lululemon athletica inc 10-K for FY2024

lululemon athletica inc. (LULU)

10-K 2024-03-21 For: 2024-01-28

Added on April 07, 2026

About this 10-K

lululemon athletica inc filed this 10-K on March 21, 2024, covering the fiscal year ended January 28, 2024 (FY2024).

Headline figures

Fiscal year ended January 28, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $9.62B; up 18.6% from $8.11B a year earlier
Net income: $1.55B; up 81.4% from net income of $854.8M a year earlier
Diluted EPS: $12.20; up 82.6% from $6.68 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


Delaware						20-3842867
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)


		Page
PART I
Item 1.	Business	1
Item 1A.	Risk Factors	10
Item 1C.	Cybersecurity	22
Item 2.	Properties	24
Item 3.	Legal Proceedings	24
Item 4.	Mine Safety Disclosures	24

PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	25
Item 6.	Selected Consolidated Financial Data	26
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 8.	Financial Statements	46
	Index for Notes to the Consolidated Financial Statements	54
Item 9A.	Controls and Procedures	79
Item 9B.	Other Information	80
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	81

PART III
Item 10.	Directors, Executive Officers and Corporate Governance	82
Item 11.	Executive Compensation	82
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	82
Item 13.	Certain Relationships and Related Transactions, and Director Independence	83
Item 14.	Principal Accountant Fees and Services	83

PART IV
Item 15.	Exhibits and Financial Statement Schedule	84
Item 16.	Form 10-K Summary	86
Signatures		87


	2023			2022			2021
	(In thousands)
Net revenue	$	7,631,647		$	6,817,454		$	5,299,906

Net revenue growth	11.9		%	28.6		%	40.3		%


	2023			2022			2021
	(In thousands)
Net revenue	$	963,760		$	576,503		$	434,261

Net revenue growth	67.2		%	32.8		%	80.3		%


	2023			2022			2021
	(In thousands)
Net revenue	$	1,023,871		$	716,561		$	522,450

Net revenue growth	42.9		%	37.2		%	36.3		%


☑			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Number of company-operated stores by market	January 28, 2024	January 29, 2023
United States	367	350
Canada	71	69
Americas	438	419

China Mainland	127	99

Australia	33	32
South Korea	19	16
Hong Kong SAR	9	9
Japan	8	7
New Zealand	8	8
Taiwan	8	7
Singapore	7	8
Malaysia	3	2
Macau SAR	2	2
Thailand	1	—
APAC	98	91


Number of retail locations operated by third parties by market	January 28, 2024	January 29, 2023
Mexico	15	12
United Arab Emirates	8	7
Saudi Arabia	6	3
Israel	3	—
Kuwait	3	1
Qatar	3	3
Bahrain	1	—
Total locations operated by third parties under license and supply arrangements	39	26


	03-Feb-19		02-Feb-20		31-Jan-21		30-Jan-22		29-Jan-23		28-Jan-24
lululemon athletica inc.	$	100.00	$	163.83	$	224.94	$	216.20	$	212.74	$	327.15
S&P 500 Index	$	100.00	$	119.18	$	137.23	$	163.75	$	150.40	$	180.71
S&P 500 Apparel, Accessories & Luxury Goods Index	$	100.00	$	90.30	$	86.51	$	83.79	$	59.05	$	47.77


Period(1)	Total Number of Shares Purchased(2)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2)	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(2)
October 30, 2023 - November 26, 2023	50,619	$	400.10	50,619	$	222,941,393
November 27, 2023 - December 31, 2023	10,040	507.57		10,040	1,217,845,403
January 1, 2024 - January 28, 2024	59,180	483.73		59,180	1,189,218,138
Total	119,839			119,839


	2023			2022			Year over year change
	(In thousands)						(In thousands)		(Percentage)
Gross profit	$	5,609,405		$	4,492,340		$	1,117,065	24.9	%

Gross margin	58.3		%	55.4		%	290 basis points


	2023 Compared to 2022						2022 Compared to 2021
	Change		Foreign exchange changes		Change in constant dollars		Change		Foreign exchange changes		Change in constant dollars

Net Revenue
Americas	12	%	—	%	12	%	29	%	1	%	30	%
China Mainland	67		8		75		33		7		40
Rest of World	43		1		44		37		12		49
Total net revenue	19	%	1	%	20	%	30	%	2	%	32	%

Comparable sales(1)
Americas	8	%	1	%	9	%	28	%	1	%	29	%
China Mainland	39		7		46		17		6		23
Rest of World	32		1		33		10		9		19
Total comparable sales	13	%	1	%	14	%	25	%	3	%	28	%


