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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

lululemon athletica inc., economic profit calculation

US$ in thousands

12 months ended:	Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020	Feb 3, 2019
Net operating profit after taxes (NOPAT)¹	1,622,788)	933,695)	1,040,291)	680,052)	711,860)	519,499)
Cost of capital²	16.23%	16.17%	16.25%	16.27%	16.16%	15.89%
Invested capital³	5,978,501)	4,526,979)	3,909,051)	3,672,427)	3,008,240)	2,459,537)

Economic profit⁴	652,528)	201,571)	404,994)	82,514)	225,862)	128,794)

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 1,622,788 – 16.23% × 5,978,501 = 652,528

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	lululemon athletica inc. economic profit decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.

lululemon athletica inc., NOPAT calculation

US$ in thousands

12 months ended:	Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020	Feb 3, 2019
Net income	1,550,190)	854,800)	975,322)	588,913)	645,596)	483,801)
Deferred income tax expense (benefit)¹	(26,747)	9,400)	(6,867)	34,125)	24,394)	18,954)
Increase (decrease) in unredeemed gift card liability²	55,001)	43,283)	52,347)	35,435)	21,001)	16,744)
Increase (decrease) in equity equivalents³	28,254)	52,683)	45,480)	69,560)	45,395)	35,698)
Interest expense	—)	—)	—)	—)	—)	—)
Interest expense, operating lease liability⁴	56,131)	33,180)	24,669)	27,315)	26,417)	—)
Adjusted interest expense	56,131)	33,180)	24,669)	27,315)	26,417)	—)
Tax benefit of interest expense⁵	(11,788)	(6,968)	(5,181)	(5,736)	(5,547)	—)
Adjusted interest expense, after taxes⁶	44,344)	26,212)	19,489)	21,579)	20,869)	—)
Net operating profit after taxes (NOPAT)	1,622,788)	933,695)	1,040,291)	680,052)	711,860)	519,499)

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in unredeemed gift card liability.

³ Addition of increase (decrease) in equity equivalents to net income.

⁴ 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 1,403,282 × 4.00% = 56,131

⁵ 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 56,131 × 21.00% = 11,788

⁶ Addition of after taxes interest expense to net income.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	lululemon athletica inc. NOPAT decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.

lululemon athletica inc., cash operating taxes calculation

US$ in thousands

12 months ended:	Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020	Feb 3, 2019
Income tax expense	625,545)	477,771)	358,547)	230,437)	251,797)	231,449)
Less: Deferred income tax expense (benefit)	(26,747)	9,400)	(6,867)	34,125)	24,394)	18,954)
Add: Tax savings from interest expense	11,788)	6,968)	5,181)	5,736)	5,547)	—)
Cash operating taxes	664,080)	475,339)	370,595)	202,048)	232,950)	212,495)

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	lululemon athletica inc. cash operating taxes increased from 2022 to 2023 and from 2023 to 2024.

lululemon athletica inc., invested capital calculation (financing approach)

US$ in thousands

	Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020	Feb 3, 2019
Operating lease liability¹	1,403,282)	1,070,334)	881,052)	798,681)	739,961)	783,913)
Total reported debt & leases	1,403,282)	1,070,334)	881,052)	798,681)	739,961)	783,913)
Stockholders’ equity	4,232,081)	3,148,799)	2,740,046)	2,558,566)	1,952,218)	1,445,975)
Net deferred tax (assets) liabilities²	20,346)	48,682)	47,261)	52,024)	11,997)	(12,300)
Unredeemed gift card liability³	306,479)	251,478)	208,195)	155,848)	120,413)	99,412)
Equity equivalents⁴	326,825)	300,160)	255,456)	207,872)	132,410)	87,112)
Accumulated other comprehensive (income) loss, net of tax⁵	264,256)	252,584)	195,917)	177,155)	224,581)	216,808)
Adjusted stockholders’ equity	4,823,162)	3,701,543)	3,191,419)	2,943,593)	2,309,209)	1,749,895)
Work in progress⁶	(247,943)	(244,898)	(163,420)	(69,847)	(40,930)	(74,271)
Invested capital	5,978,501)	4,526,979)	3,909,051)	3,672,427)	3,008,240)	2,459,537)

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of unredeemed gift card liability.

⁴ Addition of equity equivalents to stockholders’ equity.

⁵ Removal of accumulated other comprehensive income.

⁶ Subtraction of work in progress.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	lululemon athletica inc. invested capital increased from 2022 to 2023 and from 2023 to 2024.

lululemon athletica inc., cost of capital calculations

Jan 28, 2024

	Capital (fair value)¹	Weights					Cost of capital
Equity²	60,337,715)	60,337,715)	÷	61,740,997)	=	0.98	0.98	×	16.53%	=	16.16%
Operating lease liability³	1,403,282)	1,403,282)	÷	61,740,997)	=	0.02	0.02	×	4.00% × (1 – 21.00%)	=	0.07%
Total:	61,740,997)					1.00					16.23%

Based on: 10-K (reporting date: 2024-01-28).

