lululemon athletica inc. (NASDAQ:LULU)

The analysis of the financial data reveals several notable trends and changes over the observed periods, specifically focusing on goodwill and intangible assets.

Goodwill

The reported goodwill shows significant fluctuation, initially increasing sharply from 24,182 thousand USD in February 2020 to a peak of 386,877 thousand USD in January 2021. It remains stable into January 2022, then decreases substantially in January 2023 and January 2024, reaching 24,083 thousand USD, before rising again to 159,518 thousand USD in February 2025. This pattern suggests major acquisition activities or revaluations occurred around 2020-2022, followed by sizable impairments or divestitures in subsequent years and some recovery by 2025.

Franchise Rights

A distinct entry for franchise rights appears only in 2025 with a value of 14,325 thousand USD. This indicates a new recognition or acquisition of franchise rights in the latest period, contributing to the intangible asset base.

MIRROR Brand

The MIRROR brand intangible asset is recognized starting from January 2021 at 26,500 thousand USD, maintained through January 2022, but then decreases sharply to 6,423 thousand USD by January 2023 and further to 4,089 thousand USD in January 2024, after which it is not reported. This decline implies rapid amortization or impairment.

Customer Relationships

Customer relationships intangible assets exhibit a similar trend as the MIRROR brand, reported at 28,000 thousand USD in January 2021 and 2022, with a substantial decrease to 7,492 thousand USD in 2023 and 2024, respectively. This decline points to accelerated amortization consistent with customer contract life cycles or write-downs.

Technology

Technology-related intangible assets appear from January 2021 at 25,500 thousand USD and remain constant through January 2023, then reduce to 12,632 thousand USD in January 2024, indicating some amortization or partial disposals of technology assets.

Content

Content intangible assets follow a similar pattern, starting at 5,000 thousand USD in January 2021 through 2023, with a decrease to 3,250 thousand USD in January 2024, suggesting amortization.

Other Intangible Assets

These remain relatively stable and minor in value, around 241 to 270 thousand USD, indicating minor or negligible changes.

Intangible Assets, Gross Carrying Amount

The gross carrying amount of intangible assets peaks at 85,270 thousand USD in January 2021 and 2022, then sharply decreases to 44,685 thousand USD in January 2023, further declining to 27,733 thousand USD in January 2024, and 14,595 thousand USD by February 2025. This trend suggests disposals, amortization, or impairments reducing the asset base over time.

Accumulated Amortization

Accumulated amortization shows a consistent increase (more negative) from -5,190 thousand USD in January 2021 to -27,733 thousand USD in January 2024, indicating ongoing amortization charges. However, it markedly reduces to -2,922 thousand USD in February 2025, possibly due to asset disposals or accounting adjustments.

Intangible Assets, Net Carrying Amount

The net carrying amount of intangible assets declines from 80,080 thousand USD in January 2021 to 21,961 thousand USD in January 2023, with missing data for January 2024, and is reported at 11,673 thousand USD in February 2025. This consistent downturn indicates amortization and impairment impacts outweigh additions.

Goodwill and Intangible Assets, Net

The total net value combining goodwill and intangible assets peaks dramatically from 24,423 thousand USD in February 2020 to approximately 466,957 thousand USD in January 2021 and remains around 458,179 thousand USD in January 2022. It then drops steeply to 46,105 thousand USD in January 2023, decreases to 24,083 thousand USD in January 2024, and slightly recovers to 171,191 thousand USD by February 2025. This pattern underscores significant impairment or divestment events post-2022, with limited subsequent asset recoveries or new acquisitions.

Overall, the data suggests periods of substantial acquisition activities or goodwill recognition early in the timeline, followed by notable amortization and impairment effects on intangible assets, resulting in decreased net carrying values across most categories. The re-emergence of franchise rights and partial recovery of net asset values in 2025 indicate potential new investments or strategic repositioning of the asset base.

Total Assets

The reported total assets demonstrate a consistent upward trend from approximately 3.28 billion US dollars in February 2020 to 7.60 billion US dollars in February 2025. The adjusted total assets follow a similar pattern, increasing steadily over the same period from around 3.26 billion to 7.44 billion US dollars. The gap between reported and adjusted total assets widens slightly over time, reflecting potential changes related to goodwill adjustments.

Stockholders' Equity

Reported stockholders’ equity increased significantly from about 1.95 billion US dollars in February 2020 to approximately 4.32 billion US dollars by February 2025. Adjusted stockholders’ equity shows a comparable trend, rising from about 1.93 billion to 4.16 billion US dollars during the same timeframe. Notably, there is a larger divergence between reported and adjusted values starting from 2021, indicating a more pronounced effect of goodwill or other adjustments on equity figures.

