The **net cash provided by operating activities** in **Q4 2024** was notably high due to several factors. First, there was a significant increase in **net income**, which helped drive higher cash inflows. Second, there were substantial improvements in the **changes in operating assets and liabilities**, with a notable boost of **$859.1 million** from factors such as improved inventory management and adjustments in accounts payable and prepaid expenses. Finally, various **adjusting items**—including higher depreciation and amortization, increased stock-based compensation, and recognition of goodwill impairments and restructuring costs—further contributed to the boost in operating cash flow.  **[0001397187-24-000010_lulu-20240128.htm:80]** **[0001397187-24-000010_lulu-20240128.htm:68]** 

Why was Operating Cash Flow so high in Q4 2024?

The significant increase in operating cash flow for FY 2024 was primarily driven by **an increase in net income** by **$695,390 thousand** and notable **changes in operating assets and liabilities**. These changes included **improved inventory management**, **higher accounts payable**, and a **reduction in prepaid expenses**, all of which positively impacted cash flows. Additionally, **adjusting items** such as depreciation and stock-based compensation further contributed to the higher operating cash flows, despite being partially offset by other factors like asset impairments and restructuring costs.  **[0001397187-24-000010_lulu-20240128.htm:80]** **[0001397187-24-000010_lulu-20240128.htm:68]** 

What drove the significant increase in Operating Cash Flow in FY 2024?

The documents show that Lululemon’s operating cash flow was **$1,384,098 thousand** in Q4 2024 and dropped to **$127,524 thousand** in Q1 2025.  **[0001397187-24-000010_lulu-20240128.htm:80]** **[0001397187-24-000024_lulu-20240428.htm:4]**  However, while one document provides reasons for a large increase in operating cash flow from one prior quarter to the next (citing factors such as **increased net income of $31.0 million**, **changes in operating assets and liabilities of $34.5 million**, and **adjustments of $16.5 million** for Q1 2024 compared to Q1 2023)  **[0001397187-24-000024_lulu-20240428.htm:28]** , none of the sources specifically explain why Q1 2025 was so low compared to Q4 2024. Therefore, based on the available documents, **no definitive explanation** for the low operating cash flow in Q1 2025 is provided.

Why was Operating Cash Flow so low in Q1 2025?

The provided documents do not include any details or discussions regarding the factors that contributed to the exceptional **Free Cash Flow** in **Q4 2024**. No specific information on operational performance, working capital changes, or other related components of free cash flow was mentioned [N/A].

What factors contributed to the exceptional Free Cash Flow in Q4 2024?

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The nearly **doubled cash and cash equivalents** in Q4 2024 were primarily driven by very **strong operating cash flow**. Lululemon generated significantly higher net cash from operating activities in FY 2024, largely due to a substantial increase in net income compared to the previous period. This robust operating performance more than offset the cash outflows from both investing activities, which were slightly higher due to capital expenditures, and financing activities related in part to share repurchases. Additionally, the effect of foreign currency exchange had a minimal negative impact, further contributing to the overall increase in cash.  **[0001397187-24-000010_lulu-20240128.htm:80]** 

Why did cash and cash equivalents nearly double in Q4 2024?

The jump in total assets in Q4 2024 was primarily driven by a **significant increase in cash and cash equivalents**, which more than doubled during the period. Additionally, there were substantial increases in **property and equipment (net)** and **right-of-use lease assets**, reflecting capital investments for new store openings, renovations, and lease agreements. There was also an uptick in **deferred income taxes and other non-current assets**, along with a reduction in inventories that further contributed to the overall asset growth.  **[0001397187-24-000009_lulu-20240128xex991.htm:6]** **[0001397187-24-000010_lulu-20240128.htm:77]** 

What drove the jump in total assets in Q4 2024?

The significant rise in inventories in Q3 2025 was primarily driven by the company’s strategic focus on **chasing seasonal newness**, which involves building up inventory in anticipation of future sales, particularly in the U.S. market. Additionally, the company’s longer-term inventory management strategy, which aims to align inventory levels with sales growth, contributed to a moderate build-up, despite the increase being lower than guidance in the mid-teens. Business growth investments—including a multiyear distribution center project and new store openings—also played a role in driving the higher inventory levels.  **[0001397187-24-000040_lulu-20241027xex991.htm:5]** **[LULU_3410966_10]** **[LULU_3410966_6]** **[0001397187-24-000041_lulu-20241027.htm:18]** 

What led to the significant rise in inventories in Q3 2025?

