lululemon athletica inc. (NASDAQ:LULU)

Return on Assets (ROA)

The Return on Assets exhibits a fluctuating trend over the reported periods. Initially, ROA declined from 18.04% to a low of 14.07%, then recovered progressively, peaking at 22.39% in July 2022. A notable dip occurred afterward, dropping to 15.25% in January 2023. Subsequently, the ROA steadily improved, reaching levels above 24% by late 2024 before slightly decreasing but remaining above 23% into mid-2025. This pattern indicates cyclical performance with periods of both contraction and expansion in asset efficiency.

Financial Leverage

Financial Leverage remained relatively stable throughout the periods, fluctuating narrowly between approximately 1.6 and 1.8. There is no significant upward or downward trend; instead, the leverage ratio oscillates mildly, reflecting consistent capital structure with modest changes in debt relative to equity. Slight increases are observed around early 2023 and late 2024, but the overall leverage remains moderate.

Return on Equity (ROE)

Return on Equity demonstrates a strong upward trend over the timeline with initial values near 31.46%, followed by a decline to a low of 23.02%. After this, the ROE shows a marked recovery and growth, achieving levels exceeding 38% between mid-2021 and mid-2022. A temporary decline to around 27% occurs in early 2023, followed by renewed growth that peaks at 43.55% in late 2024. The ratio then slightly contracts but sustains elevated levels above 40% into 2025. The progression suggests improving profitability relative to shareholder equity, indicative of efficient management and potentially favorable market conditions.

The analysis of the recent quarterly financial ratios for lululemon athletica inc. reveals several notable trends in profitability, efficiency, and leverage over the periods observed.

Net Profit Margin

The net profit margin exhibits a generally positive trajectory with some fluctuations. Initially around 15%, it declined modestly towards early 2021, hitting a notable low near 10.5% in early 2023. Subsequently, this margin showed a strong recovery, surpassing earlier levels and reaching approximately 17% by early 2025 before a slight decrease towards mid-2025. This pattern suggests periods of margin compression possibly due to cost pressures or strategic investments, followed by effective margin restoration.

Asset Turnover

Asset turnover ratios indicate the company's efficiency in utilizing its assets to generate revenue. The ratio started around 1.2 and saw a dip to slightly above 1.0 during early 2021. Thereafter, an upward trend is evident, peaking near 1.53 in mid to late 2023. This improvement highlights enhanced operational efficiency. After this peak, the ratio stabilized around 1.4 to 1.5, indicating consistent asset utilization efficiency in more recent quarters.

Financial Leverage

Financial leverage ratios remained relatively stable throughout the periods analyzed, centered roughly between 1.6 and 1.8. Minor fluctuations are observed, with the highest leverage near 1.8 occurring in early 2022 and early 2025. The steady leverage suggests a consistent capital structure strategy without significant increases in debt financing or equity changes impacting leverage substantially.

Return on Equity (ROE)

ROE reflects combined effects from profitability, asset use, and financial leverage. It initially showed a gradual decline from approximately 31.5% in mid-2020 to a low of about 23% in early 2021. Following this, ROE improved significantly, reaching above 40% by late 2024, with slight variations thereafter. The pattern indicates that post-2021, the company efficiently leveraged its equity base to generate higher returns, supported by increasing profit margins and asset turnover during the same periods.

Overall, the data reflects a company that experienced some early COVID-19 pandemic related challenges with declines in margins and returns in 2021, followed by strong operational recovery and efficiency improvements leading to enhanced profitability and returns on equity. Leverage remained steady, supporting a stable financial footing throughout these fluctuations.

Net Profit Margin

The net profit margin exhibits some fluctuations over the analyzed periods but generally maintains a range between approximately 10.5% and 17%. Initially, the margin shows a slight decline from about 15.01% to a lower point near 13.38%, followed by a gradual rebound reaching a peak above 16% by early 2024. After a dip around early 2023 to near 10.54%, the margin recovers strongly and stabilizes in the mid to high teens by the end of the period. This suggests periods of margin compression possibly due to increased costs or pricing pressures, followed by effective margin improvement strategies.

Asset Turnover

The asset turnover ratio indicates a generally positive trend across the periods, increasing from just above 1.1 to around 1.45. Early data shows some variability, but from around mid-2022 onward, the ratio remains elevated and relatively consistent. This upward trend implies improved efficiency in generating sales from assets, reflecting potentially better utilization of resources and operational enhancements over time.

Return on Assets (ROA)

The return on assets closely aligns with the movements in net profit margin and asset turnover, displaying a rising trend overall. Starting at approximately 18%, ROA experiences some decreases in the early periods but climbs steadily afterward, reaching levels exceeding 24% in the most recent quarters. This improvement highlights enhanced profitability and asset utilization, indicating successful management in driving returns on the company’s asset base.