¹ US$ in thousands

² Equity. See details »

³ Operating lease liability. See details »

Jan 29, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	40,732,106)	40,732,106)	÷	41,802,440)	=	0.97	0.97	×	16.53%	=	16.11%
Operating lease liability³	1,070,334)	1,070,334)	÷	41,802,440)	=	0.03	0.03	×	3.10% × (1 – 21.00%)	=	0.06%
Total:	41,802,440)					1.00					16.17%

Based on: 10-K (reporting date: 2023-01-29).

¹ US$ in thousands

² Equity. See details »

³ Operating lease liability. See details »

Jan 30, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	43,998,362)	43,998,362)	÷	44,879,414)	=	0.98	0.98	×	16.53%	=	16.21%
Operating lease liability³	881,052)	881,052)	÷	44,879,414)	=	0.02	0.02	×	2.80% × (1 – 21.00%)	=	0.04%
Total:	44,879,414)					1.00					16.25%

Based on: 10-K (reporting date: 2022-01-30).

¹ US$ in thousands

² Equity. See details »

³ Operating lease liability. See details »

Jan 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	41,338,271)	41,338,271)	÷	42,136,952)	=	0.98	0.98	×	16.53%	=	16.22%
Operating lease liability³	798,681)	798,681)	÷	42,136,952)	=	0.02	0.02	×	3.42% × (1 – 21.00%)	=	0.05%
Total:	42,136,952)					1.00					16.27%

Based on: 10-K (reporting date: 2021-01-31).

¹ US$ in thousands

² Equity. See details »

³ Operating lease liability. See details »

Feb 2, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	26,137,149)	26,137,149)	÷	26,877,110)	=	0.97	0.97	×	16.53%	=	16.08%
Operating lease liability³	739,961)	739,961)	÷	26,877,110)	=	0.03	0.03	×	3.57% × (1 – 21.00%)	=	0.08%
Total:	26,877,110)					1.00					16.16%

Based on: 10-K (reporting date: 2020-02-02).

¹ US$ in thousands

² Equity. See details »

³ Operating lease liability. See details »

Feb 3, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	19,223,439)	19,223,439)	÷	20,007,352)	=	0.96	0.96	×	16.53%	=	15.89%
Operating lease liability³	783,913)	783,913)	÷	20,007,352)	=	0.04	0.04	×	0.00% × (1 – 21.00%)	=	0.00%
Total:	20,007,352)					1.00					15.89%

Based on: 10-K (reporting date: 2019-02-03).

¹ US$ in thousands

² Equity. See details »

³ Operating lease liability. See details »

lululemon athletica inc., economic spread ratio calculation, comparison to benchmarks

	Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020	Feb 3, 2019
Selected Financial Data (US$ in thousands)
Economic profit¹	652,528)	201,571)	404,994)	82,514)	225,862)	128,794)
Invested capital²	5,978,501)	4,526,979)	3,909,051)	3,672,427)	3,008,240)	2,459,537)
Performance Ratio
Economic spread ratio³	10.91%	4.45%	10.36%	2.25%	7.51%	5.24%
Benchmarks
Economic Spread Ratio, Competitors⁴
Nike Inc.	—	10.79%	12.52%	12.18%	-0.54%	15.49%

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 652,528 ÷ 5,978,501 = 10.91%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	lululemon athletica inc. economic spread ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.

lululemon athletica inc., economic profit margin calculation, comparison to benchmarks

	Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020	Feb 3, 2019
Selected Financial Data (US$ in thousands)
Economic profit¹	652,528)	201,571)	404,994)	82,514)	225,862)	128,794)

Net revenue	9,619,278)	8,110,518)	6,256,617)	4,401,879)	3,979,296)	3,288,319)
Add: Increase (decrease) in unredeemed gift card liability	55,001)	43,283)	52,347)	35,435)	21,001)	16,744)
Adjusted net revenue	9,674,279)	8,153,801)	6,308,964)	4,437,314)	4,000,297)	3,305,063)
Performance Ratio
Economic profit margin²	6.74%	2.47%	6.42%	1.86%	5.65%	3.90%
Benchmarks
Economic Profit Margin, Competitors³
Nike Inc.	—	4.29%	5.67%	5.75%	-0.28%	5.62%

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).

¹ Economic profit. See details »

² 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net revenue
= 100 × 652,528 ÷ 9,674,279 = 6.74%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	lululemon athletica inc. economic profit margin deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.

lululemon athletica inc. (NASDAQ:LULU)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin