Economic Value Added (EVA)
EVA is registered trademark of Stern Stewart.
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
lululemon athletica inc., economic profit calculation
US$ in thousands
Based on: 10-K (reporting date: 2026-02-01), 10-K (reporting date: 2025-02-02), 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).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2026 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 1,600,923 – 18.14% × 6,957,618 = 338,604
The financial performance, as measured by economic profit, demonstrates a significant improvement over the observed period. Initially, the entity experienced a negative economic profit, but subsequently achieved substantial positive economic profit, although with some fluctuation. This analysis details the trends in net operating profit after taxes, cost of capital, invested capital, and ultimately, economic profit.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT increased substantially from 2021 to 2022, more than doubling. A decrease was then observed between 2022 and 2023. However, NOPAT experienced a significant increase again in 2024, continuing to rise in 2025 before decreasing slightly in 2026. Overall, a clear upward trend in NOPAT is evident, despite the intermediate decline.
- Cost of Capital
- The cost of capital remained relatively stable between 2021 and 2024, fluctuating within a narrow range around 19%. A noticeable decrease in the cost of capital occurred in 2025 and 2026, suggesting improved financing conditions or a reduced risk profile.
- Invested Capital
- Invested capital consistently increased throughout the period. The rate of increase accelerated from 2022 to 2024, indicating significant investment in the business. The growth rate of invested capital moderated in 2025 and 2026, but continued to show positive progression.
- Economic Profit
- Economic profit transitioned from a loss of approximately 27 million US dollars in 2021 to a substantial profit of 288 million US dollars in 2022. While economic profit decreased to 67 million US dollars in 2023, it rebounded strongly in 2024, reaching 475 million US dollars. Further growth was observed in 2025, peaking at 693 million US dollars, before declining to 339 million US dollars in 2026. The overall trend demonstrates a significant and sustained improvement in economic profit generation, despite the fluctuations.
The observed increases in NOPAT and the decreasing cost of capital contributed positively to the improvement in economic profit. The consistent growth in invested capital, while requiring ongoing profitability to maintain positive economic profit, appears to be supporting the expansion of the business and its ability to generate returns.
AI Ask an analyst for more
Net Operating Profit after Taxes (NOPAT)
lululemon athletica inc., NOPAT calculation
US$ in thousands
Based on: 10-K (reporting date: 2026-02-01), 10-K (reporting date: 2025-02-02), 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).
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 2026 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 1,798,441 × 4.40% = 79,131
5 2026 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 79,131 × 21.00% = 16,618
6 Addition of after taxes interest expense to net income.
Net operating profit after taxes (NOPAT) and net income both demonstrate a general upward trajectory over the observed period, though with some fluctuations. NOPAT consistently exceeds net income throughout the timeframe, indicating the presence of non-operating expenses or other factors reducing reported net income.
- Overall Trend
- From January 31, 2021, to February 1, 2026, NOPAT generally increased. A significant rise is observed between 2022 and 2024, followed by a slight decrease in the most recent year presented. The period between 2021 and 2024 shows a robust growth pattern.
- Year-over-Year Changes
- NOPAT increased from US$680,052 thousand in 2021 to US$1,040,291 thousand in 2022, representing a substantial year-over-year growth. A moderate decrease occurred between 2022 and 2023, with NOPAT reaching US$933,695 thousand. However, 2024 saw a significant rebound, with NOPAT climbing to US$1,622,788 thousand. The growth slowed in 2025, reaching US$1,928,398 thousand, and then decreased slightly to US$1,600,923 thousand in 2026.
- Relationship to Net Income
- The difference between NOPAT and net income remains positive across all reported years. This suggests that non-operating items, such as interest expense or one-time gains/losses, are impacting the bottom line. The magnitude of this difference varies year to year, but consistently, NOPAT provides a higher measure of operating profitability than net income.
- Recent Performance
- The most recent two years (2025 and 2026) show a deceleration in NOPAT growth. While NOPAT increased from 2024 to 2025, it decreased from 2025 to 2026. This shift warrants further investigation to determine the underlying causes, such as changes in operating costs, revenue growth, or tax rates.
In summary, the organization demonstrates a generally positive trend in NOPAT over the analyzed period, with a notable acceleration in growth between 2021 and 2024. However, the recent slowdown in growth suggests a potential shift in the company’s operating performance that merits further scrutiny.
AI Ask an analyst for more
Cash Operating Taxes
lululemon athletica inc., cash operating taxes calculation
US$ in thousands
Based on: 10-K (reporting date: 2026-02-01), 10-K (reporting date: 2025-02-02), 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).
The reported income tax expense and cash operating taxes demonstrate a consistent upward trend from 2021 through 2024, followed by a slight shift in 2025 and 2026. Both metrics increased substantially over the observed period, indicating a growing tax burden alongside overall financial performance.
- Income Tax Expense Trend
- Income tax expense increased from US$230.437 million in 2021 to US$625.545 million in 2024, representing a significant rise. This growth slowed in 2025, with expense reaching US$761.461 million, before decreasing to US$659.784 million in 2026. The 2026 value, while lower than 2025, remains considerably higher than the 2021 figure.
- Cash Operating Taxes Trend
- Cash operating taxes mirrored the trend of income tax expense, increasing from US$202.048 million in 2021 to US$664.080 million in 2024. Similar to income tax expense, the rate of increase moderated in 2025, reaching US$717.311 million, and then increased slightly to US$725.456 million in 2026. The 2026 value is substantially higher than the 2021 amount.
- Relationship Between Metrics
- Cash operating taxes consistently remained below income tax expense across all reported years. The difference between the two metrics varied annually, but generally remained within a range of approximately US$20 million to US$50 million. This suggests potential timing differences in the recognition of tax liabilities and actual cash payments.
The observed increases in both income tax expense and cash operating taxes likely correlate with increased profitability. The slight decrease in income tax expense in 2026, while cash operating taxes continued to rise, warrants further investigation to determine the underlying cause, potentially related to deferred tax asset adjustments or changes in tax regulations.
AI Ask an analyst for more
Invested Capital
lululemon athletica inc., invested capital calculation (financing approach)
US$ in thousands
Based on: 10-K (reporting date: 2026-02-01), 10-K (reporting date: 2025-02-02), 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).
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.
Over the observed six-year period, a consistent upward trend is evident in all three financial items presented. Total reported debt & leases, stockholders’ equity, and invested capital all demonstrate growth from January 31, 2021, through February 1, 2026. The rate of increase, however, varies across these items.
- Total Reported Debt & Leases
- Total reported debt & leases exhibits a steady increase throughout the period, beginning at US$798,681 thousand in 2021 and reaching US$1,798,441 thousand in 2026. The growth appears to accelerate from 2023 onwards, with larger absolute increases year-over-year compared to the earlier period. This suggests a potential shift towards increased reliance on debt financing or significant capital lease obligations.
- Stockholders’ Equity
- Stockholders’ equity also shows consistent growth, starting at US$2,558,566 thousand in 2021 and culminating in US$4,961,840 thousand in 2026. While the growth is consistent, the rate of increase is notably higher between 2022 and 2024, indicating substantial increases in retained earnings or equity issuances during those years. The rate of growth moderates in the final two years.
- Invested Capital
- Invested capital, representing the sum of debt and equity, demonstrates the most substantial growth in absolute terms. It increases from US$3,672,427 thousand in 2021 to US$6,957,618 thousand in 2026. The growth trajectory mirrors the combined trends of debt and equity, with a pronounced acceleration beginning in 2023. This indicates a significant expansion of the company’s asset base funded by both debt and equity.
The consistent growth in invested capital, coupled with the accelerating trend in debt, warrants further investigation into the company’s capital allocation strategy and its ability to generate returns commensurate with the increased capital employed. The relative proportions of debt and equity within invested capital also merit attention, as changes in this mix can impact financial risk and cost of capital.
