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lululemon athletica inc. - Annual Report: 2025 (Form 10-K)

Net RevenueAmericas4 %— %4 %China Mainland41 2 43 Rest of World27 2 29 Total net revenue10 %1 %11 %
Comparable sales(1)
Americas(1)%— %(1)%China Mainland25 2 27 Rest of World19 1 20 Total comparable sales4 %— %4 %
__________
(1)Comparable sales includes comparable company-operated store and e-commerce net revenue.
Adjusted Financial Measures
The following table reconciles the most directly comparable measures calculated in accordance with GAAP with the adjusted financial measures for 2023. The adjustments relate to certain inventory provisions, asset impairments, and restructuring costs recognized in relation to lululemon Studio and their related tax effects. Please refer to Note 9. Impairment of Goodwill and Other Assets, Restructuring Costs included in Item 8 of Part II of this report for further information on the nature of these amounts. There were no adjusted financial measures for 2024.
2023
Gross ProfitGross MarginIncome from OperationsOperating MarginIncome Tax ExpenseEffective Tax RateNet IncomeDiluted Earnings Per Share
(In thousands, except per share amounts)
GAAP results$5,609,405 58.3 %$2,132,676 22.2 %$625,545 28.8 %$1,550,190 $12.20 
lululemon Studio charges:
lululemon Studio obsolescence provision23,709 0.3 23,709 0.2 23,709 0.19 
Impairment of assets44,186 0.5 44,186 0.35 
Restructuring costs30,315 0.3 30,315 0.24 
Tax effect of the above26,085 (0.1)(26,085)(0.21)
23,709 0.3 98,210 1.0 26,085 (0.1)72,125 0.57 
Adjusted results (non-GAAP)$5,633,114 58.6 %$2,230,886 23.2 %$651,630 28.7 %$1,622,315 $12.77 
Liquidity and Capital Resources
Our primary sources of liquidity are our current balances of cash and cash equivalents, cash flows from operations, and capacity under our committed revolving credit facility, including to fund short-term working capital requirements. Our primary cash needs are capital expenditures for opening new stores and remodeling or relocating existing stores, investing in our distribution centers, investing in technology and making system enhancements, funding working capital requirements, and making other strategic capital investments. We may also use cash to repurchase shares of our common stock. Cash and cash equivalents in excess of our needs are held in interest bearing accounts with financial institutions, as well as in money market funds and term deposits.
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The following table summarizes our net cash flows provided by and used in operating, investing, and financing activities for the periods indicated:
 20242023Year over year change
 (In thousands)
Total cash provided by (used in):
Operating activities$2,272,713 $2,296,164 $(23,451)
Investing activities(798,174)(654,132)(144,042)
Financing activities(1,652,508)(548,828)(1,103,680)
Effect of foreign currency exchange rate changes on cash and cash equivalents(81,666)(4,100)(77,566)
Increase (decrease) in cash and cash equivalents$(259,635)$1,089,104 $(1,348,739)
Operating Activities
Net income increased $264.4 million. The decrease in cash provided by operating activities was primarily as a result of a decrease in cash flows from changes in operating assets and liabilities of $251.1 million, primarily driven by changes in accounts payable, inventories, accrued compensation, and other assets, partially offset by changes in income taxes and accrued liabilities. The decrease in cash provided by operating activities was also a result of changes in impairment and other charges recognized in relation to lululemon Studio in 2023, and lower cash inflows related to derivatives, partially offset by increased deferred incomes taxes and depreciation.
Investing Activities
The increase in cash used in investing activities was primarily due to the acquisition of the lululemon branded retail locations and operations run by a third party in Mexico. Please refer to Note 6. Acquisition included in Item 8 of Part II of this Annual Report on Form 10-K for further information. The increase in cash used in investing activities was also due to increased capital expenditures primarily due to an increase in supply chain infrastructure, company-operated stores expenditures, and system initiatives, partially offset by a decrease in corporate infrastructure capital expenditures. The increase in cash used in investing activities was partially offset by the settlement of net investment hedges.
Financing Activities
The increase in cash used in financing activities was primarily the result of an increase in our stock repurchases. During 2024, we repurchased 5.1 million shares at a total cost including commissions and excise taxes of $1.6 billion. During 2023, we repurchased 1.5 million shares at a total cost including commissions and excise taxes of $558.7 million. The common stock was repurchased in the open market at prevailing market prices, including under plans complying with the provisions of Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934, with the timing and actual number of shares repurchased depending upon market conditions, eligibility to trade, and other factors.
Liquidity Outlook
We believe our cash and cash equivalent balances, cash generated from operations, and borrowings available to us under our committed revolving credit facility will be adequate to meet our liquidity needs and capital expenditure requirements for at least the next 12 months. Our cash from operations may be negatively impacted by a decrease in demand for our products as well as the other factors described in "Item 1A. Risk Factors". In addition, we may make discretionary capital improvements with respect to our stores, distribution facilities, headquarters, or systems, or we may repurchase shares under an approved stock repurchase program, which we would expect to fund through the use of cash, issuance of
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debt or equity securities or other external financing sources to the extent we were unable to fund such expenditures out of our cash and cash equivalents and cash generated from operations.
The following table includes certain measures of our liquidity:
February 2, 2025
(In thousands)
Cash and cash equivalents$1,984,336 
Working capital(1) excluding cash and cash equivalents
156,336 
Capacity under committed revolving credit facility393,935 
__________
(1)Working capital is calculated as current assets of $4.0 billion less current liabilities of $1.8 billion.
Capital expenditures are expected to range between $740.0 million and $760.0 million in 2025.
Our current commitments with respect to inventory purchases are included within our purchase obligations outlined below. The timing and cost of our inventory purchases will vary depending on a variety of factors such as revenue growth, assortment and purchasing decisions, product costs including freight and duty, and the availability of production capacity and speed. Our inventory balance as of February 2, 2025 was $1.4 billion, an increase of 9% from January 28, 2024. We expect that our inventories will continue to grow in 2025, and we expect the growth rate will exceed net revenue growth in 2025.
Our existing Americas credit facility provides for $400.0 million in commitments under an unsecured five-year revolving credit facility. The credit facility has a maturity date of December 14, 2026. As of February 2, 2025, aside from letters of credit of $6.1 million, we had no other borrowings outstanding under this credit facility. Further information regarding our credit facilities and associated covenants is outlined in Note 12. Revolving Credit Facilities included in Item 8 of Part II of this report.
Contractual Obligations and Commitments
Leases. We lease certain store and other retail locations, distribution centers, offices, and equipment under non-cancellable operating leases. Our leases generally have initial terms of between two and 15 years, and generally can be extended in increments between two and five years, if at all. The following table details our future minimum lease payments. Minimum lease commitments exclude variable lease expenses including contingent rent payments, common area maintenance, property taxes, and landlord's insurance.
Purchase obligations. The amounts listed for purchase obligations in the table below represent agreements (including open purchase orders) to purchase products and for other expenditures in the ordinary course of business that are enforceable and legally binding and that specify all significant terms. In some cases, values are subject to change, such as for product purchases throughout the production process. The reported amounts exclude liabilities included in our consolidated balance sheets as of February 2, 2025.
The following table summarizes our contractual arrangements due by fiscal year as of February 2, 2025, and the timing and effect that such commitments are expected to have on our liquidity and cash flows in future periods:
 Total20252026202720282029Thereafter
 
