UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-33608 lululemon athletica inc. (Exact name of registrant as specified in its charter) Delaware 20-3842867 (State or other jurisd ...

lululemon athletica inc. (NASDAQ:LULU) Q4 2022 Earnings Conference Call March 28, 2023 4:30 PM ET Company Participants Howard Tubin - Vice President, Investor Relations Calvin McDonald - Chief Executive Officer Meghan Frank - Chief Financial Officer Conference Call Participants Adrienne Yih - Barclays Lorraine Hutchinson - Bank of America Brian Nagel - Oppenheimer Paul Lejuez - Citigroup Ike Boruchow - Wells Fargo Alex Straton - Morgan Stanley Rick Patel - Raymond James Dana Telsey - Telsey Advisory Gr ...

Part I - Business and Risk Factors [Business Overview](index=4&type=section&id=Item%201.%20Business) lululemon designs and retails athletic apparel and accessories via stores and e-commerce, focusing on product innovation, guest experience, and global expansion [Products and Market](index=4&type=section&id=1.1%20Products%20and%20Market) - The company offers a comprehensive line of performance apparel (pants, shorts, tops, jackets), footwear, and accessories under the lululemon brand, designed for activities like yoga, running, and training[10](index=10&type=chunk)[12](index=12&type=chunk) - lululemon Studio offers in-home connected fitness and content subscriptions to build its guest community[13](index=13&type=chunk) - The company is strategically focused on growing its men's product line and expanding internationally in the PRC, Asia Pacific, and Europe using a decentralized model[14](index=14&type=chunk)[15](index=15&type=chunk) [Operating Segments](index=6&type=section&id=1.2%20Operating%20Segments) Net Revenue by Segment (Fiscal 2022) | Segment | Percentage of Net Revenue | | :--- | :--- | | Company-Operated Stores | 45.0% | | Direct to Consumer | 45.6% | | Other | 9.4% | - The company operated **655 stores globally** at the end of fiscal 2022, an increase of **81 net new stores** from 574 in 2021, with **49 new international stores** outside North America[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk) - Sales per square foot for company-operated stores increased to **$1,580 in 2022** from $1,443 in 2021, indicating improved store performance[20](index=20&type=chunk) - The 'Other' segment includes outlets, wholesale, license and supply arrangements (26 licensed locations as of Jan 2023), the 'Like New' recommerce program, and lululemon Studio[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) [Sourcing and Manufacturing](index=10&type=section&id=1.3%20Sourcing%20and%20Manufacturing) - The company does not own any manufacturing facilities and relies on a limited number of third-party suppliers[32](index=32&type=chunk) Manufacturing and Sourcing Concentration (Fiscal 2022) | Category | Top 5 Concentration | Key Geographic Regions | | :--- | :--- | :--- | | **Product Manufacturing** | 56% (by 5 vendors) | Vietnam (39%), Cambodia (14%), Sri Lanka (12%) | | **Fabric Sourcing** | 56% (by 5 suppliers) | Taiwan (43%), China Mainland (19%), Sri Lanka (16%) | [Human Capital](index=11&type=section&id=1.4%20Human%20Capital) - The company's human capital strategy is guided by its 'Be Human' pillar, focusing on Inclusion, Diversity, Equity, and Action (IDEA), employee empowerment, and supply chain well-being[38](index=38&type=chunk) - As of January 29, 2023, women represented approximately **55% of the board of directors**, **65% of the senior executive leadership team**, and **75% of the overall workforce**[39](index=39&type=chunk) - The company employed approximately **34,000 people** as of fiscal year-end 2022, with an annual engagement survey showing an **83% participation rate** and a score exceeding the retail industry average[44](index=44&type=chunk) - The company's vision is to create transformative products and experiences that build meaningful connections, unlocking greater possibility and wellbeing for all[9](index=9&type=chunk) - Women's apparel is the largest product category, accounting for **65% of net revenue in 2022**, while North America is the largest geographical market, representing **84% of 2022 net revenue**[14](index=14&type=chunk)[15](index=15&type=chunk) [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including brand reputation damage, intense competition, supply chain vulnerabilities, cybersecurity