AI Ask an analyst for more
Cost of Capital
lululemon athletica inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 18,411,394) | 18,411,394) | ÷ | 20,209,835) | = | 0.91 | 0.91 | × | 19.58% | = | 17.83% | ||
| Operating lease liability3 | 1,798,441) | 1,798,441) | ÷ | 20,209,835) | = | 0.09 | 0.09 | × | 4.40% × (1 – 21.00%) | = | 0.31% | ||
| Total: | 20,209,835) | 1.00 | 18.14% | ||||||||||
Based on: 10-K (reporting date: 2026-02-01).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 41,201,220) | 41,201,220) | ÷ | 42,777,011) | = | 0.96 | 0.96 | × | 19.58% | = | 18.85% | ||
| Operating lease liability3 | 1,575,791) | 1,575,791) | ÷ | 42,777,011) | = | 0.04 | 0.04 | × | 4.30% × (1 – 21.00%) | = | 0.13% | ||
| Total: | 42,777,011) | 1.00 | 18.98% | ||||||||||
Based on: 10-K (reporting date: 2025-02-02).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 60,337,715) | 60,337,715) | ÷ | 61,740,997) | = | 0.98 | 0.98 | × | 19.58% | = | 19.13% | ||
| 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 | 19.20% | ||||||||||
Based on: 10-K (reporting date: 2024-01-28).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 40,732,106) | 40,732,106) | ÷ | 41,802,440) | = | 0.97 | 0.97 | × | 19.58% | = | 19.07% | ||
| 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 | 19.14% | ||||||||||
Based on: 10-K (reporting date: 2023-01-29).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 43,998,362) | 43,998,362) | ÷ | 44,879,414) | = | 0.98 | 0.98 | × | 19.58% | = | 19.19% | ||
| 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 | 19.23% | ||||||||||
Based on: 10-K (reporting date: 2022-01-30).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 41,338,271) | 41,338,271) | ÷ | 42,136,952) | = | 0.98 | 0.98 | × | 19.58% | = | 19.20% | ||
| 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 | 19.26% | ||||||||||
Based on: 10-K (reporting date: 2021-01-31).
Economic Spread Ratio
lululemon athletica inc., economic spread ratio calculation, comparison to benchmarks
| Feb 1, 2026 | Feb 2, 2025 | Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | 338,604) | 693,327) | 474,763) | 67,362) | 288,394) | (27,104) | |
| Invested capital2 | 6,957,618) | 6,507,336) | 5,978,501) | 4,526,979) | 3,909,051) | 3,672,427) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | 4.87% | 10.65% | 7.94% | 1.49% | 7.38% | -0.74% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Nike Inc. | — | -3.69% | 6.34% | 7.23% | 8.97% | 8.57% | |
Based on: 10-K (reporting date: 2026-02-01), 10-K (reporting date: 2025-02-02), 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).
1 Economic profit. See details »
2 Invested capital. See details »
3 2026 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 338,604 ÷ 6,957,618 = 4.87%
4 Click competitor name to see calculations.
The economic spread ratio demonstrates a significant fluctuation over the observed period. Initially negative in 2021, it transitioned to positive values beginning in 2022 and exhibited an overall increasing trend through 2025, before declining in 2026.
- Economic Spread Ratio - Trend Analysis
- In 2021, the economic spread ratio was -0.74%, indicating that the company’s return on invested capital was less than its cost of capital. A substantial improvement occurred in 2022, with the ratio rising to 7.38%, signifying a positive economic spread. This positive trend continued, with the ratio reaching 1.49% in 2023 and further increasing to 7.94% in 2024. The most substantial value was recorded in 2025 at 10.65%, representing the highest economic spread within the analyzed timeframe. However, a decrease is observed in 2026, with the ratio falling to 4.87%, although remaining positive.