	2021
	Income from Operations		Operating Margin		Income Tax Expense		Effective Tax Rate		Net Income		Diluted Earnings Per Share
	(In thousands, except per share amounts)
GAAP results	$	1,333,355	21.3	%	$	358,547	26.9	%	$	975,322	$	7.49
Transaction and integration costs	2,989		—						2,989		0.02
Acquisition-related compensation	38,405		0.7						38,405		0.29
Tax effect of the above					1,417		(0.7)		(1,417)		(0.01)
Adjusted results (non-GAAP)	$	1,374,749	22.0	%	$	359,964	26.2	%	$	1,015,299	$	7.79


	January 28, 2024
	(In thousands)
Cash and cash equivalents	$	2,243,971
Working capital excluding cash and cash equivalents(1)	185,345
Capacity under committed revolving credit facility	393,661


	2023		2022		2021		2023		2022		2021
	(In thousands)						(Percentage of net revenue)
Net revenue	$	9,619,278	$	8,110,518	$	6,256,617	100.0	%	100.0	%	100.0	%
Cost of goods sold	4,009,873		3,618,178		2,648,052		41.7		44.6		42.3
Gross profit	5,609,405		4,492,340		3,608,565		58.3		55.4		57.7
Selling, general and administrative expenses	3,397,218		2,757,447		2,225,034		35.3		34.0		35.6
Impairment of goodwill and other assets, restructuring costs	74,501		407,913		—		0.8		5.0		—
Amortization of intangible assets	5,010		8,752		8,782		0.1		0.1		0.1
Acquisition-related expenses	—		—		41,394		—		—		0.7
Gain on disposal of assets	—		(10,180)		—		—		(0.1)		—
Income from operations	2,132,676		1,328,408		1,333,355		22.2		16.4		21.3
Other income (expense), net	43,059		4,163		514		0.4		0.1		—
Income before income tax expense	2,175,735		1,332,571		1,333,869		22.6		16.4		21.3
Income tax expense	625,545		477,771		358,547		6.5		5.9		5.7
Net income	$	1,550,190	$	854,800	$	975,322	16.1	%	10.5	%	15.6	%


	2023			2022			2023		2022		Year over year change
	(In thousands)						(Percentage of net revenue of respective operating segment)				(In thousands)		(Percentage)
Segmented income from operations:
Americas	$	2,937,184		$	2,503,740		38.5	%	36.7	%	$	433,444	17.3	%
China Mainland	337,316			196,865			35.0		34.1		140,451		71.3
Rest of World	201,832			103,204			19.7		14.4		98,628		95.6
	$	3,476,332		$	2,803,809						$	672,523	24.0	%
General corporate expenses	1,240,436			1,005,988							234,448		23.3
lululemon Studio obsolescence provision	23,709			62,928							(39,219)		(62.3)
Impairment of goodwill and other assets, restructuring costs	74,501			407,913							(333,412)		(81.7)
Amortization of intangible assets	5,010			8,752							(3,742)		(42.8)
Gain on disposal of assets	—			(10,180)							10,180		(100.0)
Income from operations	$	2,132,676		$	1,328,408						$	804,268	60.5	%
Operating margin	22.2		%	16.4		%					580 basis points


	2022			2021			2022		2021		Year over year change
	(In thousands)						(Percentage of net revenue of respective operating segment)				(In thousands)		(Percentage)
Segmented income from operations:
Americas	$	2,503,740		$	1,867,016		36.7	%	35.2	%	$	636,724	34.1	%
China Mainland	196,865			167,318			34.1		38.5		29,547		17.7
Rest of World	103,204			67,674			14.4		13.0		35,530		52.5
	$	2,803,809		$	2,102,008						$	701,801	33.4	%
General corporate expenses	1,005,988			718,477							287,511		40.0
lululemon Studio obsolescence provision	62,928			—							62,928		n/a
Impairment of goodwill and other assets, restructuring costs	407,913			—							407,913		n/a
Amortization of intangible assets	8,752			8,782							(30)		(0.3)
Acquisition-related expenses	—			41,394							(41,394)		(100.0)
Gain on disposal of assets	(10,180)			—							(10,180)		n/a
Income from operations	$	1,328,408		$	1,333,355						$	(4,947)	(0.4)	%
Operating margin	16.4		%	21.3		%					(490) basis points


