lululemon athletica inc 10-Q for FY2026 Q2

lululemon athletica inc. (LULU)

10-Q 2025-09-04 For: 2025-08-03

Added on April 07, 2026

About this 10-Q

lululemon athletica inc filed this 10-Q on September 4, 2025, covering the quarter ended August 3, 2025 (FY2026 Q2).

Headline figures

Quarter ended August 3, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.53B; up 6.5% from $2.37B a year earlier
Net income: $370.91M; down 5.6% from net income of $392.92M a year earlier
Diluted EPS: $3.10; down 1.6% from $3.15 a year earlier

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Delaware			20-3842867
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)


Large Accelerated Filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited):	3
	Consolidated Balance Sheets	3
	Consolidated Statements of Operations and Comprehensive Income	4
	Consolidated Statements of Stockholders' Equity	5
	Consolidated Statements of Cash Flows	7
	Index for Notes to the Unaudited Interim Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	37

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 5.	Other Information	51
Item 6.	Exhibits	52

Signatures		53


	August 3, 2025		February 2, 2025
ASSETS
Current assets
Cash and cash equivalents	$	1,155,794	$	1,984,336
Accounts receivable, net	139,258		120,173
Inventories	1,722,570		1,442,081
Prepaid and receivable income taxes	323,227		182,253
Prepaid expenses and other current assets	187,879		251,459
	3,528,728		3,980,302
Property and equipment, net	1,917,361		1,780,617
Right-of-use lease assets	1,605,009		1,416,256
Goodwill	172,907		159,518
Intangible assets, net	9,308		11,673
Deferred income tax assets	21,417		17,085
Other non-current assets	268,709		237,841
	$	7,523,439	$	7,603,292
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	373,333	$	271,406
Accrued liabilities and other	423,933		559,463
Accrued compensation and related expenses	148,895		204,543
Current lease liabilities	297,919		275,154
Current income taxes payable	26,746		183,126
Unredeemed gift card liability	252,334		308,352
Other current liabilities	34,186		37,586
	1,557,346		1,839,630
Non-current lease liabilities	1,464,799		1,300,637
Deferred income tax liabilities	62,400		98,188
Other non-current liabilities	51,615		40,790
	3,136,160		3,279,245
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; 113,828 and 116,166 issued and outstanding	570		581
Additional paid-in capital	632,375		638,190
Retained earnings	4,085,559		4,109,717
Accumulated other comprehensive loss	(331,225)		(424,441)
	4,387,279		4,324,047
	$	7,523,439	$	7,603,292


	Quarter Ended				Two Quarters Ended
	August 3, 2025		July 28, 2024		August 3, 2025		July 28, 2024
Net revenue	$	2,525,219	$	2,371,078	$	4,895,879	$	4,579,969
Cost of goods sold	1,048,017		958,893		2,035,551		1,892,716
Gross profit	1,477,202		1,412,185		2,860,328		2,687,253
Selling, general and administrative expenses	951,658		871,959		1,894,529		1,714,385

Amortization of intangible assets	1,730		—		3,360		—

Income from operations	523,814		540,226		962,439		972,868
Other income (expense), net	9,737		17,994		21,523		41,277
Income before income tax expense	533,551		558,220		983,962		1,014,145
Income tax expense	162,646		165,298		298,485		299,802
Net income	$	370,905	$	392,922	$	685,477	$	714,343

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	$	4,707	$	(25,571)	$	174,479	$	(69,876)
Net investment hedge gains (losses)	790		10,834		(81,263)		24,315
Other comprehensive income (loss), net of tax	$	5,497	$	(14,737)	$	93,216	$	(45,561)
Comprehensive income	$	376,402	$	378,185	$	778,693	$	668,782

Basic earnings per share	$	3.10	$	3.15	$	5.71	$	5.70
Diluted earnings per share	$	3.10	$	3.15	$	5.70	$	5.69
Basic weighted-average number of shares outstanding	119,600		124,721		120,116		125,358
Diluted weighted-average number of shares outstanding	119,680		124,857		120,262		125,600


☑			QUARTERLY 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


	Quarter Ended August 3, 2025
	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 May 4, 2025	5,116	5,116	$	—	114,909	$	574	$	632,564	$	3,993,154	$	(336,722)	$	4,289,570
Net income										370,905				370,905
Other comprehensive income (loss), net of tax												5,497		5,497