Net Income

Reported net income exhibits fluctuation with a decline from 645.6 million US dollars in 2020 to 588.9 million in 2021, followed by a substantial increase to 975.3 million in 2022. It then decreases to 854.8 million in 2023 but surges thereafter to 1.55 billion in 2024 and further to 1.81 billion US dollars in 2025. Adjusted net income mirrors reported values closely except for 2023, where adjusted net income is notably higher at 1.22 billion US dollars compared to reported figures. This suggests that certain non-recurring expenses or goodwill impairments may have affected the reported net income for that year.

Overall Observations

The company shows a strong growth trajectory in total assets and equity over the five-year period, reflecting expansion and possibly enhanced financial stability. The adjustments related to goodwill have a variable impact, especially evident in equity and net income for specific years. The upward trend in net income, particularly the sharp increase post-2022, points to improved profitability. The reconciliation between reported and adjusted figures suggests prudent consideration of intangible asset valuations in the financial statements.

The financial metrics show several distinct trends over the examined periods, reflecting changes in profitability, asset utilization, leverage, and overall returns.

Net Profit Margin

Reported net profit margin demonstrates some volatility, declining from 16.22% in 2020 to a low of 10.54% in 2023, before recovering to 17.14% in 2025. The adjusted net profit margin, which accounts for goodwill, shows a smoother upward trend after 2021, particularly improving from 15.01% in 2023 to 17.14% in 2025. This suggests that the underlying profitability, excluding goodwill effects, strengthened notably in the most recent years.

Total Asset Turnover

There is an overall enhancement in asset turnover, indicating improved efficiency in generating sales from assets. Reported total asset turnover rose from 1.21 in 2020 to peak at 1.45 in 2023, slightly declining afterward but remaining above earlier levels at 1.39 in 2025. The adjusted figures follow a similar pattern but consistently indicate somewhat higher turnover ratios, highlighting that the adjustment for goodwill reveals stronger asset productivity.

Financial Leverage

Financial leverage ratios fluctuate over the years but generally remain within a narrow band between 1.64 and 1.94. The adjusted financial leverage peaked at 1.94 in 2022 and then decreased slightly to 1.79 in 2025. The reported leverage exhibits a similar pattern but at slightly lower levels. This indicates a relatively stable capital structure with moderate reliance on debt or borrowing.

Return on Equity (ROE)

ROE shows significant variation. Reported ROE declines sharply after 2020, reaching 23.02% in 2021, then recovers and achieves the highest level of 41.97% in 2025. The adjusted ROE, which excludes goodwill effects, presents a more pronounced recovery pattern, climbing from 27.12% in 2021 to 43.57% in 2025. This highlights a strong recovery in equity returns, with adjustments improving the perception of profitability.

Return on Assets (ROA)

ROA trends mirror those of profitability and asset turnover. Reported ROA dips from 19.67% in 2020 to a low of 15.25% in 2023 but then increases to 23.87% in 2025. Adjusted ROA, similarly, improves from 15.5% in 2021 to 24.38% in 2025, indicating enhanced operational efficiency and earning power from total assets when goodwill is considered.

Overall, the data indicate that after a period of reduced profitability and efficiency around 2021 to 2023, there has been a notable recovery and improvement in key financial metrics through 2025. Adjustments for goodwill provide a more favorable perspective on profitability and asset utilization, suggesting underlying operational strength. The moderate and relatively stable financial leverage ratios imply a balanced approach to financing over time. The improvement in both ROE and ROA towards the end of the period points to increased effectiveness in using both equity and assets to generate returns.

The financial data reveals several notable trends in profitability as measured by both reported and adjusted net income alongside their respective profit margins over the six-year period.

Net Income Trends

Reported net income demonstrates variability with an initial decline from 645,596 thousand US dollars in 2020 to 588,913 thousand in 2021, followed by a significant increase in 2022 amounting to 975,322 thousand. This increase is not sustained in 2023, as reported net income decreases to 854,800 thousand. However, a strong upward trend resumes in 2024 and continues into 2025, reaching 1,550,190 thousand and 1,814,616 thousand respectively. Adjusted net income, which accounts for goodwill adjustments, aligns with reported figures initially but differs notably in 2023 where it rises to 1,217,292 thousand as opposed to the lower reported figure, and thereafter matches the reported amount in 2024 and 2025.

Net Profit Margin Patterns

The reported net profit margin follows a fluctuating pattern, starting at 16.22% in 2020, declining to 13.38% in 2021, then recovering to 15.59% in 2022, before experiencing a sharp decrease to 10.54% in 2023. Subsequently, it increases again to 16.12% in 2024 and further to 17.14% in 2025. Adjusted net profit margin is consistent with reported margins except in 2023 where it is significantly higher at 15.01%, reflecting the impact of goodwill adjustments, and then aligns with reported margins in the following years.

