lululemon athletica inc. (NASDAQ:LULU)

The solvency position, as indicated by the provided metrics, demonstrates a generally stable, though subtly shifting, profile over the observed period. An increasing trend is apparent in several debt ratios, while coverage ratios exhibit more fluctuation. Overall, the company appears to be managing its debt effectively, but certain areas warrant continued monitoring.

Debt to Equity

The Debt to Equity ratio, inclusive of operating lease liabilities, shows a gradual increase from 0.31 in 2021 to 0.36 in 2025, holding steady at 0.36 in 2026. This suggests a moderate reliance on equity financing, with a slowly growing proportion of debt relative to shareholder investment.

Debt to Capital

Similar to the Debt to Equity ratio, the Debt to Capital ratio (including operating lease liability) also exhibits a consistent upward trend, rising from 0.24 in 2021 to 0.27 in both 2025 and 2026. This indicates a gradual increase in the proportion of debt financing within the company’s capital structure.

Debt to Assets

The Debt to Assets ratio, incorporating operating lease liabilities, demonstrates a slight increase from 0.19 in 2021 to 0.21 in 2025 and 2026. This implies a growing claim of creditors against the company’s assets, though the change remains relatively small.

Financial Leverage

Financial leverage initially increased from 1.64 in 2021 to 1.80 in 2022, then decreased to 1.68 in 2024. It rose again to 1.76 in 2025 before decreasing slightly to 1.70 in 2026. This suggests fluctuating use of debt to amplify returns, with a recent trend towards stabilization.

Coverage Ratios

Fixed Charge Coverage experienced an increase from 5.23 in 2021 to a peak of 8.69 in 2024, before decreasing to 8.60 in 2025 and 6.51 in 2026. This indicates a strong ability to meet fixed financing obligations, although the recent decline suggests a potential weakening in this capacity. The fluctuations warrant further investigation to determine the underlying causes.

In summary, the company’s solvency ratios suggest a moderate and gradually increasing reliance on debt financing. While coverage ratios generally remain healthy, the recent decrease in Fixed Charge Coverage merits attention. The overall trend indicates a stable, but evolving, financial structure.

An examination of the provided financial information reveals a consistent increase in stockholders’ equity from January 31, 2021, through February 1, 2026. However, values for total debt and the resulting debt to equity ratio are incomplete, limiting a comprehensive solvency assessment. The available information indicates a potential shift in the company’s financial leverage over the observed period, though definitive conclusions are restricted by the missing debt figures.

Stockholders’ Equity

Stockholders’ equity demonstrated a steady upward trajectory, increasing from US$2,558,566 thousand as of January 31, 2021, to US$4,961,840 thousand by February 1, 2026. This represents a substantial growth in the company’s net worth over the five-year period. The increase suggests retained earnings and/or successful equity fundraising activities.

Debt to Equity Ratio

The debt to equity ratio is not populated for any of the reported periods. Without corresponding total debt values, it is impossible to determine the extent to which the company relies on debt financing relative to equity. The absence of this information prevents an assessment of the company’s financial risk and its ability to meet its long-term obligations. A complete analysis requires the inclusion of total debt figures for each period.

In summary, while the growth in stockholders’ equity is a positive indicator, the lack of total debt information prevents a meaningful evaluation of the company’s solvency position. The debt to equity ratio, a key metric for assessing financial leverage, cannot be analyzed without the necessary debt values.

The debt to equity ratio, inclusive of operating lease liabilities, exhibits a generally increasing trend over the observed period. While fluctuations occur, the company’s leverage, as measured by this ratio, has risen from 0.31 in January 2021 to 0.36 in February 2025, remaining stable at 0.36 in February 2026.

Total Debt Trend

Total debt, including operating lease liability, demonstrates consistent growth throughout the period. Beginning at US$798,681 thousand in January 2021, it increases to US$1,798,441 thousand by February 2026. The rate of increase appears to accelerate between January 2023 and January 2024.