Stock-based compensation expense								(1,844)						(1,844)
Common stock issued upon settlement of stock-based compensation					50	—		5,257						5,257
Shares withheld related to net share settlement of stock-based compensation					(3)	—		(873)						(873)
Repurchase of common stock, including excise tax					(1,128)	(4)		(2,729)		(278,500)				(281,233)
Balance as of August 3, 2025	5,116	5,116	$	—	113,828	$	570	$	632,375	$	4,085,559	$	(331,225)	$	4,387,279


	Quarter Ended July 28, 2024
	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 April 28, 2024	5,116	5,116	$	—	120,470	$	602	$	570,286	$	3,944,000	$	(295,080)	$	4,219,808
Net income										392,922				392,922
Other comprehensive income (loss), net of tax												(14,737)		(14,737)

Stock-based compensation expense								21,567						21,567
Common stock issued upon settlement of stock-based compensation					24	—		2,370						2,370
Shares withheld related to net share settlement of stock-based compensation					(2)	—		(829)						(829)
Repurchase of common stock, including excise tax					(1,882)	(9)		(4,238)		(585,209)				(589,456)
Balance as of July 28, 2024	5,116	5,116	$	—	118,610	$	593	$	589,156	$	3,751,713	$	(309,817)	$	4,031,645


	Two Quarters Ended August 3, 2025
	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 February 2, 2025	5,116	5,116	$	—	116,166	$	581	$	638,190	$	4,109,717	$	(424,441)	$	4,324,047
Net income										685,477				685,477
Other comprehensive income (loss), net of tax												93,216		93,216

Stock-based compensation expense								21,247						21,247
Common stock issued upon settlement of stock-based compensation					245	—		5,478						5,478
Shares withheld related to net share settlement of stock-based compensation					(92)	—		(26,514)						(26,514)
Repurchase of common stock, including excise tax					(2,491)	(11)		(6,026)		(709,635)				(715,672)
Balance as of August 3, 2025	5,116	5,116	$	—	113,828	$	570	$	632,375	$	4,085,559	$	(331,225)	$	4,387,279


	Two Quarters Ended July 28, 2024
	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 28, 2024	5,116	5,116	$	—	121,106	$	606	$	575,369	$	3,920,362	$	(264,256)	$	4,232,081
Net income										714,343				714,343
Other comprehensive income (loss), net of tax												(45,561)		(45,561)

Stock-based compensation expense								47,325						47,325
Common stock issued upon settlement of stock-based compensation					224	—		5,763						5,763
Shares withheld related to net share settlement of stock-based compensation					(87)	—		(33,371)						(33,371)
Repurchase of common stock, including excise tax					(2,633)	(13)		(5,930)		(882,992)				(888,935)
Balance as of July 28, 2024	5,116	5,116	$	—	118,610	$	593	$	589,156	$	3,751,713	$	(309,817)	$	4,031,645


Note 1	Nature of Operations and Basis of Presentation	9
Note 2	Recent Accounting Pronouncements	9

Note 3	Revolving Credit Facilities	10
Note 4	Supply Chain Financing Program	11
Note 5	Stock-Based Compensation and Benefit Plans	11
Note 6	Fair Value Measurement	12
Note 7	Derivative Financial Instruments	13
Note 8	Earnings Per Share	15
Note 9	Supplementary Financial Information	16
Note 10	Segmented Information	17
Note 11	Disaggregated Net Revenue	19
Note 12	Legal Proceedings and Other Contingencies	19


	Stock Options			Performance-Based Restricted Stock Units			Restricted Shares			Restricted Stock Units
	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
	(In thousands, except per share amounts)
Balance as of February 2, 2025	849	$	314.27	177	$	371.83	5	$	317.86	239	$	371.09
Granted	299	282.41		160	310.81		6	252.28		180	281.85
Exercised/released	43	134.57		100	373.03		5	317.86		97	371.56
Forfeited/expired	44	340.51		7	346.90		—	—		20	331.31
Balance as of August 3, 2025	1,061	$	311.49	230	$	329.71	6	$	252.28	302	$	320.42
Exercisable as of August 3, 2025	503	$	294.65


	First Two Quarters
	2025
Expected term	4.00 years
Expected volatility	38.70	%
Risk-free interest rate	4.00	%
Dividend yield	—	%


	August 3, 2025		Level 1		Level 2		Level 3		Balance Sheet Classification
	(In thousands)
Money market funds	$	107,601	$	107,601	$	—	$	—	Cash and cash equivalents