threats, economic downturns, and evolving international trade and tax policies [Business and Industry Risks](index=15&type=section&id=1A.1%20Business%20and%20Industry%20Risks) - Success is highly dependent on maintaining the value and reputation of the lululemon brand, which could be harmed by negative publicity, product quality issues, or failure to protect intellectual property[52](index=52&type=chunk)[55](index=55&type=chunk) - The lululemon Studio hardware and software products introduce risks of design/manufacturing defects, which could lead to safety issues, product liability claims, and reputational damage[59](index=59&type=chunk) - The market is highly competitive, with pressure from established players like Nike and adidas, as well as new entrants, and competitors could imitate products as the company holds limited patents on fabrics and technology[60](index=60&type=chunk)[61](index=61&type=chunk)[63](index=63&type=chunk) - Failure to anticipate consumer preferences and introduce innovative products could lead to lower sales and excess inventory[65](index=65&type=chunk)[66](index=66&type=chunk) [Supply Chain Risks](index=22&type=section&id=1A.2%20Supply%20Chain%20Risks) - The company relies on a concentrated number of suppliers in the Asia Pacific region, with **56% of products** made by the top five vendors and **56% of fabrics** from the top five suppliers in 2022[84](index=84&type=chunk)[86](index=86&type=chunk) - Disruptions from political instability, public health crises, trade restrictions, or supplier instability could impair the ability to procure and distribute products[80](index=80&type=chunk)[81](index=81&type=chunk)[83](index=83&type=chunk) - Fluctuating costs of raw materials, such as petroleum-based synthetics and cotton, could increase cost of goods sold and negatively impact margins[90](index=90&type=chunk) [Technology and Security Risks](index=26&type=section&id=1A.3%20Technology%20and%20Security%20Risks) - The company is a target for cyber-attacks and security breaches, which could expose confidential customer and employee data, leading to litigation, financial liability, and brand damage[95](index=95&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk) - Compliance with evolving data privacy laws like GDPR (EU), CCPA (California), and PIPL (PRC) increases the compliance burden and risk of regulatory action[99](index=99&type=chunk) [Economic and Regulatory Risks](index=30&type=section&id=1A.4%20Economic%20and%20Regulatory%20Risks) - Economic downturns, inflation, or uncertainty may adversely affect consumer discretionary spending on the company's products[112](index=112&type=chunk)[113](index=113&type=chunk) - Changes in international trade policies, such as new tariffs or quotas, could increase costs, reduce supply, and harm the business[117](index=117&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk) - Changes in tax laws or adverse outcomes of tax audits could negatively impact the effective tax rate, with an expected increase in 2023 due to Canadian withholding taxes on unremitted earnings[122](index=122&type=chunk)[125](index=125&type=chunk) [Properties](index=40&type=section&id=Item%202.%20Properties) The company manages principal offices and distribution centers globally, with significant expansion of leased distribution capacity planned for 2023-2024 Principal Owned and Leased Properties (as of Jan 29, 2023) | Location | Use | Approx. Sq. Feet | Ownership | | :--- | :--- | :--- | :--- | | Groveport, OH, USA | Distribution Center | 310,000 | Owned | | Vancouver, BC, Canada | Executive/Admin Offices | 140,000 | Owned | | Delta, BC, Canada | Distribution Center | 375,000 | Leased | | Milton, ON, Canada | Distribution Center | 255,000 | Leased | | Mississauga, ON, Canada | Distribution Center | 250,000 | Leased | - Significant new distribution centers are being added: a **1,250,000 sq. ft. facility in Ontario, CA** (operational early fiscal 2024), a **250,000 sq. ft. facility in Ravenhall, VIC, Australia** (operational in 2023), and a **980,000 sq. ft. facility in Brampton, ON, Canada** (operational in fiscal 2024)[149](index=149&type=chunk)[150](index=150&type=chunk) Part II - Financial Information [Stockholder Matters and Equity Purchases](index=41&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) LULU common stock trades on Nasdaq, with the company not anticipating dividends but