What are the investment strengths of Lululemon Athletica Inc (LULU)?

ROIC 30.7% TTM with debt/equity 0.40 - generates 1.2B FCF annually while maintaining conservative leverage for buybacks or international expansion P/E 12.5x below industry median 13.5x despite 4.5x operating margin advantage - multiple expansion potential if growth stabilizes above 10%

What are the investment risks for Lululemon Athletica Inc (LULU)?

Inventory 1.7B (158% of current liabilities) signals demand softness or overbuying - markdowns could compress gross margin from 59.1% Revenue growth halved from 22.8% 5Y to 10.6% 3Y CAGR - premium positioning vulnerable as athleisure commoditizes

Lululemon Athletica Inc

LULU

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Lululemon Athletica Inc AI Insights

Informational only. Not investment advice.

As of 2025-12-08

Snapshot

ROE of 42% TTM vs industry median 8% - 5x capital efficiency advantage from asset-light DTC model with minimal goodwill (4% of equity)[Return on Equity]
Operating margin 22.9% TTM vs industry median 5.1% - 4.5x profitability gap reflects brand pricing power in commoditized apparel[Operating Margin]
5Y revenue CAGR 22.8% decelerating to 3Y CAGR 10.6% - growth normalization while P/E 12.5x sits below industry median 13.5x[P/E Ratio]

Watch Triggers

Inventory: Exceeds 2x current liabilities or grows >15% YoY — Signals demand weakness requiring margin-destroying markdowns
Gross Margin: Falls below 55% (currently 59.1%) — Would indicate pricing power erosion or promotional activity
Total Revenue 3Y Growth: Decelerates below 8% — Would compress P/E multiple as growth premium evaporates

Bull Case

ROIC 30.7% TTM with debt/equity 0.40 - generates 1.2B FCF annually while maintaining conservative leverage for buybacks or international expansion

ROICDebt to EquityFree Cash Flow

P/E 12.5x below industry median 13.5x despite 4.5x operating margin advantage - multiple expansion potential if growth stabilizes above 10%

P/E RatioOperating MarginTotal Revenue 3Y Growth

Bear Case

Inventory 1.7B (158% of current liabilities) signals demand softness or overbuying - markdowns could compress gross margin from 59.1%

InventoryGross MarginCurrent Liabilities

Revenue growth halved from 22.8% 5Y to 10.6% 3Y CAGR - premium positioning vulnerable as athleisure commoditizes

Total Revenue 5Y GrowthTotal Revenue 3Y Growth

Bull vs Bear Balance

AI-generated sentiment analysis based on fundamental metrics and market conditions.

55%

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Forward Thesis

Margin compression likely as 5Y growth (22.8%) normalizes to 3Y pace (10.6%) without proportional opex reduction

1-3ymed

Revenue deceleration from 22.8% to 10.6% CAGR
Inventory up 1.7B vs 373M payables - working capital drag
Capex 743M TTM (6.8% of revenue) for store expansion

Working capital 2.0B consumes 17% of market capFCF margin 10.7% vs operating margin 22.9% - capex intensiveEPS 3Y CAGR 12.1% barely exceeds revenue growth

Valuation Context

Caveats

Public Strategies Rankings

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LULU Fundamentals

Manufacturing → Apparel Manufacturing

Metric	Value	YoY Growth	Industry Percentile
Market Cap	$17.29B		—
Enterprise Value	$18.02B		—
P/E Ratio	10		—
Total Revenue - TTM	$11.07B	+8.8%	—
Earnings Per Share (diluted) - TTM	$14.38		—
Operating Margin - TTM	22.0%	-1.3%	—
Net Margin - TTM	15.7%	-1.3%	—
Free Cash Flow - TTM	$1.13B	-29.2%	—
Return on Common Equity - TTM	41.0%	-2.5%	—
Beta 5Y (Monthly)	unknown		—

