lululemon athletica inc. (NASDAQ:LULU)

The analysis of the annual property, plant, and equipment data reveals several key trends over the examined periods. The gross property and equipment values show a steady and marked increase from 1,193,369 thousand US dollars in early 2020 to 3,241,666 thousand US dollars in early 2025. This represents a significant investment in fixed assets over the years.

Inspection of individual asset categories highlights the following observations:

Land

The value of land has remained relatively stable with minor fluctuations, increasing slightly from 71,829 thousand US dollars in 2020 to a peak of 80,692 thousand in 2023, then declining moderately to 74,461 thousand by 2025.

Buildings

Building values exhibit a slight declining trend overall, starting at 30,187 thousand US dollars in 2020, peaking marginally in 2022 at 30,880 thousand, then gradually decreasing to 27,655 thousand by 2025.

Leasehold improvements

Leasehold improvements show a strong upward trajectory, more than doubling over the five-year span from 489,202 thousand US dollars in 2020 to 1,227,247 thousand in 2025, indicating substantial capital expenditure in leased properties or improvement of leased assets.

Furniture and fixtures

There is a steady increase in furniture and fixtures, rising from 109,533 thousand US dollars in 2020 to 177,651 thousand in 2025, reflecting ongoing investment in internal facilities and office equipment.

Computer hardware

Computer hardware assets have increased consistently, growing from 95,399 thousand US dollars in 2020 to 202,479 thousand in 2025, which suggests sustained enhancement of technological infrastructure.

Computer software

Computer software demonstrates a pronounced growth trend, starting at 336,768 thousand US dollars in 2020 and expanding significantly to 1,274,322 thousand by 2025. This indicates a strategic emphasis on software assets, likely related to digital platforms or operational systems.

Equipment and vehicles

This category shows an increasing trend with some fluctuations, rising from 19,521 thousand US dollars in 2020 to a peak of 51,453 thousand in 2025. The rise suggests ongoing renewal or expansion of operational machinery and transportation assets.

Work in progress

Work in progress has experienced substantial growth moving from 40,930 thousand US dollars in 2020 to a peak of 247,943 thousand in 2024, before slightly decreasing to 206,398 thousand in 2025. This pattern reflects significant investment in projects not yet completed by the latest reporting date.

Accumulated depreciation

Accumulated depreciation has increased steadily in negative value, from -521,676 thousand US dollars in 2020 to -1,461,049 thousand in 2025. This rise aligns with the growth in gross property and equipment and reflects the ongoing consumption of assets' economic value over time.

Net property and equipment

The net value of property and equipment, after accounting for accumulated depreciation, has also increased substantially from 671,693 thousand US dollars in 2020 to 1,780,617 thousand in 2025, indicating an overall strengthening of the company’s asset base despite depreciation.

In summary, the company has demonstrated consistent capital expenditure across most categories of property, plant, and equipment, particularly in leasehold improvements and computer software, evidencing a strategic focus on enhancing leased spaces and digital capabilities. Accumulated depreciation has grown in line with asset additions, yet the net asset base continues to expand robustly, supporting potential future operational capacities.

Average Age Ratio

The average age ratio showed an increasing trend from 46.51% in early 2020 to a peak of 50.7% in early 2021, followed by a gradual decline to 45.37% in early 2023. It remained relatively stable around 45.36% to 46.13% in the most recent years, indicating a slight reduction in the average age of property, plant, and equipment after 2021.

Estimated Total Useful Life

The estimated total useful life of the assets increased from 7 years in 2020 to 8 years in the period between 2021 and 2023. However, there was a reversion back to 7 years starting from 2024 through 2025, suggesting a reassessment or change in expected asset longevity in recent years.

Estimated Age, Time Elapsed Since Purchase

The estimated age of assets was 3 years in 2020, increased to 4 years for the 2021 and 2022 periods, and then reverted back to 3 years from 2023 through 2025. This pattern implies asset acquisitions or disposals impacting the average age, with relatively newer assets present in the most recent periods.

Estimated Remaining Life

The estimated remaining life of the assets remained consistently at 4 years throughout all reported periods, indicating stable assumptions regarding the remaining usability of the assets despite fluctuations in average age and total useful life estimates.

Property and Equipment, Gross

The gross value of property and equipment demonstrates a consistent upward trend over the period analyzed. Starting from approximately $1.19 billion in early 2020, it increased steadily each year, culminating at roughly $3.24 billion by early 2025. This growth reflects substantial investments in acquiring or expanding physical assets.

Accumulated Depreciation

Accumulated depreciation also shows a marked increase, rising from about $522 million in 2020 to approximately $1.46 billion in 2025. This accumulation indicates the ongoing aging and usage of assets over time, with the annual increments suggesting the company is maintaining a typical depreciation schedule relative to its asset base growth.

Land

The value of land remains relatively stable throughout the period, fluctuating slightly above and below the $75 million mark. Minor variations do not signal significant acquisitions or disposals of land, implying stability in land holdings compared to other asset types.

Average Age Ratio

The average age ratio of the property and equipment displayed moderate variability, starting at 46.51% in 2020, peaking near 50.7% in 2021, then declining slightly before stabilizing around 45-46% thereafter. This pattern suggests a dynamic asset replacement or addition strategy, where older assets are periodically supplemented with newer investments, maintaining a balanced asset age profile.