actively repurchasing shares under a $1.0 billion program - The company's stock (LULU) has significantly outperformed both the S&P 500 Index and the S&P 500 Apparel, Accessories & Luxury Goods Index over the five-year period ending January 29, 2023[153](index=153&type=chunk)[156](index=156&type=chunk) - A stock repurchase program of up to **$1.0 billion** was approved in March 2022, with **212,531 shares repurchased** during Q4 2022 under this program[163](index=163&type=chunk) - The company does not anticipate paying any cash dividends in the foreseeable future[155](index=155&type=chunk) [Management's Discussion and Analysis (MD&A)](index=44&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2022 saw 30% net revenue growth to $8.1 billion, but profitability was impacted by a $442.7 million lululemon Studio impairment, leading to a strategic shift and gross margin decline [Overview and Strategy](index=44&type=section&id=7.1%20Overview%20and%20Strategy) - The company launched its new 5-year growth plan, "Power of Three ×2," focusing on Product Innovation, Guest Experience, and Market Expansion[167](index=167&type=chunk) - Product innovation in 2022 included the launch of Senseknit fabric, new capsule collections for golf, tennis, and hiking, and the introduction of a women's footwear line[169](index=169&type=chunk) - The company faced weakening demand for its lululemon Studio (formerly MIRROR) in-home fitness hardware, leading to a strategic pivot towards a digital app-based service model[173](index=173&type=chunk) - Market expansion continued with **81 net new stores in 2022**, including **31 in the PRC** and the first locations in Spain, resulting in **North American revenue growth of 29%** and **international revenue growth of 35%**[175](index=175&type=chunk) [Financial Highlights (Fiscal 2022 vs. 2021)](index=45&type=section&id=7.2%20Financial%20Highlights) Key Financial Metrics (Fiscal 2022 vs. 2021) | Metric | 2022 (GAAP) | 2021 (GAAP) | Change | 2022 (Adjusted) | 2021 (Adjusted) | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Revenue | $8.1B | $6.3B | +30% | $8.1B | $6.3B | +30% | | Gross Margin | 55.4% | 57.7% | -230 bps | 56.2% | 57.7% | -150 bps | | Operating Margin | 16.4% | 21.3% | -490 bps | 22.1% | 22.0% | +10 bps | | Diluted EPS | $6.68 | $7.49 | -10.8% | $10.07 | $7.79 | +29.3% | - Adjustments for 2022 exclude a **$442.7 million post-tax impairment charge** for lululemon Studio and a gain on an asset sale, while 2021 adjustments exclude acquisition-related expenses[176](index=176&type=chunk) [Results of Operations](index=48&type=section&id=7.3%20Results%20of%20Operations) Net Revenue by Channel (Fiscal 2022 vs. 2021) | Channel | 2022 Revenue (in thousands) | 2021 Revenue (in thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Company-Operated Stores | $3,648,127 | $2,821,497 | +29.3% | | Direct to Consumer | $3,699,791 | $2,777,944 | +33.2% | | Other | $762,600 | $657,176 | +16.0% | | **Total Net Revenue** | **$8,110,518** | **$6,256,617** | **+29.6%** | - Gross margin decreased by **230 basis points**, primarily driven by a **$62.9 million (80 bps) inventory provision** for lululemon Studio hardware and a **150 bps decrease** from factors like higher markdowns and unfavorable FX rates[191](index=191&type=chunk)[193](index=193&type=chunk) - A pre-tax impairment charge of **$407.9 million** was recognized in Q4 2022 related to goodwill and other long-lived assets of the lululemon Studio business unit[198](index=198&type=chunk)[201](index=201&type=chunk) - The effective tax rate increased to **35.9% in 2022** from 26.9% in 2021, primarily due to non-deductible expenses related to the lululemon Studio impairment[210](index=210&type=chunk)[212](index=212&type=chunk) [Liquidity and Capital Resources](index=59&type=section&id=7.4%20Liquidity%20and%20Capital%20Resources) Cash Flow Summary (Fiscal 2022 vs. 2021) | Cash Flow Activity | 2022 (in thousands) | 2021 (in thousands) | | :--- | :--- | :--- | | Net cash from Operating Activities | $966,463 | $1,389,108 | | Net cash used in Investing Activities | ($569,937) | ($427,891) | | Net cash used in Financing Activities | ($467,487) | ($844,987) | - Cash from operating activities decreased primarily due to changes in working capital, including a significant increase in inventory[230](index=230&type=chunk) - The company ended fiscal 2022 with **$1.2 billion in