LULU Dividend History

No dividends

LULU Stock Splits

1 stock split

07/12/111:2 split

LULU SEC Filings

Filing Date	Report Date	Report Type	Filing Link
12/11/25	11/02/25	10-Q	0001397187-25-000055
09/04/25	08/03/25	10-Q	0001397187-25-000039
06/05/25	05/04/25	10-Q	0001397187-25-000027
03/27/25	02/02/25	10-K	0001397187-25-000013
12/05/24	10/27/24	10-Q	0001397187-24-000041
12/11/25	10/27/24	10-Q	0001397187-25-000055
09/04/25	07/28/24	10-Q	0001397187-25-000039
08/29/24	07/28/24	10-Q	0001397187-24-000034
06/05/25	04/28/24	10-Q	0001397187-25-000027
06/05/24	04/28/24	10-Q	0001397187-24-000024
03/27/25	01/28/24	10-K	0001397187-25-000013
03/21/24	01/28/24	Unknown	0001397187-24-000010
12/07/23	10/29/23	10-Q	0001397187-23-000052
12/05/24	10/29/23	10-Q	0001397187-24-000041
08/29/24	07/30/23	10-Q	0001397187-24-000034
08/31/23	07/30/23	10-Q	0001397187-23-000044
06/05/24	04/30/23	10-Q	0001397187-24-000024
06/01/23	04/30/23	10-Q	0001397187-23-000027
03/28/23	01/29/23	10-K	0001397187-23-000012
03/21/24	01/29/23	10-K	0001397187-24-000010
12/08/22	10/30/22	10-Q	0001397187-22-000049
09/01/22	07/31/22	10-Q	0001397187-22-000040
06/02/22	05/01/22	10-Q	0001397187-22-000031
03/29/22	01/30/22	10-K	0001397187-22-000014
03/21/24	01/30/22	10-K	0001397187-24-000010
12/09/21	10/31/21	10-Q	0001397187-21-000039
09/08/21	08/01/21	10-Q	0001397187-21-000027
06/03/21	05/02/21	10-Q	0001397187-21-000018
03/30/21	01/31/21	10-K	0001397187-21-000009
12/10/20	11/01/20	10-Q	0001397187-20-000057
09/08/20	08/02/20	10-Q	0001397187-20-000043
06/11/20	05/03/20	10-Q	0001397187-20-000032
03/26/20	02/02/20	10-K	0001397187-20-000012
12/11/19	11/03/19	10-Q	0001397187-19-000072
09/05/19	08/04/19	10-Q	0001397187-19-000064
06/12/19	05/05/19	10-Q	0001397187-19-000044
03/27/19	02/03/19	10-K	0001397187-19-000011
12/06/18	10/28/18	10-Q	0001397187-18-000053
08/30/18	07/29/18	10-Q	0001397187-18-000047
05/31/18	04/29/18	10-Q	0001397187-18-000030
03/27/18	01/28/18	10-K	0001397187-18-000013
12/06/17	10/29/17	10-Q	0001397187-17-000048
08/31/17	07/30/17	10-Q	0001397187-17-000039
06/01/17	04/30/17	10-Q	0001397187-17-000027
03/29/17	01/29/17	10-K	0001397187-17-000008
12/07/16	10/30/16	10-Q	0001397187-16-000134
09/01/16	07/31/16	10-Q	0001397187-16-000127
06/08/16	05/01/16	10-Q	0001397187-16-000108
03/30/16	01/31/16	10-K	0001397187-16-000089
12/09/15	11/01/15	10-Q	0001397187-15-000071
09/10/15	08/02/15	10-Q	0001397187-15-000060
06/09/15	05/03/15	10-Q	0001397187-15-000045
03/26/15	02/01/15	10-K	0001397187-15-000016
12/11/14	11/02/14	10-Q	0001397187-14-000077
09/11/14	08/03/14	10-Q	0001397187-14-000058
06/12/14	05/04/14	10-Q	0001397187-14-000039
03/27/14	02/02/14	10-K	0001397187-14-000021
12/12/13	11/03/13	10-Q	0001397187-13-000047
09/12/13	08/04/13	10-Q	0001397187-13-000022
06/10/13	05/05/13	10-Q	0001193125-13-253430
03/21/13	02/03/13	10-K	0001193125-13-118393
12/06/12	10/28/12	10-Q	0001193125-12-492935
09/07/12	07/29/12	10-Q	0001193125-12-383973
06/07/12	04/29/12	10-Q	0001193125-12-262708
03/22/12	01/29/12	10-K	0001193125-12-126444
12/01/11	10/30/11	10-Q	0001193125-11-326722
09/09/11	07/31/11	10-Q	0000950123-11-083597
06/10/11	05/01/11	10-Q	0000950123-11-058122
03/17/11	01/30/11	10-K	0000950123-11-026220
12/09/10	10/31/10	10-Q	0000950123-10-112239
09/10/10	08/01/10	10-Q	0000950123-10-085088
06/10/10	05/02/10	10-Q	0000950123-10-057113
03/25/10	01/31/10	10-K	0000950123-10-028033
12/09/09	11/01/09	10-Q	0000950123-09-069556
09/10/09	08/02/09	10-Q	0000950123-09-042269
06/11/09	04/30/09	10-Q	0000950123-09-013148
03/27/09	01/28/09	Unknown	--
12/11/08	10/30/08	Unknown	--
09/11/08	07/31/08	Unknown	--
06/02/08	04/30/08	8-K	0000945234-08-000209
04/08/08	01/31/08	4	0001209191-08-006719
11/29/07	10/30/07	Unknown	--
09/10/07	07/31/07	10-Q	0000945234-07-000575
04/30/07	04/30/07	Unknown	--
01/31/07	01/28/07	Unknown	--
10/31/06	10/30/06	Unknown	--
07/31/06	07/31/06	Unknown	--
04/30/06	04/30/06	Unknown	--
01/31/06	01/28/06	Unknown	--
10/31/05	10/30/05	Unknown	--
07/31/05	07/31/05	Unknown	--
04/30/05	04/30/05	Unknown	--