Insights and Implications

The divergence between reported and adjusted net income and margins in 2023 suggests that non-operational or non-recurring items, possibly related to goodwill, influenced the reported results, causing a discrepancy that adjustment corrects. The overall positive trajectory in net income and net profit margins from 2024 onwards indicates improved profitability performance. The fluctuations prior to this period reflect possible operational challenges or external factors affecting earnings and profitability consistency. The alignment of adjusted and reported figures in the later years suggests stabilization in the company's earnings quality and fewer extraordinary adjustments impacting results.

Total Assets

The reported total assets exhibit a consistent upward trend over the analyzed periods, increasing from approximately $3.28 billion in early 2020 to about $7.60 billion by early 2025. This nearly 2.3-fold increase indicates substantial growth in the company's asset base. Similarly, the goodwill-adjusted total assets show a parallel pattern of growth, rising from roughly $3.26 billion to $7.44 billion over the same timeframe. The adjustment for goodwill results in slightly lower asset values, but the overall rate of increase and trend remain consistent.

Total Asset Turnover

The reported total asset turnover ratio fluctuates but generally improves over the period. It starts at 1.21 in 2020, dips to 1.05 in 2021, then rises steadily to reach 1.39 by 2025. This pattern suggests an initial decline in efficiency followed by enhanced utilization of assets in generating revenue. The adjusted total asset turnover ratio, which accounts for goodwill, follows a similar but smoother pattern. It begins at 1.22 in 2020, decreases to 1.16 in 2021, then increases more consistently to reach 1.42 by 2025. The adjusted ratios are generally slightly higher, indicating that excluding goodwill from total assets may present a more favorable view of asset efficiency over time.

Insights

Overall, the data indicates significant growth in the asset base accompanied by improving efficiency in asset utilization. The initial dip in turnover ratios around 2021 may warrant further investigation to understand underlying causes. Following this period, both reported and adjusted turnover ratios demonstrate consistent improvement, reflecting stronger operational performance or better asset management. The close alignment between reported and adjusted figures suggests that goodwill adjustments, while relevant, do not dramatically alter the interpretation of asset growth and efficiency trends.

The analysis of the financial data over the six-year period reveals several key trends in the company's asset base, equity, and financial leverage, both on a reported and goodwill-adjusted basis.

Asset Growth

There has been a consistent and significant increase in total assets across the years. Reported total assets grew from approximately 3.28 billion USD in 2020 to about 7.60 billion USD by 2025, reflecting strong expansion. Adjusted total assets, which exclude goodwill, followed a similar upward trajectory, increasing from approximately 3.26 billion USD to 7.44 billion USD over the same period. The close alignment between reported and adjusted asset values suggests that goodwill constitutes a relatively stable proportion of total assets.

Stockholders’ Equity

Reported stockholders’ equity also showed robust growth, rising from nearly 1.95 billion USD in 2020 to approximately 4.32 billion USD in 2025. The adjusted equity, which eliminates goodwill, increased from about 1.93 billion USD to 4.16 billion USD, maintaining a pattern comparable to reported equity but at slightly lower levels. This growth indicates substantial retention of earnings or capital infusion, enhancing the company’s net worth over time.

Financial Leverage

Financial leverage, calculated as the ratio of total assets to stockholders’ equity, displayed some fluctuations during the period. The reported financial leverage ratio started at 1.68 in 2020, slightly dipped to 1.64 in 2021, then peaked at 1.80 in 2022 before declining to 1.68 in 2024, and finally rose again to 1.76 in 2025. The adjusted leverage ratio showed a similar but more pronounced pattern, reaching a high of 1.94 in 2022 and then decreasing before ending at 1.79 in 2025. These variations suggest changes in the company’s capital structure and the relative proportion of debt and equity financing, with a tendency toward moderate leverage throughout the years.

Insights on Goodwill Impact

The proximity of adjusted figures to reported values indicates goodwill has a modest but consistent impact on the balance sheet metrics. The difference in financial leverage between reported and adjusted measures is more evident in certain years, notably in 2022, which may reflect acquisitions or other goodwill-related accounting events influencing financial structure.

Overall, the financial data depicts strong asset and equity growth coupled with moderate leverage fluctuations, signaling an expanding and financially stable organization managing its capital efficiently despite periodic variations in leverage levels.

The analysis of the financial performance over the reported periods reveals several notable trends in income, equity, and return on equity (ROE) metrics.

Net Income

Reported net income exhibits fluctuations with an initial dip from 645,596 thousand US dollars in early 2020 to 588,913 thousand in early 2021, followed by a substantial increase reaching 975,322 thousand in early 2022. Thereafter, a moderate decline occurs in 2023 to 854,800 thousand before experiencing significant growth in subsequent periods, culminating in 1,814,616 thousand US dollars by early 2025.

