lululemon athletica inc. (NASDAQ:LULU)

The financial analysis of the data over the observed periods reveals several notable trends. There is a general increase in net operating profit after taxes (NOPAT) across the years, with some fluctuations. After a decrease from 711,860 thousand USD in early 2020 to 680,052 thousand USD in early 2021, NOPAT substantially rose to over one million thousand USD by early 2022. However, it then declined to 933,695 thousand USD in early 2023 before experiencing significant growth, reaching 1,622,788 thousand USD in early 2024 and further increasing to 1,928,398 thousand USD in early 2025.

Invested capital shows a consistent upward trend throughout the period. The capital invested increased steadily from approximately 3,008,240 thousand USD in early 2020 to 6,507,336 thousand USD in early 2025, indicating ongoing expansion or reinvestment into the company’s operations.

The cost of capital remains relatively stable, fluctuating marginally around 16.3% to 16.5%, with the highest being 16.51% in early 2021 and the lowest at 16.29% in early 2025. This stability suggests no significant changes in the company’s required return or risk profile during this timeframe.

Regarding economic profit, there is a pattern of volatility. It peaked notably in early 2020 at 218,584 thousand USD before dropping sharply to 73,551 thousand USD in early 2021. It then climbed to 395,460 thousand USD in early 2022, followed by a decrease to 190,597 thousand USD in early 2023. Economic profit then sharply increased in the last two measured periods, reaching 637,993 thousand USD in early 2024 and 868,430 thousand USD in early 2025. This indicates the company’s profitability above its cost of capital improved significantly toward the end of the period under review.

Summary of trends:

Steady growth in invested capital indicates increased resource commitment.

NOPAT shows strong overall growth with some interim declines, suggesting operational profitability improvements amid varying conditions.

Cost of capital remains stable, implying consistent investor expectations and risk levels.

Economic profit fluctuations reflect periods of both challenged and enhanced value creation, with a clear improvement in recent years.

Net Income

The net income exhibited a fluctuating yet generally upward trend over the analyzed periods. Starting at 645,596 thousand US dollars in February 2020, it declined to 588,913 thousand US dollars by January 2021. Subsequently, there was a significant increase to 975,322 thousand US dollars in January 2022, followed by a decrease to 854,800 thousand US dollars in January 2023. However, the net income surged notably in the most recent periods, reaching 1,550,190 thousand US dollars in January 2024 and further increasing to 1,814,616 thousand US dollars by February 2025. This overall trend suggests growing profitability with some volatility.

Net Operating Profit After Taxes (NOPAT)

NOPAT followed a pattern similar to net income, indicating consistent operational performance trends. Beginning at 711,860 thousand US dollars in February 2020, it experienced a reduction to 680,052 thousand US dollars in January 2021. This was followed by a sharp increase to 1,040,291 thousand US dollars in January 2022 and a slight decline to 933,695 thousand US dollars in January 2023. The figure then escalated substantially in the subsequent years to 1,622,788 thousand US dollars in January 2024 and 1,928,398 thousand US dollars by February 2025. The increase in NOPAT over time reflects enhanced operating efficiency and profitability after accounting for taxes.

Summary Insights

Both net income and NOPAT demonstrate an overall upward trajectory despite short-term decreases around the early 2021 and 2023 periods. The strong rebound and substantial increases in the latest years highlight improved profitability and operational effectiveness. The parallel trends of net income and NOPAT suggest that the company's core operations are driving earnings growth, with effective cost management and tax impacts potentially influencing fluctuations. The data points to a positive financial health outlook with expanding profit-generating capabilities over the period analyzed.

Income Tax Expense

The income tax expense demonstrates a general increasing trend over the analyzed years. Starting at approximately $252 million in early 2020, it slightly decreased to around $230 million in early 2021. Following this period, a notable upward trajectory is observed, with values rising to approximately $359 million in early 2022, then increasing more pronouncedly to about $478 million in early 2023. This upward trend continues with values reaching approximately $626 million in early 2024 and further escalating to around $761 million by early 2025.

Cash Operating Taxes

Cash operating taxes show a somewhat similar pattern, albeit with more variation. Initially, the amount decreased from roughly $233 million in early 2020 to nearly $202 million in early 2021. Subsequently, there is a significant increase to about $371 million in early 2022 and a further rise to nearly $475 million in early 2023. From early 2023 to early 2024, there is a substantial increase to approximately $664 million, followed by a slight decrease to around $717 million in early 2025.

Comparative Insights

Both income tax expense and cash operating taxes exhibit upward trends over the observed period, with the most significant growth occurring after early 2021. The cash operating taxes display higher volatility with a notable spike followed by a minor decline in the last year, whereas income tax expense consistently increases year over year after an initial dip. The rise in these tax-related expenses may reflect growth in taxable income or changes in tax regulation impacting the financial charges of the company.