(In thousands)
Operating leases (minimum rent)$1,845,624 $336,521 $314,027 $299,214 $243,199 $182,854 $469,809 
Purchase obligations803,579 725,155 22,982 16,807 25,635 13,000 — 
Gain on disposal of assets  ()Income from operations   Other income (expense), net   Income before income tax expense   Income tax expense   Net income$ $ $ Other comprehensive income (loss), net of tax:Foreign currency translation adjustment$()$()$()Net investment hedge gains (losses)   Other comprehensive income (loss), net of tax()()()Comprehensive income$ $ $ Basic earnings per share$ $ $ Diluted earnings per share$ $ $ Basic weighted-average number of shares outstanding   Diluted weighted-average number of shares outstanding   
See accompanying notes to the consolidated financial statements
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lululemon athletica inc.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY 
(Amounts in thousands)
 
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 30, 2022  $  $ $ $ $()$ 
Net income  
Other comprehensive income (loss), net of tax()()
Common stock issued upon exchange of exchangeable shares()()—  — — — 
Stock-based compensation expense  
Common stock issued upon settlement of stock-based compensation    
Shares withheld related to net share settlement of stock-based compensation()— ()()
Repurchase of common stock, including excise tax
()()()()()
Balance as of January 29, 2023  $  $ $ $ $()$ 
Net income  
Other comprehensive income (loss), net of tax()()
Stock-based compensation expense  
Common stock issued upon settlement of stock-based compensation    
Shares withheld related to net share settlement of stock-based compensation()— ()()
Repurchase of common stock, including excise tax
()()()()()
Balance as of January 28, 2024  $  $ $ $ $()$ 
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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
Net income  
Other comprehensive income (loss), net of tax()()
lululemon Studio obsolescence provision
During 2022, the change in strategy related to lululemon Studio to focus on digital app-based services meant the Company no longer expected to be able to sell all of the lululemon Studio hardware inventory above cost and it recognized an obsolescence provision of $ million. The net realizable value was determined based on hardware sales forecasts and assumptions regarding liquidation value.
As a result of the decision to cease selling the lululemon Studio Mirror in the third quarter of 2023, the Company recognized a further inventory obsolescence provision of $ million during 2023. The net realizable value of the lululemon Studio inventory was based on assumptions regarding liquidation value.
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million. The key assumptions used to estimate the fair value of the lululemon Studio reporting unit were the revenue growth rates, operating profit margins, and the discount rate. The fair value of the lululemon Studio reporting unit was a Level 3 fair value measurement.
As of January 29, 2023, the undiscounted cash flows of the lululemon Studio asset group to which the intangible assets belonged were less than their carrying value, and therefore the Company calculated the fair value of the asset group, which was also less than its carrying value. This resulted in impairment of intangible assets of $ million relating to the MIRROR brand, which was associated with in-home hardware, and to the customer relationship intangible assets that were recognized as part of the acquisition.
During 2023, as a result of the Company's decision to no longer produce digital fitness content and to cease the sale of the lululemon Studio Mirror, the Company performed impairment testing for the lululemon Studio asset group as of October 29, 2023. The undiscounted cash flows of the lululemon Studio asset group were less than their carrying value, and therefore the Company calculated the fair value of the asset group, which was also less than its carrying value.
As a result of the impairment test, the Company recognized asset impairments totaling $ million during 2023. The fair value of long-lived assets was based on a discounted cash flow model, and is a Level 3 non-recurring fair value measurement. The key assumptions used to estimate the fair value were subscriber churn rates and operating costs.
Restructuring costs
million for lululemon Studio primarily related to contract termination costs, employee severance costs, and professional fees.
Note 10.
 $ Security deposits  Other   Other non-current assets$ $ 
As of February 2, 2025 and January 28, 2024, cloud computing arrangement implementation costs consisted of deferred costs of $ million and $ million, respectively, and associated accumulated amortization of $ million and $ million, respectively.
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Note 11.
 $ Forward currency contract liabilities  Sales return allowances  Accrued freight  Accrued duty  Accrued digital marketing  Accrued capital expenditures  Accrued rent  Sales tax collected  Other  Accrued liabilities and other$ $ 
Note 12.
 million in commitments under an unsecured revolving credit facility. The credit facility has a maturity date of December 14, 2026. Borrowings under the credit facility may be prepaid and commitments may be reduced or terminated without premium or penalty (other than customary breakage costs).
As of February 2, 2025, aside from letters of credit of $ million, the Company had other borrowings outstanding under this credit facility.
Borrowings made under the credit facility bear interest at a rate per annum equal to, at the Company's option, either (a) a rate based on the Secured Overnight Financing Rate as administered by the Federal Reserve Bank of New York ("SOFR"), or (b) an alternate base rate, plus, in each case, an applicable margin. The applicable margin is determined by reference to a pricing grid, based on the ratio of indebtedness to earnings before interest, tax, depreciation, amortization, and rent ("EBITDAR") and ranges between %-% for SOFR loans and %-% for alternate base rate or Canadian prime rate loans. Additionally, a commitment fee of between %-%, also determined by reference to the pricing grid, is payable on the average daily unused amounts under the credit facility.