	Total		2024		2025		2026		2027		2028		Thereafter
	(In thousands)
Operating leases (minimum rent)	$	1,645,318	$	300,379	$	287,224	$	232,510	$	214,519	$	158,252	$	452,434
Purchase obligations	688,934		656,376		5,566		10,506		2,899		13,587		—
One-time transition tax payable	28,555		12,691		15,864		—		—		—		—


Report of Independent Registered Public Accounting Firm (PCAOB ID 271)			47
Consolidated Balance Sheets			49
Consolidated Statements of Operations and Comprehensive Income			50
Consolidated Statements of Stockholders' Equity			51
Consolidated Statements of Cash Flows			53
Index for Notes to the Consolidated Financial Statements			54


	January 28, 2024		January 29, 2023
ASSETS
Current assets
Cash and cash equivalents	$	2,243,971	$	1,154,867
Accounts receivable, net	124,769		132,906
Inventories	1,323,602		1,447,367
Prepaid and receivable income taxes	183,733		185,641
Prepaid expenses and other current assets	184,502		238,672
	4,060,577		3,159,453
Property and equipment, net	1,545,811		1,269,614
Right-of-use lease assets	1,265,610		969,419
Goodwill	24,083		24,144
Intangible assets, net	—		21,961
Deferred income tax assets	9,176		6,402
Other non-current assets	186,684		156,045
	$	7,091,941	$	5,607,038
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	348,441	$	172,732
Accrued liabilities and other	348,555		399,223
Accrued compensation and related expenses	326,110		248,167
Current lease liabilities	249,270		207,972
Current income taxes payable	12,098		174,221
Unredeemed gift card liability	306,479		251,478
Other current liabilities	40,308		38,405
	1,631,261		1,492,198
Non-current lease liabilities	1,154,012		862,362
Non-current income taxes payable	15,864		28,555
Deferred income tax liabilities	29,522		55,084
Other non-current liabilities	29,201		20,040
	2,859,860		2,458,239
Commitments and contingencies
Stockholders' equity
Undesignated preferred stock, $0.01 par value: 5,000 shares authorized; none issued and outstanding	—		—
Exchangeable stock, no par value: 60,000 shares authorized; 5,116 and 5,116 issued and outstanding	—		—
Special voting stock, $0.000005 par value: 60,000 shares authorized; 5,116 and 5,116 issued and outstanding	—		—
Common stock, $0.005 par value: 400,000 shares authorized; 121,106 and 122,205 issued and outstanding	606		611
Additional paid-in capital	575,369		474,645
Retained earnings	3,920,362		2,926,127
Accumulated other comprehensive loss	(264,256)		(252,584)
	4,232,081		3,148,799
	$	7,091,941	$	5,607,038


	Fiscal Year Ended
	January 28, 2024		January 29, 2023		January 30, 2022
Net revenue	$	9,619,278	$	8,110,518	$	6,256,617
Cost of goods sold	4,009,873		3,618,178		2,648,052
Gross profit	5,609,405		4,492,340		3,608,565
Selling, general and administrative expenses	3,397,218		2,757,447		2,225,034
Impairment of goodwill and other assets, restructuring costs	74,501		407,913		—
Amortization of intangible assets	5,010		8,752		8,782
Acquisition-related expenses	—		—		41,394
Gain on disposal of assets	—		(10,180)		—
Income from operations	2,132,676		1,328,408		1,333,355
Other income (expense), net	43,059		4,163		514
Income before income tax expense	2,175,735		1,332,571		1,333,869
Income tax expense	625,545		477,771		358,547
Net income	$	1,550,190	$	854,800	$	975,322

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	$	(23,077)	$	(65,571)	$	(28,494)
Net investment hedge gains (losses)	11,405		8,904		9,732
Other comprehensive income (loss), net of tax	(11,672)		(56,667)		(18,762)
Comprehensive income	$	1,538,518	$	798,133	$	956,560

Basic earnings per share	$	12.23	$	6.70	$	7.52
Diluted earnings per share	$	12.20	$	6.68	$	7.49
Basic weighted-average number of shares outstanding	126,726		127,666		129,768
Diluted weighted-average number of shares outstanding	127,060		128,017		130,295


	Exchangeable Stock	Special Voting Stock			Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
	Shares	Shares	Par Value		Shares	Par Value
Balance as of January 31, 2021	5,203	5,203	$	—	125,150	$	626	$	388,667	$	2,346,428	$	(177,155)	$	2,558,566
Net income										975,322				975,322
Other comprehensive income (loss), net of tax												(18,762)		(18,762)

