 700 million users on Tmall.
I mean, it's double the population of the U.S. and Canada combined or something close to that. It is a major part of the e-commerce landscape in China. You know, we appreciate the opportunity for us to accelerate our business on Tmall. We take close consideration of how we want the brand to show up as a premium full-price business. That presents some obstacles with Tmall, but we've been successful, I think, in navigating that. Tmall will continue to be a meaningful part of our e-commerce position, but we are laying plans now to grow WeChat and our own .cn site to a greater degree, where we have more visibility, a greater experience for our guests, greater level of engagement for us from a CRM standpoint, and so w e'd like to tip the mix to those other channels as we go as we go forward.
Thanks. Jamie Merriman from Bernstein. Stuart, you just talked a little bit about the gender mix in China. Just to pick up on that, can you talk about, and maybe back to North America, you know, what the gating factor is on the number of co-located stores that you're rolling out? You know, if you're not rolling out that sort of dual gender store internationally now, why not?
I think it's a great question. I think the initial strategy was formulated and set in motion before the co-located strategy in North America was fully formed. A lot of those early store openings was just following the same playbook. Since really 2016 and into 2017, we've developed the co-located strategy. We've begun to take that into consideration for our new openings in our international markets to begin to shift them larger and more dual gender. What I want to acknowledge is we're not fully where we'd like to be in that effort.
Simeon Siegel, Nomura Instinet. I find that a great last question. Just out of curiosity, can you talk about any cadence within those five years on the gross margin piece? As you think about it, how those bubbles will change. The market, the product mix, I guess, get larger in later years. Maybe the gross margin is more powerful in the earlier years. H ow you're thinking about that in the context?
Yeah. I mean, I think the general cadence would be, you know, we have, you know, momentum on the product side, on the cost side. We'll continue to push into that and, you know, I would say that the timing of it, you know, we hope to always be achieving scale, right. As we get bigger and bigger. You know that I think, you know, that will be weighted towards the earlier years. I think as penetration increases internationally, you know, we'll see the pressure that I talked about on gross margin, probably closer to the, to the outer years. Then e-com somewhere in the middle.
Thanks. Thanks, guys.
Thank you.
Oh. Still going. Sorry. You gotta wait. I gotta send us off. Howard, we rehearsed this. What a fumble drop the ball moment. Wow.
We're early. There's no rush.
Come on. We're having tea and coffee and snacks. Listen, I'll, I'm just gonna do a quick wrap up. You know, I started off today talking about the opportunity that, you know, I saw, we saw for Lululemon as we looked forward. Celebrating 20 incredible years, but really recognizing where we are and where we can go and where we will go, is super exciting. I also talked about discipline, and one of the questions I had earlier, that if I could do a redo in terms of answering of what are the layups and what are the more challenging aspects of the five-year plan.
It's probably less about a particular initiative that we'll achieve as much as it is in the discipline of making sure that we remain focused and prioritize the things that are gonna move and have the greatest impact because of the amount of opportunity that we have as we look across the brand and the opportunity is one of the areas. The vision that we shared with you, being an experiential brand to ignite a community of people living the Sweatlife, you know, for us is very inspiring. What do we mean by being an experiential brand? I mean, the first thing is what is so cool about Lululemon, and, you know, we were chatting at lunch is, I'm not yet ready yet to define who we truly are. What is the brand? I think the brand has such an opportunity to be more.
We know it's more than just an apparel brand. We believe being an experiential brand is an incredible vision, a forward-thinking of pushing of who we're going to be and how we express that through retail, how we express that through events, how we express that through social media is a big opportunity and something that is truly unique in igniting the community of those people living the Sweatlife. What is the Sweatlife? We define it internally, but it really is what you see happening, the trends that I shared with you today. It's the energy you get when you show up in Hong Kong or Beijing or Shanghai or even in Europe and London.
It really is the fact that there's a balance that's happening between people wanting to be fit, people recognizing the connection between mind and body, and the power in that of connection. That's what we're talking about. This brand is so beautifully positioned to have an authentic voice in that. When we look at where we are today and growing into that vision, the Power of Three, those three strategic pillars, is where we're gonna put the focus, put the attention to really innovate into that. Around innovative product. I mean, how amazing is that we're sitting here today. I can share with you the loyalty engagement scores of our loyal guests, the net promoting scores of our guests, yet we have so much opportunity with our core.
We have so much opportunity still with our women's business, not to mention doubling our men's business. We have such an opportunity with our store business still, yet we can double our digital. Obviously with North America, we are far from done, and we can quadruple our international business. The opportunity of focusing on core, of building out that expansion, and yes, test and learn on a few new, and when some hit, we're gonna be able to accelerate that. Nothing that we shared today is rooted or overly committed on any of the newness. That's going to be incremental. It really is rooted in we can do more with what we know today.
We have a loyal guest who loves this brand. We can service him and her in a much more effective way across how they sweat to and from, and the services and the life that they're choosing to live and w e can lean into that. Which is really what inspires us and gives us great confidence in the vision and the opportunity and the potential for this brand. With that, I wanna thank you for taking the time today, and I know we'll hang for a couple of questions. Thank you everyone. Really appreciate it.