cash and cash equivalents** and **$393.5 million available** under its revolving credit facility[234](index=234&type=chunk) - Capital expenditures are projected to be between **$660.0 million and $680.0 million** in fiscal 2023[235](index=235&type=chunk) - Inventory balance increased **50% to $1.4 billion** at year-end, driven by supply chain disruptions and strategic purchasing, with the growth rate expected to align with revenue growth in the second half of 2023[183](index=183&type=chunk)[235](index=235&type=chunk) [Critical Accounting Policies and Estimates](index=62&type=section&id=7.5%20Critical%20Accounting%20Policies%20and%20Estimates) - **Goodwill Impairment:** A full impairment of goodwill of **$362.5 million** was recognized for the lululemon Studio reporting unit as of January 29, 2023, triggered by lower-than-expected hardware sales, revised forecasts, and a strategic shift to digital app-based services[242](index=242&type=chunk) - **Intangible Asset Impairment:** An impairment of **$40.6 million** was recognized for lululemon Studio's brand and customer relationship intangible assets[243](index=243&type=chunk) - **Inventory Provisions:** A provision of **$62.9 million** was recorded against lululemon Studio hardware inventory, as the company no longer expects to sell all units above cost[246](index=246&type=chunk) - **Deferred Taxes:** The company has determined that **$1.3 billion** of its **$2.4 billion net investment** in Canadian subsidiaries is indefinitely reinvested, with a deferred tax liability of **$20.2 million** recognized for the portion not indefinitely reinvested[248](index=248&type=chunk)[249](index=249&type=chunk) [Market Risk Disclosures](index=66&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from foreign currency fluctuations, particularly USD/CAD, and inflationary pressures, while interest rate risk remains minimal - The company has significant exposure to foreign currency fluctuations, particularly between the U.S. and Canadian dollars, where a **10% appreciation in the USD against the CAD** would have reduced 2022 income from operations by an estimated **$30.9 million**[257](index=257&type=chunk) - The company uses forward currency contracts to hedge a portion of its net investment in its Canadian subsidiary and to manage revaluation risk on certain monetary assets and liabilities[256](index=256&type=chunk)[404](index=404&type=chunk) - Interest rate risk is currently low as the company had no borrowings outstanding under its **$400.0 million variable-rate revolving credit facility** as of January 29, 2023[260](index=260&type=chunk) - Inflationary factors, such as higher air freight costs in the first half of 2022 and increased wage rates, adversely affected operating results[263](index=263&type=chunk) [Consolidated Financial Statements](index=69&type=section&id=Item%208.%20Financial%20Statements) This section presents the audited consolidated financial statements and PricewaterhouseCoopers LLP's unqualified opinion, highlighting critical audit matters related to inventory and goodwill impairment [Report of Independent Registered Public Accounting Firm](index=70&type=section&id=8.1%20Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) - PricewaterhouseCoopers LLP issued an unqualified opinion, stating the consolidated financial statements are presented fairly and the company maintained effective internal control over financial reporting as of January 29, 2023[269](index=269&type=chunk)[270](index=270&type=chunk) - The audit identified two Critical Audit Matters (CAMs): the Inventory Provision and the Goodwill Impairment Assessment for the lululemon Studio reporting unit, both of which involved significant management judgment[276](index=276&type=chunk)[278](index=278&type=chunk)[281](index=281&type=chunk) [Financial Statements Highlights](index=75&type=section&id=8.2%20Financial%20Statements%20Highlights) Consolidated Balance Sheet Highlights (as of Jan 29, 2023 vs Jan 30, 2022) | Account | Jan 29, 2023 (in thousands) | Jan 30, 2022 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $1,154,867 | $1,259,871 | | Inventories | $1,447,367 | $966,481 | | Goodwill | $24,144 | $386,880 | | Total Assets | $5,607,038 | $4,942,478 | | Total Liabilities | $2,458,239 | $2,202,432 | | Total Stockholders' Equity | $3,148,799 | $2,740,046 | Consolidated Statement of Operations Highlights (Fiscal