Adjusted net income, which accounts for goodwill adjustments, aligns closely with reported figures in earlier years but diverges notably from 2023 onwards. The adjusted figure rises sharply to 1,217,292 thousand US dollars in 2023, matching reported income in later years and maintaining the upward trajectory observed in reported data.

Stockholders’ Equity

Reported stockholders’ equity shows consistent growth throughout all periods, increasing from 1,952,218 thousand US dollars in 2020 to 4,324,047 thousand by 2025. The increase is relatively steady, with a marked acceleration between 2023 and 2024.

Adjusted stockholders’ equity also increases over time but at a generally slower pace compared to reported figures, likely reflecting the impact of goodwill adjustments. The gap between reported and adjusted equity widens slightly in earlier years before converging more closely in the most recent periods.

Return on Equity (ROE)

Reported ROE demonstrates variability, beginning at a strong 33.07% in 2020, decreasing notably in 2021 to 23.02%, then rebounding to a peak of 41.97% by 2025. The pattern reveals a dip in performance in 2021 and 2023 followed by recoveries, highlighting volatility in profit generation relative to equity.

Adjusted ROE, which factors in equity adjustments, presents higher values than reported ROE in most periods, with a notable increase from 27.12% in 2021 to 43.57% in 2025. This suggests that after removing goodwill effects, the company’s profitability relative to tangible equity is stronger, particularly in the latter periods.

Overall, the data indicate a positive growth trajectory in profitability and equity base, with some fluctuations in income and efficiency of equity utilization. Adjustments for goodwill provide a clearer view of underlying performance, reflecting improved profitability metrics especially in the most recent years. The substantial increases in both net income and ROE by early 2025 suggest enhanced operational effectiveness or favorable market conditions contributing to stronger financial outcomes.

The financial data reveals notable trends in both net income and asset base over the observed periods. Reported net income exhibited fluctuation, decreasing from approximately $645.6 million in early 2020 to roughly $588.9 million in early 2021, then increasing substantially to over $975.3 million in early 2022. The figure experienced a slight decline in early 2023 to about $854.8 million, followed by strong growth, reaching approximately $1.55 billion in early 2024 and further to around $1.81 billion in early 2025.

Adjusted net income closely mirrors the reported figures up to early 2022 but diverges thereafter. Starting early 2023, the adjusted net income shows a marked increase to about $1.22 billion, aligning with the growth trend seen in later reported net income values. This adjustment appears to smooth the decline observed in reported net income for early 2023, suggesting the presence of one-off or non-recurring items in that period.

The total assets, both reported and adjusted, demonstrate a consistent upward trajectory throughout the timeline. Reported total assets grew from roughly $3.28 billion in early 2020 to approximately $7.61 billion by early 2025. Adjusted total assets follow a similar growth pattern but are slightly lower in absolute terms, especially noticeable from early 2021 onward, indicating adjustments that possibly exclude goodwill or other intangible assets.

Return on Assets (ROA) figures, both reported and adjusted, indicate varying profitability relative to the asset base. Reported ROA declines from around 19.7% in early 2020 to about 14.1% in early 2021, then recovers to near 19.7% in early 2022, followed by another dip to 15.3% in early 2023. A strong improvement occurs thereafter, with ROA reaching approximately 21.9% in early 2024 and rising further to nearly 23.9% in early 2025.

The adjusted ROA presents a smoother and generally higher profitability measure compared to the reported figures, starting at 19.8% in early 2020 and declining less sharply to 15.5% in early 2021. It subsequently rises more steadily to 21.4% in early 2022 and maintains an upward trajectory through early 2025, culminating at about 24.4%. This suggests that adjustments improve the perceived efficiency of asset utilization, potentially by removing the impact of impairment or amortization of goodwill.

Overall, the financial analysis reveals strong growth in net income and total assets alongside improving returns on assets when adjusted for goodwill. The adjustments provide a clearer view of operating performance, highlighting the underlying improvements beyond reported fluctuations. This reflects the company’s expanding operations and enhanced profitability over the six-year period.

Net Income

Fluctuated initially with declines and rebounds but showed strong growth in the latter years, especially when adjusted.

Total Assets

Consistently increased, with adjusted assets slightly lower than reported, indicating the effect of goodwill or similar adjustments.

Return on Assets (ROA)

Reported ROA experienced volatility, while adjusted ROA presented a steadier and generally higher profitability trend.

Implications

Adjustments for goodwill and other factors provide improved insight into sustainable profitability and asset efficiency, showing the company’s financial health strengthening particularly from early 2023 onward.