The applicable interest rates and commitment fees are subject to adjustment based on certain sustainability key performance indicators ("KPIs"). The two KPIs are based on greenhouse gas emissions intensity reduction and gender pay equity, and the Company's performance against certain targets measured on an annual basis could result in positive or negative sustainability rate adjustments of basis points to its drawn pricing and positive or negative sustainability fee adjustments of basis points to its undrawn pricing.
The credit agreement contains negative covenants that, among other things and subject to certain exceptions, limit the ability of the Company's subsidiaries to incur indebtedness, incur liens, undergo fundamental changes, make dispositions of all or substantially all of their assets, alter their businesses and enter into agreements limiting subsidiary dividends and distributions.
The Company's financial covenants include maintaining an operating lease adjusted leverage ratio of not greater than :1.00 and the ratio of consolidated EBITDAR to consolidated interest charges (plus rent) of not less than :1.00. The credit agreement also contains certain customary representations, warranties, affirmative covenants, and events of default (including, among others, an event of default upon the occurrence of a change of control). If an event of default occurs, the credit agreement may be terminated, and the maturity of any outstanding amounts may be accelerated. As of February 2, 2025, the Company was in compliance with the covenants of the credit facility.
China Mainland revolving credit facility
The Company has an uncommitted and unsecured  million Chinese Yuan ($ million) revolving credit facility with terms that are reviewed on an annual basis. It is comprised of a revolving loan of up to  million Chinese Yuan ($
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 million Chinese Yuan ($ million), or its equivalent in another currency. Loans are available for a period not to exceed months, at an interest rate equal to the loan prime rate plus a spread of %. The Company is required to follow certain covenants. As of February 2, 2025, the Company was in compliance with the covenants and, aside from letters of credit of million Chinese Yuan ($ million), there were other borrowings or guarantees outstanding under this credit facility.
Note 13.
 $ Amounts added during the year  Amounts settled during the year()()Supply chain financing program balance, end of year$ $ 
Note 14.
vote for each share held. The special voting shares are not entitled to receive dividends or distributions or receive any consideration in the event of a liquidation, dissolution, or wind-up. To the extent that exchangeable shares as described below are exchanged for common stock, a corresponding number of special voting shares will be cancelled without consideration.
The holders of the exchangeable shares have dividend and liquidation rights equivalent to those of holders of the common shares of the Company. The exchangeable shares can be converted on a for one basis by the holder at any time into common shares of the Company plus a cash payment for any accrued and unpaid dividends. Holders of exchangeable shares are entitled to the same or economically equivalent dividend as declared on the common stock of the Company. The exchangeable shares are non-voting. The Company has the right to convert the exchangeable shares into common shares of the Company at any time after the earliest of July 26, 2047, the date on which fewer than million exchangeable shares are outstanding, or in the event of certain events such as a change in control.
Note 15.
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vesting period and vest at a rate of % each year on the anniversary date of the grant. Stock options generally expire on the earlier of from the date of grant, or a specified period of time following termination. Performance-based restricted stock units issued generally vest from the grant date and restricted shares generally vest from the grant date. Restricted stock units granted generally have a vesting period and vest at a certain percentage each year on the anniversary date of the grant.
The Company issues previously unissued shares upon the exercise of Company options, vesting of performance-based restricted stock units or restricted stock units that are settled in common stock, and granting of restricted shares.
Stock-based compensation expense charged to income for the plans was $ million, $ million, and $ million for 2024, 2023, and 2022, respectively.
Total unrecognized compensation cost for all stock-based compensation plans was $ million as of February 2, 2025, which is expected to be recognized over a weighted-average period of years, and was $ million as of January 28, 2024 over a weighted-average period of years.
 $  $  $  $ Granted        Exercised/vested        Forfeited/expired        Balance as of January 29, 2023 $  $  $  $ Granted        Exercised/vested        Forfeited/expired        Balance as of January 28, 2024 $  $  $  $ Granted        Exercised/vested        Forfeited/expired        Balance as of February 2, 2025 $  $  $  $ 
A total of million shares of the Company's common stock have been authorized for future issuance under the Company's 2023 Equity Incentive Plan.
The Company's performance-based restricted stock units are awarded to eligible employees and entitle the grantee to receive a maximum of  shares of common stock per performance-based restricted stock unit if the Company achieves specified performance goals and the grantee remains employed during the vesting period. The fair value of performance-based restricted stock units is based on the closing price of the Company's common stock on the grant date. Expense for performance-based restricted stock units is recognized when it is probable that the performance goal will be achieved.
The grant date fair value of the restricted shares and restricted stock units is based on the closing price of the Company's common stock on the grant date.
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years years yearsExpected volatility % % %Risk-free interest rate % % %Dividend yield % % %-$ $  $ 
$-$
    