Stockholders’ Equity Trend

Stockholders’ equity also shows an upward trajectory, increasing from US$2,558,566 thousand in January 2021 to US$4,961,840 thousand in February 2026. The growth in equity is substantial, particularly between January 2023 and February 2026, outpacing the growth in total debt for those periods.

Debt to Equity Ratio – Detailed Analysis

The debt to equity ratio remained relatively stable between 0.31 and 0.34 from January 2021 to January 2023. A slight decrease to 0.33 was observed in January 2024 before increasing to 0.36 in February 2025 and holding steady through February 2026. This indicates a moderate increase in the proportion of debt financing relative to equity financing, although the equity base is expanding concurrently.

The consistent growth in both debt and equity suggests the company is actively reinvesting and expanding operations. The stabilization of the debt to equity ratio in the most recent periods indicates a potential balancing of debt and equity financing strategies, despite continued absolute increases in debt levels.

An examination of the provided financial information reveals a consistent increase in total capital from January 31, 2021, through February 1, 2026. However, the corresponding values for total debt are unavailable, preventing a complete assessment of the debt to capital ratio over the entire period. The debt to capital ratio itself is not populated for any of the reported dates.

Total Capital

Total capital demonstrates a clear upward trajectory. It increased from US$2,558,566 thousand in January 2021 to US$2,740,046 thousand in January 2022, representing a growth of approximately 7.1%. This growth continued to US$3,148,799 thousand in January 2023 (approximately 15% increase from January 2022), then significantly accelerated to US$4,232,081 thousand in January 2024 (approximately 34.5% increase from January 2023). The rate of increase moderated slightly to US$4,324,047 thousand in February 2025 (approximately 2.2% increase from January 2024), and further increased to US$4,961,840 thousand in February 2026 (approximately 14.7% increase from February 2025).

Without the corresponding total debt figures, it is impossible to determine the company’s leverage or its ability to meet its long-term obligations. The absence of the debt to capital ratio calculation for all periods further limits the ability to assess the company’s financial risk profile based on this specific metric. A complete analysis requires the inclusion of total debt values for each reporting period.

Debt to Capital Ratio

The debt to capital ratio is not available for any of the reported periods. This prevents any assessment of the proportion of the company’s capital structure financed by debt. The lack of this information hinders the evaluation of financial risk and the company’s reliance on borrowed funds.

The observed trend in total capital suggests potential growth and investment activities. However, the impact of debt financing on this growth remains unknown without the corresponding debt figures and calculated ratio.

The debt to capital ratio, inclusive of operating lease liabilities, exhibits a consistent upward trend over the analyzed period. While remaining relatively stable in the initial years, the ratio demonstrates a gradual increase, suggesting a growing reliance on debt financing relative to the company’s capital structure.

Total Debt (including operating lease liability)

Total debt has increased steadily from US$798.681 million in January 2021 to US$1.798 billion in February 2026. The rate of increase appears to have accelerated in recent years, with larger absolute increases observed between 2023 and 2026 compared to earlier periods.

Total Capital (including operating lease liability)

Total capital has also increased over the period, moving from US$3.357 billion in January 2021 to US$6.760 billion in February 2026. However, the growth in capital has not consistently outpaced the growth in debt, contributing to the observed increase in the debt to capital ratio.

Debt to Capital Ratio

The debt to capital ratio remained at 0.24 for both January 2021 and January 2022. It then increased to 0.25 in January 2023 and remained at that level through January 2024. The ratio further increased to 0.27 in both February 2025 and February 2026. This consistent, albeit moderate, increase indicates that the proportion of debt financing within the company’s capital structure is growing. A ratio of 0.27 suggests that for every dollar of capital, 27 cents are financed by debt.

The observed trend suggests a potential shift in the company’s financing strategy, or a need for increased capital investment that is being funded through debt. Continued monitoring of this ratio is recommended to assess the long-term implications for the company’s financial flexibility and risk profile.

