American Express Revamps Platinum Card With Lululemon Cash Back, Boosting Revenue Potential
American Express has revamped its high-end Platinum credit card, forging a cash back partnership with Lululemon. This move is expected to boost Lululemon's revenue and potentially attract more customers to the card.
Lululemon, known for its athletic wear, has seen impressive growth. In China, its revenue surged by 24% year over year, while the rest of the world saw a 15% increase. The company's stock, however, has faced challenges, dropping 66% from its peak and trading at a P/E ratio of 11.7, significantly lower than the S&P 500 average.
The Platinum card partnership could be a game-changer. With an estimated 5 million global Platinum cardholders, and potentially 3 million using the Lululemon perk each quarter, this could translate to $900 million in revenue for Lululemon. Cardholders now enjoy a $75 quarterly credit on Lululemon purchases, totalling $300 annually. This refresh is expected to accelerate Lululemon's revenue growth, which is projected to increase from its current 7%.
Despite North America's slower growth, Lululemon's international expansion and upcoming product innovations are expected to drive business growth faster than current Wall Street expectations. This makes Lululemon's stock a potential buy for investors.
American Express's Platinum card refresh with Lululemon is set to benefit both companies. Lululemon stands to gain significant revenue, potentially boosting its stock value, while American Express attracts more customers with the appealing perk. This strategic partnership could be a win-win, driving growth for both brands.
