lululemon athletica inc. (NASDAQ:LULU)

The financial data reveals several notable trends across the analyzed periods. Net operating profit after taxes (NOPAT) experienced fluctuations but shows an overall upward trajectory, especially from the year ending January 30, 2022, moving from $1,040,291 thousand to a projected $1,928,398 thousand by February 2, 2025. Despite a decline in NOPAT between February 2, 2020, and January 31, 2021, the subsequent years indicate substantial recovery and growth.

The cost of capital has remained relatively stable over the years, fluctuating slightly around the 16.3% to 16.52% range. This stability suggests consistent expectations regarding the required return on invested capital.

Invested capital has steadily increased over the periods, rising from $3,008,240 thousand in early 2020 to a forecasted $6,507,336 thousand by February 2025. This represents significant capital deployment expansion, likely to support growth initiatives and operations.

Economic profit, which measures the value generated beyond the cost of capital, shows a volatile but strong overall improvement. Initially, it dropped from $218,387 thousand in 2020 to $73,308 thousand in 2021 but then recovered sharply, reaching a projected $868,008 thousand by 2025. The pattern of economic profit largely mirrors the changes in NOPAT but also highlights the impact of invested capital and cost of capital on value creation.

Key Observations

• NOPAT increased significantly after 2021, indicating improved profitability and operational efficiency.

• The relatively stable cost of capital reflects consistent market and risk conditions.

• The steady rise in invested capital suggests ongoing investment and expansion.

• Economic profit trends indicate growing value creation, despite early volatility in the period.

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.

The financial data reveals notable trends in economic profit, invested capital, and economic spread ratio over the periods analyzed.

Economic Profit

The economic profit exhibited significant fluctuations. Beginning at a moderate level, it decreased sharply in the subsequent period before rising substantially in the following years. The value peaked in the most recent period, more than quadrupling from its low point, indicating a strong improvement in value creation.

Invested Capital

Invested capital showed a consistent upward trend throughout the periods. Starting from a base amount, it increased steadily year over year, reflecting continuous investment or growth in assets employed in the business. The increase is substantial, nearly doubling by the final period.

Economic Spread Ratio

The economic spread ratio demonstrated considerable variability but trended positively overall. After a decrease early on, it rose sharply, experienced a moderate decline afterward, and then increased significantly in the last two periods. The highest ratio recorded in the final period suggests enhanced efficiency in generating returns above the cost of invested capital.

Overall, the data indicate that while invested capital has been steadily growing, the company’s ability to generate economic profit and maintain a favorable economic spread ratio has generally improved, particularly in the most recent years. This suggests enhanced profitability and efficient capital utilization over time.

Economic Profit

The economic profit exhibits variability over the examined periods, starting at 218,387 thousand US dollars in early 2020. It declined significantly to 73,308 thousand US dollars by early 2021, followed by a substantial increase to 395,202 thousand US dollars in early 2022. There was a decrease again to 190,300 thousand US dollars in early 2023, after which a marked upward trend is observed, reaching 637,600 thousand US dollars in early 2024 and further climbing to 868,008 thousand US dollars by early 2025. The latter figures indicate a strong recovery and growth in economic profit after the dip around 2021 and 2023.

Adjusted Net Revenue

Adjusted net revenue displays a consistent upward trajectory throughout the span. It increases from 4,000,297 thousand US dollars in early 2020 to 4,437,314 thousand US dollars in early 2021, followed by a significant jump to 6,308,964 thousand US dollars in 2022. The growth continues steadily, reaching 8,153,801 thousand US dollars in 2023, then 9,674,279 thousand US dollars in 2024, and finally 10,589,999 thousand US dollars by 2025. This trend reflects continuous expansion in revenue generation over the years without any observed contraction.

Economic Profit Margin

The economic profit margin shows fluctuations over the analyzed periods. It starts at 5.46% in 2020 but drops sharply to 1.65% in 2021. It rebounds to 6.26% in 2022, then decreases again to 2.33% in 2023. Subsequently, there is a strong increase to 6.59% in 2024 and further improvement to 8.2% in 2025. These variations suggest periods of operational efficiency changes or cost structure adjustments, with the latter years indicating enhanced profitability relative to revenue.

Summary of Trends

Overall, the data reveals a pattern of initial contraction in economic profit and profit margin around 2021, followed by recovery and substantial growth in both metrics toward 2025. Meanwhile, adjusted net revenue demonstrates consistent growth throughout the entire period, signifying increasing sales or service earnings. The divergence and subsequent convergence between economic profit and profit margin metrics suggest that improvements in managing costs or capital efficiency may have contributed to strengthened profitability in later years.