Year Ended) | Account | Jan 29, 2023 (in thousands) | Jan 30, 2022 (in thousands) | | :--- | :--- | :--- | | Net Revenue | $8,110,518 | $6,256,617 | | Gross Profit | $4,492,340 | $3,608,565 | | Impairment of goodwill and other assets | $407,913 | $0 | | Income from Operations | $1,328,408 | $1,333,355 | | Net Income | $854,800 | $975,322 | [Controls and Procedures](index=117&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of January 29, 2023, with no material changes - Management concluded that the company's disclosure controls and procedures were effective as of the end of the fiscal year[434](index=434&type=chunk) - Based on an evaluation against the COSO framework, management concluded that the company maintained effective internal control over financial reporting as of January 29, 2023[438](index=438&type=chunk) Part III - Corporate Governance and Executive Compensation This section incorporates information from the 2023 Proxy Statement, covering corporate governance, executive compensation, and equity compensation plan details [Equity Compensation Plan Information](index=120&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of January 29, 2023, the company had securities available for issuance under stockholder-approved equity compensation plans, including options, RSUs, and future issuances Equity Compensation Plan Information (as of January 29, 2023) | Plan Category | Securities to be Issued Upon Exercise (A) | Weighted-Average Exercise Price (B) | Securities Remaining for Future Issuance (C) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by stockholders | 1,253,404 | $230.78 | 16,784,492 |

Revenue and Sales Performance - Net revenue increased 30% to $8.1 billion in 2022, with constant dollar growth of 32%[176] - Total comparable sales increased 25% (28% on a constant dollar basis), driven by 16% comparable store sales growth and 33% direct-to-consumer revenue growth[176] - International net revenue grew 35% in 2022, despite COVID-19 closures in China, while North America revenue increased 29%[175] - Net revenue increased by $1.9 billion (30%) to $8.1 billion in 2022 from $6.3 billion in 2021, driven by direct-to-consumer and company-operated store revenue[188] - Total comparable sales increased by 25% in fiscal 2022, with a 28% increase on a constant dollar basis[188] - Company-operated stores revenue increased by $826.6 million (29.3%) to $3.6 billion, driven by 81 new stores and a 16% increase in comparable store sales[189] - Direct-to-consumer revenue increased by $921.8 million (33%) to $3.7 billion, with a 35% increase on a constant dollar basis[189][190] Gross Profit and Operating Income - Gross profit increased 24% to $4.5 billion, with adjusted gross profit up 26% to $4.6 billion[177] - Adjusted operating income increased 30% to $1.8 billion, with adjusted operating margin improving 10 basis points to 22.1%[179] - Gross profit increased by $883.8 million (24.5%) to $4.5 billion, but gross margin decreased by 230 basis points to 55.4%[191][193] - Income from operations decreased by $4.9 million (0.4%) to $1.3 billion, with operating margin declining by 490 basis points to 16.4%[204] Store Operations and Expansion - lululemon operated 655 company-operated stores globally as of January 29, 2023, with 81 net new stores opened in 2022, including 49 outside North America[18][19] - Sales per square foot for company-operated stores increased to $1,580 in 2022, up from $1,443 in 2021[20] - Company opened 81 net new stores in 2022, including 31 in China, 32 in North America, and 9 in Europe (first stores in Spain)[175] Product and Market Focus - Women's range accounts for 65% of lululemon's 2022 net revenue, while the men's range is growing due to increased recognition of its technical quality[14] - North America represents 84% of lululemon's 2022 net revenue, with international expansion focused on China, Asia Pacific, and Europe[15] - Launched footwear collection with 3 technical styles for women and a dual-gender slide, expanding into new categories like golf, tennis, and hiking[169] Supply Chain and Manufacturing - 39% of lululemon's products were manufactured in Vietnam in 2022, with the top five vendors accounting for 56% of production[32] - 39% of products manufactured in Vietnam, 14% in Cambodia, 12% in Sri Lanka, 8% in Bangladesh, and 7% in Indonesia in 2022[81] - 43% of fabric originated from Taiwan, 