Overall Trends

Collectively, the data suggests a strategy emphasizing substantial growth in physical assets, as evidenced by the increasing gross property and equipment figures. The steady rise in accumulated depreciation aligns with this expansion, reflecting asset aging consistent with industry norms. Stable land values indicate a focus on other asset classes for growth. The average age ratio's fluctuations highlight ongoing asset management to balance asset renewal and depreciation.

The data reveals a consistent upward trend in the gross value of property and equipment over the examined periods. Starting at US$1,193,369 thousand, the gross property and equipment increased steadily to US$3,241,666 thousand by the most recent period. This indicates significant ongoing investment in fixed assets, with a more than twofold increase over the time span.

In contrast, the value attributed to land remained relatively stable throughout the periods, fluctuating slightly within the range of approximately US$71,829 thousand to US$80,692 thousand before declining somewhat in the final recorded period to US$74,461 thousand. This stability in land value suggests that most growth in property and equipment is likely due to other asset categories, such as buildings or equipment, rather than land acquisition.

Depreciation expense related to property and equipment shows a marked increase, rising from US$161,800 thousand to US$443,300 thousand. This escalation corresponds with the increase in gross property and equipment, signalling the growing scale and aging of fixed assets. Notably, depreciation expense growth is more rapid in later years, which might reflect higher acquisitions in prior periods or accelerated expense recognition.

The estimated total useful life of property and equipment exhibits minor variation, mostly maintained at 8 years until recently, when it decreased back to 7 years. This slight reduction in useful life could indicate changes in asset composition or a reassessment of asset longevity, potentially affecting depreciation schedules and expense recognition moving forward.

Gross Property and Equipment

Increased steadily from US$1,193,369 thousand to US$3,241,666 thousand over the periods, demonstrating significant capital investment.

Land Value

Remained relatively constant with minor fluctuations, reflecting stability in land holdings.

Depreciation Expense

Rose considerably from US$161,800 thousand to US$443,300 thousand, indicating higher asset base and possibly accelerated depreciation.

Estimated Useful Life

Varied slightly, holding mostly at 8 years before decreasing to 7 years, suggesting a reassessment of asset longevity.

The financial data for property, plant, and equipment reveals significant trends in accumulated depreciation, depreciation expense, and asset age over the examined periods.

Accumulated Depreciation

Accumulated depreciation shows a consistent and substantial increase year over year. Starting from US$521,676 thousand in the earliest period, it rises steadily to US$1,461,049 thousand by the latest period. This continuous growth suggests ongoing depreciation of a sizable asset base, reflecting both the aging of assets and possibly the addition of new assets being depreciated over time.

Depreciation Expense Related to Property and Equipment

The depreciation expense exhibits a marked upward trajectory across the periods observed. Beginning at US$161,800 thousand, it increases progressively each year, reaching US$443,300 thousand in the most recent period. This rise in depreciation expense may indicate increased capital expenditures in property and equipment or changes in depreciation methods or asset lifespan estimates. The steepness of this growth points toward a growing impact of depreciation on the company's profitability and cash flow considerations.

Time Elapsed Since Purchase

The time elapsed since purchase fluctuates slightly but remains relatively stable between three and four years. This consistency suggests a relatively young asset base or a policy of acquiring and depreciating assets within a similar lifespan range.

In summary, the data indicates a dynamically expanding asset base with rising depreciation charges corresponding to this growth. The regular increase in accumulated depreciation and expense implies sustained investment in property and equipment, with asset aging maintained within a short period, highlighting a focus on relatively recent acquisitions or replacements.

Property and Equipment, Net

The net value of property and equipment demonstrates a consistent upward trend over the periods analyzed. Starting at approximately $672 million in early 2020, the value rises steadily each year, reaching about $1.78 billion by early 2025. This represents an increase of roughly 165% across the six-year span, indicating ongoing investment in or capital additions to property and equipment assets.

Land

The land value displays relative stability throughout the periods, with minor fluctuations. Initial valuation at around $71.8 million in 2020 shifts slightly, peaking near $80.7 million in early 2023 before declining modestly to approximately $74.5 million by early 2025. The overall changes suggest limited acquisition or disposals of land assets, maintaining a fairly constant base value.

Depreciation Expense Related to Property and Equipment

Depreciation expense shows a clear and substantial growth over the examined timeframe, increasing from $161.8 million in early 2020 to $443.3 million in early 2025, nearly tripling. This growth aligns with the increasing net property and equipment values, reflecting higher depreciation charges due to asset additions and capital expenditures.

Estimated Remaining Life

The estimated remaining life of property and equipment remains constant at 4 years across all periods. This consistency implies stable asset depreciation schedules without changes in the estimated useful life assumptions.

Overall Analysis

The data indicate a strategic focus on expanding or upgrading property and equipment assets, as evidenced by the significant increase in net values and corresponding depreciation expenses. The steady land valuation suggests that growth is predominantly related to other types of property and equipment rather than land acquisitions. The constant estimated remaining life reflects a stable approach in asset life management. These trends collectively point to ongoing investment efforts and a resulting increase in asset base, which impacts depreciation and, consequently, expense recognition on the income statement.