An examination of the provided financial information reveals a consistent increase in total assets from January 31, 2021, through February 1, 2026. However, information regarding total debt is absent for all periods, precluding a direct calculation and analysis of the debt-to-assets ratio. Consequently, a comprehensive assessment of the company’s solvency based on this specific metric is not possible.

Total Assets Trend

Total assets demonstrate a clear upward trajectory over the observed period. Beginning at US$4,185,215 thousand in 2021, assets grew to US$4,942,478 thousand in 2022, then to US$5,607,038 thousand in 2023. This growth continued, reaching US$7,091,941 thousand in 2024, US$7,603,292 thousand in 2025, and culminating in US$8,456,743 thousand in 2026. The rate of increase appears relatively consistent year-over-year.

Without corresponding debt figures, it is impossible to determine the extent to which asset growth is financed by debt or equity. The absence of debt information limits the ability to assess financial leverage and the potential risks associated with the company’s capital structure. A complete solvency analysis requires the inclusion of total debt values for each period.

Debt to Assets Ratio – Calculation Limitation

The debt-to-assets ratio, a key indicator of solvency, cannot be calculated due to the lack of total debt figures. This ratio measures the proportion of a company’s assets financed by debt. A higher ratio generally indicates greater financial risk, while a lower ratio suggests a more conservative financial position. The inability to compute this ratio hinders a thorough evaluation of the company’s long-term financial stability.

Further investigation is needed to obtain the total debt figures for each period to enable a meaningful analysis of the debt-to-assets ratio and a comprehensive assessment of the company’s solvency position.

The relationship between total debt, including operating lease liability, and total assets has exhibited a generally increasing trend over the observed period. While fluctuating slightly, the debt-to-assets ratio demonstrates a consistent move towards greater leverage.

Total Debt (including operating lease liability)

Total debt has increased steadily from US$798.681 million in January 2021 to US$1.798 billion in February 2026. The rate of increase appears to have accelerated in recent years, with a significant jump between January 2023 and January 2024.

Total Assets

Total assets have also increased consistently throughout the period, rising from US$4.185 billion in January 2021 to US$8.457 billion in February 2026. This growth in assets has generally outpaced the growth in debt, but the difference has narrowed over time.

Debt to Assets Ratio

The debt-to-assets ratio began at 0.19 in January 2021, decreased slightly to 0.18 in January 2022, and then remained relatively stable at 0.19 in January 2023. The ratio then increased to 0.20 in January 2024 and continued to rise to 0.21 in both February 2025 and February 2026. This indicates a growing reliance on debt financing relative to the company’s asset base.

The observed trend suggests a potential shift in the company’s capital structure, with an increasing proportion of assets financed by debt. While the ratio remains within a reasonable range, continued increases could warrant further investigation into the company’s debt management strategies and ability to service its obligations.

The financial leverage ratio exhibits a generally stable pattern over the observed period, with fluctuations indicating shifts in the company’s capital structure. Total assets have consistently increased year over year, while stockholders’ equity has also shown growth, though at varying rates. The interplay between these two factors influences the observed leverage.

Financial Leverage Trend

The financial leverage ratio began at 1.64 in 2021 and increased to 1.80 in 2022. A slight decrease to 1.78 was noted in 2023, followed by a further decrease to 1.68 in 2024. The ratio then increased slightly to 1.76 in 2025 before decreasing again to 1.70 in 2026. This suggests a moderate level of financial risk that has remained relatively contained throughout the period.

The initial increase in financial leverage from 2021 to 2022 suggests the company may have increased its reliance on debt financing relative to equity. However, the subsequent declines in 2023 and 2024 indicate a potential shift towards a more balanced capital structure, possibly through increased equity or debt reduction. The slight increase in 2025 and subsequent decrease in 2026 suggest continued management of the capital structure.