$-$
    
$-$
    
$-$
    

 $  $ 
Intrinsic value
$ $ 
As of February 2, 2025, the unrecognized compensation cost related to these options was $ million, which is expected to be recognized over a weighted-average period of years. The weighted-average grant date fair value of options granted during 2024, 2023, and 2022 was $, $, and $, respectively.
 $ $ Performance-based restricted stock units   Restricted shares   Restricted stock units   $ $ $ 
Employee share purchase plan
The Company has an Employee Share Purchase Plan ("ESPP"). Contributions are made by eligible employees, subject to certain limits defined in the ESPP, and the Company matches one-third of the contribution. The maximum number of shares authorized to be purchased under the ESPP is million shares. All shares purchased under the ESPP are purchased in the open market. During each of 2024, 2023, and 2022, there were million shares purchased. As of February 2, 2025, million shares remain authorized to be purchased under the ESPP.
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% to % of the contribution depending on the participant's length of service, and the contribution is subject to a vesting period. The Company's net expense for the defined contribution plans was $ million, $ million, and $ million during 2024, 2023, and 2022, respectively.
Note 16.
 $ $ $ Cash and cash equivalentsTerm deposits    Cash and cash equivalentsForward currency contract assets    Prepaid expenses and other current assetsForward currency contract liabilities    Other current liabilities
January 28, 2024Level 1Level 2Level 3Balance Sheet Classification
(In thousands)
Money market funds$ $ $ $ Cash and cash equivalents
Right-of-use lease assets()()
Unremitted foreign earnings()()
Other()()
Deferred income tax liabilities()()
Net deferred income tax liabilities$()$()
Balance sheet classification:
Deferred income tax assets$ $ 
Deferred income tax liabilities()()
Net deferred income tax liabilities$()$()
As of February 2, 2025, the Company had net operating loss carryforwards of $ million. The majority of the net operating loss carryforwards expire, if unused, between fiscal 2030 and fiscal 2044.
There was a $ million net increase in the valuation allowance in 2024, compared to a $ million net increase in 2023, and a $ million net decrease in 2022.
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Note 20.
 $ $ Basic weighted-average number of shares outstanding   Assumed conversion of dilutive stock options and awards   Diluted weighted-average number of shares outstanding   Basic earnings per share$ $ $ Diluted earnings per share$ $ $ 
The Company's calculation of weighted-average shares includes the common stock of the Company as well as the exchangeable shares. Exchangeable shares are the economic equivalent of common shares in all material respects. All classes of stock have in effect the same economic rights and share equally in undistributed net income. For 2024, 2023, and 2022, thousand, thousand, and thousand stock options and awards, respectively, were anti-dilutive to earnings per share and therefore have been excluded from the computation of diluted earnings per share.
On January 31, 2019, the Company's board of directors approved a stock repurchase program for up to $ million of the Company's common shares. On December 1, 2020, it approved an increase in the remaining authorization from $ million to $ million, and on October 1, 2021, it approved an increase in the remaining authorization from $ million to $ million. During the first quarter of 2022, the Company completed the remaining stock repurchases under this program.
On March 23, 2022, the Company's board of directors approved a stock repurchase program for up to $ billion of the Company's common shares on the open market or in privately negotiated transactions. During the first quarter of 2024, the Company completed the remaining stock repurchases under this program.
On November 29, 2023, the Company's board of directors approved a stock repurchase program for up to $ billion of the Company's common shares on the open market or in privately negotiated transactions. On each of May 29, 2024 and December 3, 2024, the Company's board of directors approved an additional increase of $ billion to the existing stock repurchase program. The repurchase plan has no time limit and does not require the repurchase of a minimum number of shares. Common shares repurchased on the open market are at prevailing market prices, including under plans complying with the provisions of Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934. The timing and actual number of common shares to be repurchased will depend upon market conditions, eligibility to trade, and other factors, in accordance with Securities and Exchange Commission requirements. The authorized value of shares available to be repurchased under this program excludes the cost of commissions and excise taxes and as of February 2, 2025, the remaining authorized value was $ billion.
During 2024, 2023, and 2022, million, million, and million shares, respectively, were repurchased under the programs at a total cost including commissions and excise taxes of $ billion, $ million, and $ million, respectively.
million shares were repurchased at a total cost including commissions and excise taxes of $ million.
Note 21.
