lululemon athletica inc. (NASDAQ:LULU)

The analysis of the quarterly financial data reveals several notable trends and fluctuations over the observed periods.

Cost of Goods Sold (COGS) as a Percentage of Net Revenue

The COGS percentage exhibits variability, ranging from a low near -39.58% to a high of approximately -48.71%. Notably, it decreased significantly around early 2020, reflecting improved cost management or product mix, before rising again mid-year likely due to pandemic-related impacts. From mid-2021 onward, there is a general downward trend in COGS percentage, suggesting enhanced operational efficiency.

Gross Profit Margin

Gross profit margin generally correlates inversely with COGS fluctuations. It peaked around early 2020 at approximately 58%, declined sharply mid-2020, then recovered and stabilized between 55% and 60% from 2021 through 2025, indicating solid profitability at the gross level despite market challenges.

Selling, General and Administrative Expenses (SG&A)

SG&A expenses as a percentage of net revenue show significant volatility, moving from about -28% to nearly -46%. The most considerable increase occurred around May 2020, coinciding with the rise in COGS, likely reflecting elevated costs related to operational adjustments. Subsequent quarters saw fluctuations but a partial reversion toward lower SG&A percentages, suggesting efforts in expense control.

Impairment of Assets and Restructuring Costs

This category appears intermittently with a notable charge of -14.72% near early 2023 and smaller impacts before and after. These sporadic charges indicate occasional write-downs or restructuring activities affecting operational profitability in specific quarters.

Amortization of Intangible Assets

Amortization remains a minor but consistent expense, generally under -0.2% of net revenue, and shows a slight decreasing trend toward more recent quarters, indicating stabilized intangible asset amortization costs.

Acquisition-Related Expenses

These expenses are sporadic and relatively minor, mostly under -1.3%, with some quarters featuring negligible or no charges, pointing to occasional acquisition activities without a persistent impact on margins.

Gain on Disposal of Assets

Gains are infrequent and minor, with a single instance noted at 0.54%, implying limited impact from asset sales on overall profitability.

Income from Operations

Operating income experienced wide fluctuations, from a low of about 5.02% to highs approaching 29.8%. The lowest operating margins occurred during early pandemic quarters of 2020, reflecting stress from external conditions. Recovery is evident in the following periods, with consistent improvements and peaks above 28% in several recent quarters, demonstrating resilience and operational strength.

Other Income (Expense), Net

Other income fluctuates around zero, generally showing small positive contributions ranging from 0.01% to just over 1%. This suggests minor incidental income or expenses that have marginal but positive effects on pre-tax profit.

Income Before Income Tax Expense

This metric closely mirrors operating income trends, varying between about 5.2% and 29.95%. It highlights the operational performance as the primary driver of profitability before taxes.

Income Tax Expense

Income tax expense shows variability from about -0.81% to -8.63%. The relatively lower tax rates during some quarters may reflect tax planning or credit utilization, whereas higher rates align with periods of stronger earnings.

Net Income

The net income margin follows the cyclical pattern of earnings before taxes, with lows near 4.32% during weak operational periods in 2023 and highs exceeding 21% in early 2020 and late 2024. This pattern underscores the impact of operational performance, taxation, and occasional charges on bottom-line profitability.

Overall, the data indicate resilience through volatile market conditions, particularly those associated with the global pandemic. Gross margins improved post-initial impact, while expense management fluctuated but showed signs of improvement. Sporadic impairment and acquisition costs influenced certain quarters but did not destabilize long-term profit trends. The company demonstrates a capacity to restore and maintain robust operating and net income margins over time.