The increase in total liabilities in Q3 2025 was driven by several key factors. **Non-current lease liabilities** increased significantly, contributing an additional **$272,779 thousand**, which likely reflects new lease agreements or store expansions. Additionally, **current liabilities** saw notable rises with **accounts payable increasing by $76,636 thousand**, **accrued liabilities and other increasing by $168,666 thousand**, and **current lease liabilities growing by $73,230 thousand**. There was also a significant jump in **current income taxes payable by $69,577 thousand**. Although a decrease in **deferred income tax liabilities** partially offset these increases, the overall impact was substantial due to ongoing investments in leasing, international growth, and operational scaling.  **[0001397187-24-000040_lulu-20241027xex991.htm:5]** 

What factors contributed to the increase in total liabilities in Q3 2025?

The surge in goodwill in Q3 2025 was primarily driven by the acquisition of the Mexico operations. This acquisition significantly increased the net amount of goodwill and intangible assets, as demonstrated by the jump from **$24,083,000** in January 2024 to **$178,185,000** in October 2024, which laid the groundwork for the substantial increase noted in Q3 2025.  **[0001397187-24-000040_lulu-20241027xex991.htm:5]** **[0001397187-24-000041_lulu-20241027.htm:30]** 

Why did goodwill surge in Q3 2025?

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The sharp increase in **Income from Operations** in **Q4 2024** was driven by several key factors. **Revenue grew by 16%** to **$3,205,103 thousand** with strong performance across regions, especially in China Mainland and the Rest of World.  **[0001397187-24-000009_lulu-20240128xex991.htm:0]** **[LULU_3378721_5]**  Additionally, **gross margin improved significantly** from **55.1%** to **59.4%**, largely due to lower air and ocean freight costs, reduced airfreight usage, and relatively flat markdowns compared to the prior year.  **[0001397187-24-000009_lulu-20240128xex991.htm:0]** **[LULU_3378721_5]** **[0001397187-24-000009_lulu-20240128xex991.htm:6]**  Furthermore, **impairment costs that impacted Q4 2023, amounting to $407,913 thousand**, were absent in Q4 2024, and although **SG&A expenses increased**, they were more than offset by the higher revenue and improved gross profit.  **[0001397187-24-000009_lulu-20240128xex991.htm:6]** 

What drove the sharp increase in Income from Operations in Q4 2024?

In **Q4 2024**, net income was exceptionally high primarily due to a combination of **strong revenue growth**—with total net revenue increasing by **16%** to **$3.2 billion** across key regions such as the Americas, China Mainland, and the Rest of World—along with substantial **gross profit and margin expansion** (a **25%** increase in gross profit to **$1.9 billion** and an improvement in gross margin by **430 basis points**). Additionally, **operating income surged by 191%** to **$913.9 million**, and a significant reduction in the effective income tax rate from **62.3%** to **28.1%** further bolstered the profitability in Q4 2024.  **[0001397187-24-000009_lulu-20240128xex991.htm:0]** **[LULU_3378721_5]** 

Why was Net Income so high in Q4 2024?

The surge in **EPS** in Q4 2024 was driven by several factors, including **higher net income** (an increase from **$290.4 million** to **$669 million**), **strong revenue growth** (with total revenue up **16%** to **$3.2 billion**), and **improved gross margins** (an increase of **430 basis points** to **59.4%**) that helped bolster profitability. Additionally, a **lower effective tax rate** (dropping from **62.3%** to **28.1%**) and **share repurchases** (reducing outstanding shares by **0.1 million**) further contributed to the impressive rise in EPS.  **[0001397187-24-000009_lulu-20240128xex991.htm:0]** **[LULU_3378721_6]** **[0001397187-24-000024_lulu-20240428.htm:2]** **[LULU_3378721_5]** **[0001397187-24-000024_lulu-20240428.htm:14]** 

What factors contributed to the surge in EPS in Q4 2024?

Lululemon’s EPS doubled in FY 2024 primarily because **net revenue grew by 19%** (rising from **$8.1 billion** in FY 2023 to **$9.6 billion** in FY 2024), the company achieved **improved operating margins** (expanding by **110 basis points**), and **net income more than doubled** (increasing from **$854.8 million** to **$1.55 billion**). Additionally, **impairment and restructuring expenses decreased dramatically** (from **$407.9 million** in FY 2023 to **$74.5 million** in FY 2024), and **share repurchases reduced the weighted-average number of shares outstanding**, all of which collectively led to the significant increase in EPS.  **[0001397187-24-000010_lulu-20240128.htm:78]** **[0001397187-24-000009_lulu-20240128xex991.htm:0]** **[LULU_3378721_7]** **[0001397187-24-000010_lulu-20240128.htm:106]** **[LULU_3378721_1]** 

What led to the doubling of EPS in FY 2024?