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licensed locations, including in the United Arab Emirates, in Saudi Arabia, in Israel, in Qatar, in Kuwait, and in Bahrain. On September 10, 2024, we acquired the lululemon branded retail locations and operations run by a third party in Mexico. We had previously granted the third party the right to operate retail locations and to sell lululemon products in Mexico. Please refer to Note 6. Acquisition for further information.
Contingencies
Legal proceedings. In addition to the legal proceedings described below, the Company is, from time to time, involved in routine legal matters, and audits and inspections by governmental agencies and other third parties which are incidental to the conduct of its business. This includes legal matters such as initiation and defense of proceedings to protect intellectual property rights, employment claims, product liability claims, personal injury claims, and similar matters. The Company believes the ultimate resolution of any such legal proceedings, audits, and inspections will not have a material adverse effect on its consolidated balance sheets, results of operations or cash flows. The Company has recognized immaterial provisions related to the expected outcome of legal proceedings.
On July 12, 2024, lululemon and its subsidiary, lululemon usa inc., were named as defendants in a putative consumer class action (Gyani v. Lululemon Athletica Inc., et al., No. 1:24-cv-22651-BB) in the United States District Court for the Southern District of Florida. On September 16, 2024, plaintiffs filed an amended complaint, asserting claims under the Florida Deceptive and Unfair Trade Practices Act, New York General Business Law, California Consumer Legal Remedies Act, California Unfair Competition Law, and for unjust enrichment based on statements by the Company relating to the sustainability and environmental impact of the Company's products and actions during the period October 28, 2020 to present. The amended complaint seeks monetary damages, as well as non-monetary relief such as an injunction to end the alleged unlawful practices. lululemon moved to dismiss the amended complaint, and on February 19, 2025, the Court granted lululemon's motion in full, dismissing the action without prejudice and without leave to amend.
On August 8, 2024, lululemon athletica inc. and certain officers of the Company were named as defendants in a purported securities class action (Patel v. Lululemon Athletica Inc., et al., No. 1:24-cv-06033) in the United States District Court for the Southern District of New York. On March 10, 2025, plaintiffs filed an amended complaint, asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegedly false and misleading public statements and omissions by Defendants during the period December 8, 2023 to July 24, 2024 relating to lululemon's business, product offerings, and inventory allocation that plaintiffs allege artificially inflated the Company’s stock price. The amended complaint currently seeks unspecified monetary damages. The Company intends to defend the action vigorously.
On November 4, 2024, November 8, 2024, November 12, 2024, November 18, 2024, and November 20, 2024, stockholder derivative complaints were filed against certain of the Company's officers, and all of the Company's directors as of that date in the United States Court for the Southern District of New York: Bhavsar v. McDonald et al., No. 1:24-cv-08405 (the "Bhavsar Action"); Muszynski v. McDonald et al., No. 1:24-cv-08507 (the "Muszynski Action"); Holtz v. McDonald et al., No. 1:24-cv-08572 (the "Holtz Action"); Wong v. McDonald et al., No. 1:24-cv-08752 (the "Wong Action"); and Kanaly v. McDonald et al, No. 1:24-cv-08839 (the "Kanaly Action," and collectively with the Bhavsar Action, the Muszynski Action, the Holtz Action, and the Wong Action, the "Derivative Actions."). The Kanaly Action additionally names certain of the Company's former directors. The Derivative Actions assert claims for (a) violating Sections 10(b), 14(a) and 20(a) of the Exchange Act, (b) breach of fiduciary duties, and (c) unjust enrichment and waste of corporate assets on allegations substantially similar to the allegations in the securities action complaint. The Bhavsar Action further asserts claims for abuse of control, gross mismanagement, and contribution under Sections 10(b) and 21D of the Exchange Act. The Wong Action also asserts a claim for contribution under Sections 10(b) and 21D of the Exchange Act. The Kanaly Action also asserts claims for gross mismanagement and aiding and abetting breach of fiduciary duty. The Wong Action and the Kanaly Action further bring claims based on allegedly false and misleading public statements and omissions during the period October 28, 2020 to March 21, 2024 relating to lululemon's "IDEA" program. The complaints seek monetary damages, equitable relief, and attorneys' fees and costs on behalf of the Company, as well as an order directing certain governance reforms.
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Note 22.
 $ $ Cash paid for amounts included in the measurement of lease liabilities   Leased assets obtained in exchange for new operating lease liabilities   Interest paid   
Note 23.
segments: Americas, China Mainland, and Rest of World, which is comprised of its non-significant operating segments APAC and EMEA reported on a combined basis.  $ $ $ $ $ 
Product costs(2)
      