19% from China Mainland, and 16% from Sri Lanka in 2022[81] - 56% of products manufactured by top five vendors, with the largest vendor producing 15% of products in 2022[84] - 56% of fabrics produced by top five fabric suppliers, with the largest supplier producing 21% of fabric in 2022[86] Sustainability and Social Impact - The company's "Like New" recommerce program supports sustainability goals by reselling gently used products[26] - The company has contributed $29.4 million to its Centre for Social Impact, with $21.2 million directly to social impact organizations[44] - The company's Vendor Code of Ethics ensures respect for human and labor rights and promotes safe and fair working conditions in the supply chain[47] - The company's Foreign Migrant Worker Standard raises standards and benefits garment workers[48] Workforce and Diversity - Approximately 55% of the company's board of directors, 65% of the senior executive leadership team, and 45% of vice presidents and above are women, while 75% of the overall workforce are women as of January 29, 2023[39] - The company has achieved full pay equity, including gender and race, in the United States[42] - The company has invested $29.4 million out of a $75.0 million goal to advance equity in well-being by 2025[43] - The company employs approximately 34,000 people globally[44] - The 2022 employee engagement survey participation rate was approximately 83%, with the engagement score exceeding the retail industry average[44] Financial Risks and Challenges - Inventory forecasting challenges could lead to excess inventory or shortages, impacting gross margins and brand reputation[67][68] - Supply chain disruptions due to geopolitical events, labor shortages, or natural disasters could impair product distribution[80][83] - Reliance on international suppliers, particularly in the Asia Pacific region, poses risks to procurement and distribution[81][83] - Increasing labor costs in South Asia and Southeast Asia could significantly raise production costs[92][94] - Cybersecurity risks could result in data breaches, litigation, and financial exposure[95][96] - Data breaches and cyber-attacks pose significant risks, with potential legal, financial, and reputational impacts, though no material impact has been observed to date[97][98] - Compliance with privacy laws such as GDPR, PIPEDA, CCPA, and PIPL increases operational complexity and costs, with potential fines and litigation risks[99] - Dependence on technology systems and third-party services for e-commerce operations creates vulnerability to disruptions, which could harm sales and reputation[100][103] - Climate change and related regulations may increase production costs, disrupt supply chains, and impact consumer demand for products[107] - ESG scrutiny from investors and stakeholders could lead to additional costs, reputational damage, and challenges in employee retention[108][109] - Economic downturns, inflation, and geopolitical uncertainties may reduce consumer discretionary spending and demand for products[113] - COVID-19 and similar health events have disrupted operations, supply chains, and consumer behavior, with potential long-term impacts[114][115][116] - Trade restrictions, tariffs, and geopolitical tensions could increase costs and disrupt supply chains, particularly with sourcing from China[118][121] - Changes in UK-EU trade relations and foreign exchange rates may impact import duties and shipping logistics[122] - Tax law changes and unanticipated liabilities, including Canadian withholding taxes, could increase the effective tax rate and reduce profitability[125] - The company is negotiating the renewal of a profit allocation arrangement between the U.S. and Canada, which could impact its effective tax rate[128] - Changes in U.S., Canadian, or international tax laws, including the Inflation Reduction Act and OECD's Pillar Two rules, may affect the company's income tax expense, profitability, and capital allocation decisions[129] - The company faces significant regulatory compliance risks across multiple jurisdictions, with potential penalties, legal fees, and revenue loss if it fails to comply with trade and other regulations[130] - Fluctuations in foreign currency exchange rates impact the company's net revenue, expenses, assets, and liabilities, with potential negative effects as international expansion increases[132][133] - The