Asset and Equity Growth

Total assets increased consistently throughout the period, growing from US$4,185,215 thousand in 2021 to US$8,456,743 thousand in 2026. Stockholders’ equity also increased, but at a slower pace than assets, moving from US$2,558,566 thousand to US$4,961,840 thousand over the same timeframe. This differential growth rate contributes to the fluctuations observed in the financial leverage ratio.

The observed trends suggest the company maintains a moderate degree of financial leverage. While asset growth consistently outpaces equity growth, the leverage ratio remains within a relatively narrow range, indicating a controlled approach to financing and capital structure management.

The information presents earnings before interest and tax (EBIT) alongside missing values for interest expense and the resulting interest coverage ratio over a six-year period. A clear upward trend in EBIT is observable, while the absence of interest expense figures prevents a complete solvency assessment.

Earnings Before Interest and Tax (EBIT)

EBIT demonstrates consistent growth throughout the observed period. Starting at US$819,350 thousand in January 2021, it increased to US$1,333,869 thousand in January 2022, and remained relatively stable at US$1,332,571 thousand in January 2023. A significant increase is then noted in January 2024, reaching US$2,175,735 thousand. This growth continues into February 2025, with EBIT reaching US$2,576,077 thousand, before decreasing slightly to US$2,238,967 thousand in February 2026. Overall, EBIT exhibits a strong positive trajectory.

Interest Expense

Interest expense figures are not included for any of the reported periods. Without this information, it is impossible to determine the company’s obligations related to debt financing.

Interest Coverage Ratio

The interest coverage ratio is not populated for any of the reported periods. This ratio, calculated as EBIT divided by interest expense, is a key indicator of a company’s ability to meet its interest obligations. The absence of this ratio, due to missing interest expense figures, limits the ability to assess the company’s solvency.

In conclusion, while the reported EBIT figures indicate strong financial performance, a comprehensive solvency analysis is not possible without the corresponding interest expense figures and the calculated interest coverage ratio.

The fixed charge coverage ratio demonstrates a generally positive trend over the observed period, with some fluctuation. Earnings before fixed charges and tax consistently increased from 2021 to 2024, before experiencing a slight decrease in the most recent two years. Simultaneously, fixed charges also increased throughout the period, though at a slower rate than earnings.

Overall Trend

The fixed charge coverage ratio increased from 5.23 in 2021 to 8.69 in 2024, indicating a strengthening ability to meet fixed financing obligations. However, the ratio decreased to 8.60 in 2025 and further to 6.51 in 2026, suggesting a potential weakening in this capacity despite still remaining at a relatively strong level.

Earnings Before Fixed Charges and Tax

Earnings before fixed charges and tax exhibited substantial growth between 2021 and 2024, rising from US$1,012,848 thousand to US$2,458,623 thousand. This growth rate slowed in 2025, with earnings reaching US$2,914,833 thousand, and then decreased to US$2,644,954 thousand in 2026. This suggests a potential plateauing or cyclical downturn in profitability.

Fixed Charges

Fixed charges increased steadily throughout the period, from US$193,498 thousand in 2021 to US$405,987 thousand in 2026. While this indicates increasing financial obligations, the growth in fixed charges was consistently lower than the growth in earnings before fixed charges and tax until 2025, contributing to the initial improvement in the coverage ratio.

Ratio Fluctuations

The peak in fixed charge coverage occurred in 2024 at 8.69. The subsequent declines in 2025 and 2026, despite continued high earnings, are attributable to the accelerating growth of fixed charges. This suggests that increased debt servicing or other fixed obligations are beginning to exert a greater influence on the company’s financial flexibility.

In conclusion, while the fixed charge coverage ratio remains healthy, the recent trend indicates a potential shift. Continued monitoring of both earnings and fixed charge levels will be crucial to assess the long-term sustainability of the company’s ability to meet its fixed financial obligations.