Other cost of sales(2)
      Selling, general and administrative expenses      Amortization of intangible assets      Income from operations$ $ $ $ $()$ Other income (expense), net Income before income tax expense$ Supplemental information:
Depreciation and amortization(3)
$ $ $ $ $ $ 
2023

Americas
China Mainland
Rest of World
Total Segments
Corporate(1)
Total
(In thousands)
Net revenue$ $ $ $ $ $ 
Product costs(2)
      
Other cost of sales(2)
      
Selling, general and administrative expenses      
Impairment of assets and restructuring costs      
Amortization of intangible assets      
Income from operations$ $ $ $ $()$ 
Other income (expense), net 
Income before income tax expense$ 
Supplemental information:
Depreciation and amortization(3)
$ $ $ $ $ $ 
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 $ $ $ $ $ 
Product costs(2)
      
Other cost of sales(2)
      Selling, general and administrative expenses      Impairment of goodwill and other assets      Amortization of intangible assets      Gain on disposal of assets    ()()Income from operations$ $ $ $ $()$ Other income (expense), net Income before income tax expense$ Supplemental information:
Depreciation and amortization(3)
$ $ $ $ $ $ 
__________
(1)Corporate includes centrally managed support functions including product design, raw material development, product innovation, sourcing, supply chain, and global merchandising which are included in other cost of sales. Administrative corporate expenses include technology, brand and marketing, finance, human resources, legal, and other head office costs. An inventory obsolescence provision in relation to lululemon Studio of $ million and $ million in 2023 and 2022, respectively, is included within product costs.
(2)Please refer to Note 2. Summary of Significant Accounting Policies "Cost of goods sold" for a definition of product costs and other cost of sales.
(3)The amounts of depreciation and amortization disclosed by reportable segment are included within other cost of sales and selling, general and administrative expenses.