The economic spread ratio’s movement correlates with changes in economic profit. The negative economic profit in 2021 aligns with the negative economic spread ratio. The subsequent increases in economic profit from 2022 through 2024 are mirrored by increases in the economic spread ratio. The peak in economic profit in 2025 corresponds with the highest economic spread ratio. The decline in economic profit in 2026 is accompanied by a reduction in the economic spread ratio.
- Invested Capital & Economic Spread
- Invested capital consistently increased throughout the period, from US$3,672,427 thousand in 2021 to US$6,957,618 thousand in 2026. Despite this consistent growth in invested capital, the economic spread ratio was able to improve significantly in the earlier years of the period, suggesting efficient capital allocation and strong profitability. The decline in the economic spread ratio in 2026, despite continued investment, warrants further investigation into potential factors affecting profitability or capital efficiency.
Overall, the economic spread ratio indicates a strengthening of the company’s financial performance from 2022 to 2025, followed by a moderation of that performance in 2026. The relationship between economic profit and the economic spread ratio suggests that the company’s ability to generate returns exceeding its cost of capital is a key driver of its financial health.
AI Ask an analyst for more
Economic Profit Margin
lululemon athletica inc., economic profit margin calculation, comparison to benchmarks
| Feb 1, 2026 | Feb 2, 2025 | Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | 338,604) | 693,327) | 474,763) | 67,362) | 288,394) | (27,104) | |
| Net revenue | 11,102,600) | 10,588,126) | 9,619,278) | 8,110,518) | 6,256,617) | 4,401,879) | |
| Add: Increase (decrease) in unredeemed gift card liability | 8,280) | 1,873) | 55,001) | 43,283) | 52,347) | 35,435) | |
| Adjusted net revenue | 11,110,880) | 10,589,999) | 9,674,279) | 8,153,801) | 6,308,964) | 4,437,314) | |
| Performance Ratio | |||||||
| Economic profit margin2 | 3.05% | 6.55% | 4.91% | 0.83% | 4.57% | -0.61% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Nike Inc. | — | -1.59% | 2.73% | 2.88% | 4.06% | 4.05% | |
Based on: 10-K (reporting date: 2026-02-01), 10-K (reporting date: 2025-02-02), 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).
1 Economic profit. See details »
2 2026 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net revenue
= 100 × 338,604 ÷ 11,110,880 = 3.05%
3 Click competitor name to see calculations.
The economic profit margin demonstrates a significant improvement over the observed period. Initially negative, the margin transitioned to positive values and exhibited increasing volatility before stabilizing at a level above the initial period.
- Economic Profit Margin Trend
- In 2021, the economic profit margin was negative at -0.61%. A substantial increase was recorded in 2022, reaching 4.57%. This upward trend continued, albeit at a slower pace, with the margin reaching 0.83% in 2023. A further increase to 4.91% was observed in 2024. The margin peaked at 6.55% in 2025 before decreasing to 3.05% in 2026.
The economic profit itself mirrors this trend. A negative economic profit of -27,104 thousand US dollars in 2021 was followed by positive values in subsequent years, peaking at 693,327 thousand US dollars in 2025 before declining to 338,604 thousand US dollars in 2026. This suggests a strong correlation between overall economic profit and the economic profit margin.
- Revenue and Margin Relationship
- Adjusted net revenue consistently increased throughout the period, from 4,437,314 thousand US dollars in 2021 to 11,110,880 thousand US dollars in 2026. While revenue growth was consistent, the economic profit margin did not increase linearly, indicating that revenue growth alone does not fully explain the observed changes in economic profitability. The largest margin increase occurred between 2021 and 2022, coinciding with a significant jump in revenue, but subsequent margin improvements were less pronounced despite continued revenue gains.
The decline in economic profit margin from 2025 to 2026, despite continued revenue growth, warrants further investigation. Potential factors contributing to this decrease could include increased costs, changes in the cost of capital, or shifts in operational efficiency.
AI Ask an analyst for more