company's intellectual property is limited, with competitors potentially able to manufacture and sell similar products at lower prices, which could harm net revenue and profitability[134][135] Operational and Financial Metrics - Operating profit in Q4 2022 was 24% of the full-year total, impacted by goodwill impairment related to lululemon Studio[37] - Inventory balance increased 50% as of January 29, 2023 compared to January 30, 2022 due to supply chain disruptions[183] - Recognized $442.7 million in post-tax charges related to lululemon Studio, including impairments and inventory provisions[174] - Board approved $1.0 billion stock repurchase program in March 2022, with $743.8 million remaining as of January 29, 2023[163] - Selling, general, and administrative expenses increased by $532.4 million (23.9%) to $2.8 billion, primarily due to higher head office and operating channel costs[194][195] - Impairment of goodwill and other assets amounted to $407.9 million in 2022, primarily related to the lululemon Studio business unit[198][201] - General corporate expenses increased by $224.9 million (35.2%) to $862.9 million, driven by higher employee costs and technology expenses[204][207] - The company recognized a $62.9 million provision against hardware inventory, reducing gross margin by 80 basis points[193] Intellectual Property and Brand Value - The company holds trademark rights on many products, including the lululemon and wave design trademarks, which are considered among its most valuable assets[49] - The company faces risks related to maintaining brand value, consumer shopping preferences, product defects, and competitive pressures[52][56][58][60] Distribution and Logistics - The company has entered into new leases for distribution centers in Ontario, California (1,250,000 sq ft, expiring 2038), Ravenhall, Victoria (250,000 sq ft, expiring 2033), and Brampton, Ontario (980,000 sq ft, expiring 2039), expected to be operational in 2023 and 2024[149][150] Direct-to-Consumer and Digital Strategy - lululemon's direct-to-consumer channel enhances brand awareness and serves guests in markets without physical retail locations[23] - lululemon Studio offers in-home fitness subscriptions, contributing to the company's integrated fitness strategy[27] Product Innovation and Design - lululemon's product design team focuses on technical innovation, collaborating with suppliers to develop proprietary fabrics[31]

Lululemon Athletica Inc. (NASDAQ:LULU) Q3 2022 Results Conference Call December 8, 2022 4:30 PM ET Company Participants Howard Tubin - Vice President, Investor Relations Calvin McDonald - Chief Executive Officer Meghan Frank - Chief Financial Officer Conference Call Participants Adrienne Yih - Barclays Alex Straton - Morgan Stanley Brook Roach - Goldman Sachs Matthew Boss - JPMorgan Lorraine Hutchinson - Bank of America Rick Patel - Raymond James Abbie Zvejnieks - Piper Sandler John Kernan - Cowen Mark Alts ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 29, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-33608 lululemon athletica inc. (Exact name of registrant as specified in its charter) Delaware 20-3842867 (State or other juri ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-33608 lululemon athletica inc. (Exact name of registrant as specified in its charter) (State or other jurisd ...

Lululemon Athletica Inc. (NASDAQ:LULU) Q2 2022 Earnings Conference Call September 1, 2022 4:30 PM ET Company Participants Howard Tubin - Vice President, Investor Relations Calvin McDonald - Chief Executive Officer Meghan Frank - Chief Financial Officer Conference Call Participants Adrienne Yih - Barclays Mark Altschwager - Baird Alex Straton - Morgan Stanley Matthew Boss - JPMorgan Brooke Roach - Goldman Sachs Lorraine Hutchinson - Bank of America Dana Telsey - Telsey Advisory Group John Kernan - Cowen & Co ...

Lululemon Athletica Inc. (NASDAQ:LULU) Q1 2022 Earnings Conference Call June 2, 2022 4:30 PM ET Company Participants Howard Tubin - Vice President, Investor Relations Calvin McDonald - Chief Executive Officer Meghan Frank - Chief Financial Officer Conference Call Participants Matthew Boss - JPMorgan Mark Altschwager - Baird Ike Boruchow - Wells Fargo Alex Straton - Morgan Stanley Lorraine Hutchinson - Bank of America Brooke Roach - Goldman Sachs Paul Lejuez - Citigroup Michael Binetti - Credit Suisse Adrie ...