 $ Canada  People's Republic of China  Other geographic areas  $ $ 
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Note 24.
 $ $ Canada   Mexico   Americas   China Mainland   
Hong Kong SAR, Taiwan, and Macau SAR
   People's Republic of China   Other geographic areas   $ $ $ 
The following table disaggregates the Company's net revenue by category. Other categories is primarily composed of accessories, footwear, and lululemon Studio.
202420232022
(In thousands)
Women's product$ $ $ 
Men's product   
Other categories   
$ $ $ 
The following table disaggregates the Company's net revenue by channel.
202420232022
(In thousands)
Company-operated stores$ $ $ 
E-commerce   
Other channels   
$ $ $ 
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of the end of the period covered by this report, or the Evaluation Date. Based upon the evaluation, our principal executive officer and principal financial and accounting officer concluded that our disclosure controls and procedures were effective as of the Evaluation Date. Disclosure controls and procedures are controls and procedures designed to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this report, is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include controls and procedures designed to reasonably ensure that such information is accumulated and communicated to our management, including our principal executive officer and principal financial and accounting officer, as appropriate to allow timely decisions regarding required disclosure.
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Inherent Limitations over Internal Controls
Our internal control over financial reporting is designed to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements. Management, including our principal executive officer and principal financial and accounting officer, does not expect that our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource limitations on all control systems; no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies and procedures may deteriorate.
Management's Annual Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. Based on this evaluation, management concluded that we maintained effective internal control over financial reporting as of February 2, 2025.
The effectiveness of our internal control over financial reporting as of February 2, 2025 has been audited by PricewaterhouseCoopers LLP, our independent registered public accounting firm, as stated in their report, which appears in Item 8 of Part II of this Form 10-K.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the fourth quarter of 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
Trading Arrangements
During the fourth quarter of 2024, no director or officer of lululemon (as defined in Rule 16a-1(f) under the Exchange Act) or a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (in each case, as defined in Item 408(a) of Regulation S-K).
Departure of Director
On March 25, 2025, Michael Casey notified us of his resignation as a director of lululemon and from all committees of our board of directors, effective June 12, 2025. Mr. Casey's decision to resign is not the result of any disagreement with us.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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PART III 
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
We have an insider trading policy, which governs the purchase, sale, and other dispositions of lululemon securities by our board of directors, officers, and other employees of lululemon or our subsidiaries, as well as members of their immediate families and households. It also applies to consultants or contractors who provide services to lululemon. We also follow guidelines for our stock repurchase programs. We believe that our insider trading policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to lululemon. The foregoing summary does not purport to be a complete description of our insider trading policy and is qualified in its entirety by reference to the full text of the lululemon Insider Trading Policy, a copy of which is filed as Exhibit 19.1 to this Annual Report on Form 10-K.
The remaining information required by this item concerning our directors, director nominees and Section 16 beneficial ownership reporting compliance is incorporated by reference to our definitive Proxy Statement for our 2025 Annual Meeting of Stockholders under the captions "Election of Directors," "Executive Officers," and "Corporate Governance," and, to the extent necessary, under the caption "Delinquent Section 16(a) Reports."
We have adopted a written code of business conduct and ethics, which applies to all of our directors, officers, and employees, including our principal executive officer and our principal financial and accounting officer. Our Global Code of Business Conduct and Ethics is available on our website, www.lululemon.com, and can be obtained by writing to Investor Relations, lululemon athletica inc., 1818 Cornwall Avenue, Vancouver, British Columbia, Canada V6J 1C7 or by sending an email to investors@lululemon.com. Information contained on or accessible through our websites is not incorporated into, and does not form a part of, this annual report or any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. Any amendments, other than technical, administrative, or other non-substantive amendments, to our Global Code of Business Conduct and Ethics or waivers from the provisions of the Global Code of Business Conduct and Ethics for our principal executive officer and our principal financial and accounting officer will be promptly disclosed on our website following the effective date of such amendment or waiver.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference to our 2025 Proxy Statement under the captions "Executive Compensation" and "Executive Compensation Tables."
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this item is incorporated by reference to our 2025 Proxy Statement under the caption "Principal Shareholders and Share Ownership by Management."
Equity Compensation Plan Information (as of February 2, 2025)
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 stockholders1,265,619 $314.27 7,754,029 
Equity compensation plans not approved by stockholders— — — 
Total1,265,619 $314.27 7,754,029 
__________
(1)This amount represents the following: (a) 849,003 shares subject to outstanding options, (b) 177,329 shares subject to outstanding performance-based restricted stock units, and (c) 239,287 shares subject to outstanding restricted stock units. The options, performance-based restricted stock units, and restricted stock units are all under our 2023 Equity Incentive Plan. Restricted shares outstanding under our 2023 Equity Incentive Plan have already been reflected in our total outstanding common stock balance.
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(2)The weighted-average exercise price is calculated solely on the exercise prices of the outstanding options and does not reflect the shares that will be issued upon the vesting of outstanding awards of performance-based restricted stock units and restricted stock units, which have no exercise price.
(3)This includes (a) 3,483,657 shares of our common stock available for future issuance under our 2023 Equity Incentive Plan and (b) 4,270,372 shares of our common stock available for future issuance under our Employee Share Purchase Plan. The number of shares remaining available for future issuance under our 2023 Equity Incentive Plan is reduced by 1.7 shares for each award other than stock options granted and by one share for each stock option award granted. Outstanding awards that expire or are canceled without having been exercised or settled in full are available for issuance again under our 2023 Equity Incentive Plan but shares that are withheld in satisfaction of tax withholding obligations for full value awards are not again available for issuance. No further awards may be issued under the predecessor plan, our 2014 Equity Incentive Plan.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this item is incorporated by reference to our 2025 Proxy Statement under the captions "Certain Relationships and Related Party Transactions" and "Corporate Governance."
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this item is incorporated by reference to our 2025 Proxy Statement under the caption "Fees for Professional Services."
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PART IV 
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE
(a) Documents filed as part of this report:
1. Financial Statements. The financial statements as set forth under Item 8 of this Annual Report on Form 10-K are incorporated herein.
2. Financial Statement Schedule. Separate financial statement schedules have been omitted either because they are not applicable or because the required information is included in the consolidated financial statements or notes described in Item 15(a)(1) above.
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3. Exhibits
Exhibit Index 
  Incorporated by Reference
Exhibit
No.		Exhibit TitleFiled
Herewith		FormExhibit No.File No.Filing Date
3.1