Stock-based compensation expense								69,137						69,137
Common stock issued upon settlement of stock-based compensation					502	2		18,192						18,194
Shares withheld related to net share settlement of stock-based compensation					(153)	(1)		(49,808)						(49,809)
Repurchase of common stock					(2,202)	(11)		(3,681)		(808,910)				(812,602)
Balance as of January 30, 2022	5,203	5,203	$	—	123,297	$	616	$	422,507	$	2,512,840	$	(195,917)	$	2,740,046
Net income										854,800				854,800
Other comprehensive income (loss), net of tax												(56,667)		(56,667)
Common stock issued upon exchange of exchangeable shares	(87)	(87)	—		87	—		—						—
Stock-based compensation expense								78,075						78,075
Common stock issued upon settlement of stock-based compensation					322	2		11,702						11,704
Shares withheld related to net share settlement of stock-based compensation					(105)	—		(35,158)						(35,158)
Repurchase of common stock, including excise tax					(1,396)	(7)		(2,481)		(441,513)				(444,001)
Balance as of January 29, 2023	5,116	5,116	$	—	122,205	$	611	$	474,645	$	2,926,127	$	(252,584)	$	3,148,799


Note 1	Nature of Operations and Basis of Presentation	55
Note 2	Summary of Significant Accounting Policies	55
Note 3	Inventories	62
Note 4	Prepaid Expenses and Other Current Assets	62
Note 5	Property and Equipment	63
Note 6	Goodwill	63
Note 7	Intangible Assets	64
Note 8	Impairment of Goodwill and Other Assets, Restructuring Costs	64
Note 9	Acquisition-Related Expenses	66
Note 10	Other Non-Current Assets	66
Note 11	Accrued Liabilities and Other	66
Note 12	Revolving Credit Facilities	66
Note 13	Supply Chain Financing Program	67
Note 14	Stockholders' Equity	68
Note 15	Stock-Based Compensation and Benefit Plans	68
Note 16	Fair Value Measurement	71
Note 17	Derivative Financial Instruments	71
Note 18	Leases	73
Note 19	Income Taxes	74
Note 20	Earnings Per Share	76
Note 21	Commitments and Contingencies	76
Note 22	Supplemental Cash Flow Information	77
Note 23	Segmented Information	78
Note 24	Disaggregated Net Revenue	79


Furniture and fixtures						20%
Computer hardware and software						20% - 50%
Equipment and vehicles						20% - 30%


	January 28, 2024
	Gross Carrying Amount		Accumulated Amortization		Accumulated Impairment		Net Carrying Amount
	(In thousands)
MIRROR brand	$	26,500	$	(4,089)	$	(22,411)	$	—
Customer relationships	28,000		(7,492)		(20,508)		—
Technology	25,500		(12,632)		(12,868)		—
Content	5,000		(3,250)		(1,750)		—
Other	270		(270)		—		—
Intangible assets	$	85,270	$	(27,733)	$	(57,537)	$	—


	2023
	(In thousands)
Supply chain financing program balance, beginning of year	$	17,578
Amounts added during the year	$	533,640
Amounts settled during the year	$	(509,079)
Supply chain financing program balance, end of year	$	42,139


	Stock Options			Performance-Based Restricted Stock Units			Restricted Shares			Restricted Stock Units			Restricted Stock Units (Liability Accounting)
	Number	Weighted-Average Exercise Price		Number	Weighted-Average Grant Date Fair Value		Number	Weighted-Average Grant Date Fair Value		Number	Weighted-Average Grant Date Fair Value		Number	Weighted-Average Fair Value
	(In thousands, except per share amounts)
Balance as of January 31, 2021	804	$	139.27	199	$	149.20	4	$	299.09	275	$	166.50	15	$	328.68
Granted	194	310.29		139	185.37		4	326.70		129	331.42		—	—
Exercised/vested	174	104.85		165	100.89		4	299.09		144	139.33		15	397.83
Forfeited/expired	35	199.76		6	216.62		—	—		22	235.23		—	—
Balance as of January 30, 2022	789	$	186.10	167	$	225.27	4	$	326.70	238	$	265.90	—	$	—
Granted	192	371.04		117	274.90		5	308.66		120	364.51		—	—
Exercised/vested	93	127.68		114	170.04		4	326.70		111	241.02		—	—
Forfeited/expired	22	286.56		4	307.76		—	—		26	334.39		—	—
Balance as of January 29, 2023	866	$	230.78	166	$	295.93	5	$	308.66	221	$	323.89	—	$	—
Granted	213	360.00		121	296.27		4	370.59		132	364.63		—	—
Exercised/vested	264	160.45		104	201.56		5	308.66		106	294.65		—	—
Forfeited/expired	32	332.26		8	351.14		—	368.36		24	350.38		—	—
Balance as of January 28, 2024	783	$	285.69	175	$	349.84	4	$	370.85	223	$	359.12	—	$	—