Forward currency contract assets	714		—		714		—		Prepaid expenses and other current assets
Forward currency contract liabilities	4,895		—		4,895		—		Other current liabilities


	August 3, 2025						February 2, 2025
	Gross Notional		Assets		Liabilities		Gross Notional		Assets		Liabilities
	(In thousands)
Derivatives designated as net investment hedges:
Forward currency contracts	$	1,209,000	$	—	$	2,701	$	1,969,000	$	74,908	$	—
Derivatives not designated in a hedging relationship:
Forward currency contracts	1,460,764		714		2,194		2,167,657		1,940		74,638
Net derivatives recognized on consolidated balance sheets:
Forward currency contracts			$	714	$	4,895			$	76,848	$	74,638


	Second Quarter				First Two Quarters
	2025		2024		2025		2024
	(In thousands)
Gains (losses) recognized in selling, general and administrative expenses:
Foreign currency exchange gains (losses)	$	5,280	$	15,836	$	(67,998)	$	30,771
Derivatives not designated in a hedging relationship	(3,837)		(14,711)		59,231		(29,038)
Net foreign currency exchange and derivative gains (losses)	$	1,443	$	1,125	$	(8,767)	$	1,733


	August 3, 2025		February 2, 2025
	(In thousands)
Inventories:
Inventories, at cost	$	1,823,547	$	1,526,055
Inventory provisions and reserves	(100,977)		(83,974)
	$	1,722,570	$	1,442,081
Prepaid expenses and other current assets:
Prepaid expenses	$	162,710	$	147,680
Forward currency contract assets	714		76,848
Other current assets	24,455		26,931
	$	187,879	$	251,459
Property and equipment, net:
Land	$	78,421	$	74,461
Buildings	28,588		27,655
Leasehold improvements	1,302,612		1,227,247
Furniture and fixtures	187,812		177,651
Computer hardware	212,321		202,479
Computer software	1,419,354		1,274,322
Equipment and vehicles	55,780		51,453
Work in progress	289,926		206,398
Property and equipment, gross	3,574,814		3,241,666
Accumulated depreciation	(1,657,453)		(1,461,049)
	$	1,917,361	$	1,780,617
Other non-current assets:
Cloud computing arrangement implementation costs	$	176,358	$	161,759
Security deposits	55,604		44,076
Other	36,747		32,006
	$	268,709	$	237,841


	August 3, 2025		February 2, 2025
	(In thousands)
Accrued liabilities and other:
Accrued operating expenses	$	156,144	$	166,745
Forward currency contract liabilities	4,895		74,638
Sales return allowances	50,844		73,892
Accrued freight	38,119		53,121
Accrued duty	56,121		45,400
Accrued digital marketing	28,141		45,392
Accrued capital expenditures	30,176		36,690
Accrued rent	16,519		17,962
Sales tax collected	17,154		16,967
Other	25,820		28,656
	$	423,933	$	559,463


	Second Quarter 2025
	Americas		China Mainland		Rest of World		Total Segments		Corporate(1)		Total
	(In thousands)
Net revenue	$	1,758,217	$	392,898	$	374,104	$	2,525,219	$	—	$	2,525,219
Product costs(2)	515,473		92,219		108,449		716,141		—		716,141
Other cost of sales(2)	158,390		51,139		63,200		272,729		59,147		331,876
Selling, general and administrative expenses	464,960		97,050		121,212		683,222		268,436		951,658
Amortization of intangible assets	—		—		—		—		1,730		1,730
Income from operations	$	619,394	$	152,490	$	81,243	$	853,127	$	(329,313)	$	523,814
Other income (expense), net											9,737
Income before income tax expense											$	533,551

Supplemental information:
Depreciation and amortization(3)	$	54,499	$	8,871	$	8,574	$	71,944	$	47,771	$	119,715


	Second Quarter 2024
	Americas		China Mainland		Rest of World		Total Segments		Corporate(1)		Total
	(In thousands)
Net revenue	$	1,741,433	$	314,189	$	315,456	$	2,371,078	$	—	$	2,371,078
Product costs(2)	493,895		71,547		90,860		656,302		—		656,302
Other cost of sales(2)	150,458		46,084		51,891		248,433		54,158		302,591
Selling, general and administrative expenses	427,653		77,473		98,705		603,831		268,128		871,959

Income from operations	$	669,427	$	119,085	$	74,000	$	862,512	$	(322,286)	$	540,226
Other income (expense), net											17,994
Income before income tax expense											$	558,220