10-K
3.1
001-33608
3/21/2024
3.2

10-K
3.5
001-33608
3/28/2023
4.1S-34.1333-1858991/7/2013
4.210-K4.2001-336083/26/2020
10.1*
10-K
10.1
001-33608
3/21/2024
10.2*8-K10.2001-336086/13/2023
10.3*8-K10.3001-336086/13/2023
10.4*8-K10.4001-336086/13/2023
10.5*8-K10.5001-336086/13/2023
10.6*S-110.3333-1424775/1/2007
10.710-Q10.5001-336089/10/2007
10.810-Q10.6001-336089/10/2007
10.910-Q10.7001-336089/10/2007
10.10S-1/A10.14333-1424777/9/2007
10.11S-1/A10.16333-1424777/9/2007
10.12*
10-K
10.12
001-33608
3/21/2024
10.13*8-K

10.1

001-33608

3/29/2022
10.14*10-Q10.1001-336086/5/2024
10.15*10-K10.23001-336083/29/2017
10.16*10-Q10.1001-3360812/10/2020
10.17*8-K10.1001-336087/24/2018
10.18*10-Q10.2001-3360812/10/2020
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  Incorporated by Reference
Exhibit
No.		Exhibit TitleFiled
Herewith		FormExhibit No.File No.Filing Date
10.19*10-Q10.1 001-3360812/09/2021
10.20*10-K10.22001-336083/30/2021
10.218-K10.1001-3360812/17/2021
10.22
10-Q
10.1
001-33608
8/29/2024
10.23
10-Q
10.2
001-33608
8/29/2024
19.1
X
21.1
X
23.1X
31.1X
31.2X
32.1**X
978-K10.1001-336086/13/2023
101The following financial statements from the Company's 10-K for the fiscal year ended February 2, 2025, formatted in iXBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income, (iii) Consolidated Statements of Stockholders' Equity, (iv) Consolidated Statements of Cash Flows (v) Notes to the Consolidated Financial StatementsX
104Cover Page Interactive Data File (formatted in iXBRL and contained in Exhibit 101)X
*Denotes a compensatory plan, contract or arrangement, in which our directors or executive officers may participate.
**Furnished herewith.

ITEM 16. FORM 10-K SUMMARY
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
LULULEMON ATHLETICA INC.
By: /s/    CALVIN MCDONALD
  Calvin McDonald
 Chief Executive Officer
(principal executive officer)
Date:March 27, 2025
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Calvin McDonald and Meghan Frank and each of them, with full power of substitution and resubstitution and full power to act without the other, as his or her true and lawful attorney-in-fact and agent to act in his or her name, place and stead and to execute in the name and on behalf of each person, individually and in each capacity stated below, and to file, any and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing, ratifying and confirming all that said attorneys-in-fact and agents or any of them or their and his or her substitute or substitutes, may lawfully do or cause to be done by virtue thereof.
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Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
SignatureTitleDate
/s/    CALVIN MCDONALDChief Executive Officer and DirectorMarch 27, 2025
Calvin McDonald(principal executive officer)
/s/    MEGHAN FRANKChief Financial OfficerMarch 27, 2025
Meghan Frank(principal financial and accounting officer)
/s/    MARTHA A.M. MORFITTDirector, Board ChairMarch 27, 2025
Martha A.M. Morfitt
/s/    MICHAEL CASEYDirectorMarch 27, 2025
Michael Casey
/s/    SHANE GRANTDirectorMarch 27, 2025
Shane Grant
/s/    KATHRYN HENRYDirectorMarch 27, 2025
Kathryn Henry
/s/    TERI LISTDirectorMarch 27, 2025
Teri List
/s/    ALISON LOEHNISDirectorMarch 27, 2025
Alison Loehnis
/s/    ISABEL MAHEDirectorMarch 27, 2025
Isabel Mahe
/s/    JON MCNEILLDirectorMarch 27, 2025
Jon McNeill
/s/    DAVID M. MUSSAFERDirectorMarch 27, 2025
David M. Mussafer
/s/    EMILY WHITEDirectorMarch 27, 2025
Emily White
83

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