Based on the documents, **net income in Q1 2025 increased by $31,016 thousand** compared to Q1 2023, rising from **$290,405 thousand** to **$321,421 thousand**.  **[0001397187-24-000024_lulu-20240428.htm:26]**  There is no indication of a significant drop in net income for Q1 2025; instead, the increase was driven primarily by a combination of higher gross profit, increased interest income, and offsetting factors despite higher SG&A expenses and income tax expense.  **[0001397187-24-000024_lulu-20240428.htm:26]** **[0001397187-24-000024_lulu-20240428.htm:23]** 

Why did Net Income drop significantly in Q1 2025?

fa224c180fec585fe51d41c34d1298019ec5bb9fefe985ad7656a2cba29673c0

Cash and cash equivalents (USD, thousands)

Inventories (USD, thousands)

Prepaid and receivable income taxes (USD, thousands)

Prepaid expenses and other current assets (USD, thousands)

Total current assets (USD, thousands)

Property and equipment, net (USD, thousands)

Right-of-use lease assets (USD, thousands)

Total assets (USD, thousands)

Accounts payable (USD, thousands)

Accrued liabilities and other (USD, thousands)

Accrued compensation and related expenses (USD, thousands)

Current lease liabilities (USD, thousands)

Current income taxes payable (USD, thousands)

Unredeemed gift card liability (USD, thousands)

Other current liabilities (USD, thousands)

Total current liabilities (USD, thousands)

Non-current lease liabilities (USD, thousands)

Deferred income tax liabilities (USD, thousands)

Other non-current liabilities (USD, thousands)

Total stockholders' equity (USD, thousands)

Total liabilities and stockholders' equity (USD, thousands)

f2896f452037eedc288ef368cf178e06f0910ed35fd5830168c458723bca71af

Net Revenue (USD, thousands)

Cost of Goods Sold (USD, thousands)

Gross Profit (USD, thousands)

Selling, General and Administrative Expenses (USD, thousands)

Amortization of Intangible Assets (USD, thousands)

Income from Operations (USD, thousands)

Other Income (Expense), Net (USD, thousands)

Income Before Income Tax Expense (USD, thousands)

Income Tax Expense (USD, thousands)

Net Income (USD, thousands)

Basic Earnings per Share (USD)

Diluted Earnings per Share (USD)

586af2ba1c022159bdd774ea71dc909000e2df5d24168dd9b76b9cb543af16fe

Net income (USD, thousands)

Net cash provided by operating activities (USD, thousands)

Net cash used in investing activities (USD, thousands)

Net cash used in financing activities (USD, thousands)

Effect of foreign currency exchange rate changes on cash and cash equivalents (USD, thousands)

Increase (decrease) in cash and cash equivalents (USD, thousands)

Cash and cash equivalents, beginning of period (USD, thousands)

Cash and cash equivalents, end of period (USD, thousands)

1bc1c5cccd8357bdc3a057cbbd04ab24c8a8b56a4725ac1ba6839e573c495069

25e8e650d7006ed96831db5f0cb5686d87de5f9bbaa6973b1ddf5708294ea13a

Adjustments for Non-Cash Items [USD]

Stock-Based Compensation [USD]

Changes in Working Capital [USD]

Capital Expenditures (CapEx) [USD]

Proceeds from / Repayments of Debt [USD]

Share Repurchases [USD]

Dividend Payments [USD]

Net Change in Cash [USD]

a8a8c779afe388e50645803dfe0256340620117a0f04eb002aa44c3283beb54f

9b14ea0d2e8abf24cf892ccd0d329e75f9ff0aab6d86b95c466697dc8c361411

cd99e2bc8b116352a476e35b3b8f73548f03b9a36324a3690efd4da590066901

Women's Product

Men's Product

Other Categories

Company-operated Stores

Direct to Consumer

Other

E-commerce

Other Channels

Total Revenue

97d36b355c44bbe011e7d14f9eaca176775531f420eb2a5231ba766a80c124d8

Americas

- United States

- Canada

- Mexico

China Mainland

- Hong Kong SAR, Taiwan, and Macau SAR

Rest of World

- Other geographic areas

People's Republic of China

Outside of North America

523bb6a1d1e52e486314236537dd211a8fa2e8aae7431137e428585a537fc4d9

lululemon athletica (LULU)

Financials