Supplemental information:
Depreciation and amortization(3)	$	47,824	$	7,762	$	7,407	$	62,993	$	40,580	$	103,573


	First Two Quarters 2025
	Americas		China Mainland		Rest of World		Total Segments		Corporate(1)		Total
	(In thousands)
Net revenue	$	3,432,775	$	760,999	$	702,105	$	4,895,879	$	—	$	4,895,879
Product costs(2)	996,293		174,034		198,713		1,369,040		—		1,369,040
Other cost of sales(2)	315,037		101,412		121,671		538,120		128,391		666,511
Selling, general and administrative expenses	912,720		179,428		227,622		1,319,770		574,759		1,894,529
Amortization of intangible assets	—		—		—		—		3,360		3,360
Income from operations	$	1,208,725	$	306,125	$	154,099	$	1,668,949	$	(706,510)	$	962,439
Other income (expense), net											21,523
Income before income tax expense											$	983,962

Supplemental information:
Depreciation and amortization(3)	$	105,940	$	17,447	$	17,286	$	140,673	$	93,571	$	234,244


	First Two Quarters 2024
	Americas		China Mainland		Rest of World		Total Segments		Corporate(1)		Total
	(In thousands)
Net revenue	$	3,363,697	$	617,975	$	598,297	$	4,579,969	$	—	$	4,579,969
Product costs(2)	976,190		140,222		170,934		1,287,346		—		1,287,346
Other cost of sales(2)	297,635		93,592		99,633		490,860		114,510		605,370
Selling, general and administrative expenses	855,605		145,298		187,049		1,187,952		526,433		1,714,385

Income from operations	$	1,234,267	$	238,863	$	140,681	$	1,613,811	$	(640,943)	$	972,868
Other income (expense), net											41,277
Income before income tax expense											$	1,014,145

Supplemental information:
Depreciation and amortization(3)	$	92,150	$	15,787	$	13,913	$	121,850	$	77,482	$	199,332


	Second Quarter 2025						First Two Quarters 2025
	Change		Foreign exchange changes		Change in constant dollars		Change		Foreign exchange changes		Change in constant dollars
Net Revenue
Americas	1	%	—	%	1	%	2	%	1	%	3	%
China Mainland	25		(1)		24		23		—		23
Rest of World	19		(4)		15		17		(1)		16
Total net revenue	7	%	(1)	%	6	%	7	%	—	%	7	%

Comparable sales(1)
Americas	(4)	%	1	%	(3)	%	(3)	%	1	%	(2)	%
China Mainland	17		(1)		16		12		—		12
Rest of World	12		(3)		9		9		(1)		8
Total comparable sales	1	%	—	%	1	%	1	%	—	%	1	%


Number of company-operated stores by market	August 3, 2025	February 2, 2025
United States	377	374
Canada	72	71
Mexico	18	17
Americas	467	462

China Mainland	159	151

Australia	33	33
South Korea	20	20
Hong Kong SAR	10	10
Japan	10	10
Singapore	9	7
New Zealand	8	8
Taiwan	8	8
Malaysia	5	5
Thailand	4	4
Macau SAR	2	2
APAC	109	107

United Kingdom	20	19
Germany	9	9
France	6	6
Ireland	4	4
Spain	3	3
Netherlands	2	2
Sweden	2	2
Italy	1	—
Norway	1	1
Switzerland	1	1
EMEA	49	47

Total company-operated stores	784	767


Number of retail locations operated by third parties by market	August 3, 2025	February 2, 2025
United Arab Emirates	11	10
Saudi Arabia	9	8
Israel	8	7
Kuwait	4	4
Qatar	4	4
Turkey	2	—
Bahrain	1	1
Belgium	1	—
Denmark	1	—
Total locations operated by third parties under license and supply arrangements	41	34


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)
May 5, 2025 - June 1, 2025	180,717	$	304.76	180,717	$	1,082,380,882
June 2, 2025 - July 6, 2025	401,456	248.71		401,456	982,534,864
July 7, 2025 - August 3, 2025	545,785	226.51		545,785	858,910,584
Total	1,127,958			1,127,958


						lululemon athletica inc.

By:						/s/ MEGHAN FRANK
						Meghan Frank
						Chief Financial Officer
						(principal financial and accounting officer)


			By:						/s/ CALVIN MCDONALD
									Calvin McDonald
									Chief Executive Officer and Director
									(principal executive officer)