	Outstanding					Exercisable
Range of Exercise Prices	Number of Options		Weighted-Average Exercise Price		Weighted-Average Remaining Life (Years)	Number of Options		Weighted-Average Exercise Price		Weighted-Average Remaining Life (Years)
	(In thousands, except per share amounts and years)
$2.78-$174.52	151		$	146.29	1.8	151		$	146.29	1.8
$188.84-$296.36	121		189.43		3.1	79		189.43		3.1
$306.71-$356.93	157		309.16		4.3	63		309.07		4.2
$358.09-$358.09	192		358.09		6.1	1		358.09		6.2
$368.36-$502.74	162		378.96		5.2	33		378.71		5.0
	783		$	285.69	4.3	327		$	212.01	2.9
Intrinsic value	$	150,645				$	86,874


	January 28, 2024		Level 1		Level 2		Level 3		Balance Sheet Classification
	(In thousands)
Money market funds	$	1,102,119	$	1,102,119	$	—	$	—	Cash and cash equivalents

Term deposits	8		—		8		—		Cash and cash equivalents
Forward currency contract assets	647		—		647		—		Prepaid expenses and other current assets
Forward currency contract liabilities	2,872		—		2,872		—		Other current liabilities


	January 28, 2024						January 29, 2023
	Gross Notional		Assets		Liabilities		Gross Notional		Assets		Liabilities
	(In thousands)
Derivatives designated as net investment hedges:
Forward currency contracts	$	1,242,000	$	—	$	258	$	1,070,000	$	—	$	17,211
Derivatives not designated in a hedging relationship:
Forward currency contracts	1,543,351		647		2,614		1,605,284		16,707		8,414
Net derivatives recognized on consolidated balance sheets:
Forward currency contracts			$	647	$	2,872			$	16,707	$	25,625


	January 28, 2024		January 29, 2023
Weighted-average remaining lease term	6.95 years		5.64 years
Weighted-average discount rate	4.0	%	3.1	%


	Payments Due by Fiscal Year
	Total		2024		2025		2026		2027		2028		Thereafter
	(In thousands)
One-time transition tax payable	$	28,555	$	12,691	$	15,864	$	—	$	—	$	—	$	—


Plan Category	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights(1) (A)	Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights(2) (B)		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (A))(3) (C)
Equity compensation plans approved by stockholders	1,181,031	$	285.69	8,428,503
Equity compensation plans not approved by stockholders	—	—		—
Total	1,181,031	$	285.69	8,428,503


			LULULEMON ATHLETICA INC.

			By:						/s/ CALVIN MCDONALD
									Calvin McDonald
									Chief Executive Officer
									(principal executive officer)
			Date:						March 21, 2024


			lululemon athletica inc.
			By:						/s/ CALVIN MCDONALD
			Name:						Calvin McDonald
			Title:						Chief Executive Officer


Annual Cash Retainer:(1)

All non-employee directors						$100,000

Additional Annual Retainers:
Non-Executive Chairman						$160,000
Lead Director						$50,000
Audit Committee Chair						$30,000
People, Culture and Compensation Committee Chair						$30,000
Corporate Responsibility, Sustainability and Governance Chair						$20,000
Audit Committee Member						$15,000
People, Culture and Compensation Committee Member						$12,500
Corporate Responsibility, Sustainability and Governance Committee Member						$10,000
Sub-committees – additional compensation may be provided.

Annual Grant of Restricted Stock(2)						$160,000(3)

Expense Reimbursement – for travel, lodging and other reasonable out-of-pocket expenses incurred in attending board and committee meetings.


(1)			The cash retainers will be paid in arrears, quarterly or semi-annually at the Company’s discretion. All amounts listed are in United States dollars.
(2)			Each share of restricted stock will be fully vested on the earlier of the first anniversary of the grant date and the Company's next annual meeting. Each non-employee director receives an initial restricted stock award in connection with the director’s election or appointment to the board. The initial awards are pro-rated for the partial year of service based on the date of election or appointment. Thereafter, on the date of each annual meeting of stockholders, each person who is either elected to the board at the annual meeting or continues to serve on the board upon the conclusion of the annual meeting will receive the restricted stock award.
(3)			The number of shares issued for restricted stock awards will equal the specified dollar value of the restricted stock award divided by the applicable per share ASC 718 charge as of the grant date as determined by the Company for financial reporting purposes.