Total Reported Debt & Leases

The total reported debt and leases exhibit a consistent upward trend over the examined periods. Starting from approximately 740 million US dollars in early 2020, the debt level increased steadily each year, reaching over 1.57 billion US dollars by early 2025. The most significant incremental growth appears between the years 2023 and 2024, where the debt increased by more than 330 million US dollars, indicating a possible expansion phase or increased financial leverage.

Stockholders' Equity

Stockholders' equity also shows a steady and substantial growth throughout the periods. Beginning at roughly 1.95 billion US dollars in early 2020, equity rose consistently each year, culminating in approximately 4.32 billion US dollars by early 2025. The most pronounced growth in equity occurs between 2023 and 2024, with an increase of nearly 1.1 billion US dollars, suggesting enhanced retained earnings or additional equity financing.

Invested Capital

Invested capital reflects a continuous growth trajectory over the analyzed time frame. From about 3.01 billion US dollars in early 2020, invested capital climbs steadily, reaching approximately 6.51 billion US dollars by early 2025. The largest annual increase is observed between 2023 and 2024, mirroring the substantial growth seen in both debt and equity in the same period. This pattern indicates increased overall capital investment, potentially for business expansion or asset acquisition.

Overall Summary

The financial data collectively suggest that the company is in a phase of expansion, supported by increasing leverage and equity. Both liabilities and shareholders' funds have grown significantly, with invested capital nearly doubling over the five-year span. The pronounced increases between 2023 and 2024 across all key financial measures highlight a potentially strategic deployment of resources. This expansion could be reflective of investments aimed at enhancing the company's market position or operational capacity.

Economic Profit

The economic profit demonstrates significant fluctuations over the observed periods. Initially, it decreases considerably from 218,584 thousand US dollars to 73,551 thousand US dollars. This is followed by a sharp increase reaching 395,460 thousand US dollars, then a decline again to 190,597 thousand US dollars. However, from this point forward, there is a strong positive trend, with economic profit rising notably to 637,993 thousand US dollars and further to 868,430 thousand US dollars by the last period.

Invested Capital

Invested capital shows a consistent upward trend throughout the periods analyzed. Starting at 3,008,240 thousand US dollars, it steadily increases each year, reaching 3,672,427, then 3,909,051, continuing to 4,526,979, and moving up significantly to 5,978,501 and 6,507,336 thousand US dollars. This suggests ongoing investment and expansion in the asset base over time.

Economic Spread Ratio

The economic spread ratio exhibits variability but generally presents an improving trend. The ratio begins at 7.27%, drops sharply to 2%, then climbs sharply to 10.12%. It decreases again to 4.21% but then increases substantially to 10.67% and further to 13.35% by the most recent period. The rising trend at the end indicates improved economic returns in relation to the cost of capital.

Summary

The data reflects a business experiencing variability in profitability in the earlier years, followed by marked improvement in economic profit and spread ratios in the final periods. This improvement comes alongside a steady increase in invested capital, indicating a greater scale of operations with enhanced efficiency or value generation from investments over time.

Economic Profit

The economic profit exhibited notable fluctuations over the periods under review. Starting at $218,584 thousand, it declined sharply to $73,551 thousand in the following year. Subsequently, there was a significant recovery to $395,460 thousand, followed by another drop to $190,597 thousand. In the most recent years, economic profit experienced robust growth, reaching $637,993 thousand and further increasing to $868,430 thousand. This pattern indicates periods of volatility interspersed with strong upward momentum in economic value creation.

Adjusted Net Revenue

Adjusted net revenue demonstrated consistent and substantial growth across all periods. Beginning at approximately $4,000,297 thousand, revenue increased steadily every year, reaching $4,437,314 thousand, then surging to $6,308,964 thousand. The growth trend continued with revenues climbing to $8,153,801 thousand, followed by $9,674,279 thousand, and peaking at $10,589,999 thousand in the latest period. This persistent upward trajectory reflects expanding business scale and market penetration.

Economic Profit Margin

The economic profit margin showed variability similar to economic profit, yet highlighted improvements over time. Initially at 5.46%, it decreased significantly to 1.66%, then rebounded decisively to 6.27%. Another dip followed with a margin of 2.34%. Thereafter, profit margins strengthened considerably, reaching 6.59% and improving further to 8.2%. This pattern suggests periods of efficiency fluctuations but overall enhancement in the ability to convert adjusted net revenue into economic profit.

Summary

Overall, the data reveals a trajectory of substantial revenue growth coupled with volatile economic profitability. Despite interim declines, the company demonstrated a strong recovery in economic profit and profit margins in the latest periods. The elevating profit margins alongside rising revenues indicate increased operational efficiency and value generation in recent years, suggesting favorable prospects for sustainable profitability going forward.