lululemon athletica inc. (NASDAQ:LULU)

The analysis of the quarterly financial ratios reveals several patterns and trends in asset utilization and equity efficiency over the observed periods.

Net Fixed Asset Turnover

This ratio, which measures the effectiveness in utilizing fixed assets to generate sales, exhibits a generally declining trend from an initial reading around 5.92 to lower levels near 5.82 by the later periods. There are minor fluctuations with slight increases around certain quarters; however, the long-term movement indicates a gradual decrease in turnover efficiency possibly due to either increasing asset base or relatively slower sales growth.

Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)

When incorporating operating leases and right-of-use assets, the turnover ratio is considerably lower, beginning near 2.92 and showing a decreasing pattern down to approximately 3.17 towards the end. Despite some small variability, the trend suggests a mild reduction in asset utilization efficiency under this broader asset definition, which may reflect changes in lease accounting and asset management strategies.

Total Asset Turnover

The total asset turnover ratio starts near 1.21 and fluctuates somewhat over time with periods of decline and recovery. It experiences a noticeable dip to around 1.05 but then shows an increasing trajectory peaking near 1.53 before a slight decline afterwards. This indicates periods of improved operational efficiency in using the total asset base to generate sales, although the ratio does not maintain a consistent upward trend.

Equity Turnover

Equity turnover, reflecting how effectively shareholders' equity is used to produce revenue, ranges from about 2.04 initially to higher levels around 2.58 in the mid-periods, implying enhanced equity utilization. The ratio experiences peaks and slight declines but generally remains elevated, suggesting relatively strong revenue generation relative to equity invested during most of the periods observed.

Overall, the data suggests that while fixed asset turnover ratios indicate some diminishment in efficiency, the total asset and equity turnover ratios depict stronger and occasionally improving performance in leveraging assets and equity for revenue generation. The inclusion of operating leases moderates turnover measures, highlighting the importance of considering such assets under contemporary accounting standards when evaluating operational efficiency.

Net Revenue Trends

The net revenue demonstrates a pattern of strong growth with some fluctuations across the observed periods. Starting at approximately 782 million USD in May 2019, revenue increased notably, peaking in February 2020 at nearly 1.4 billion USD before a sharp decline in May 2020 coinciding with the early pandemic period, dropping to about 652 million USD. Subsequently, the revenue rebounded consistently, reaching a high of approximately 3.2 billion USD in January 2024. This indicates resilience and recovery in revenue generation post the initial downturn. Recent quarters show quarterly revenues in the range of 2.3 to 3.6 billion USD, suggesting sustained market demand and business expansion.

Property and Equipment, Net

The net value of property and equipment displays a steady upward trajectory throughout the series. Beginning at about 583 million USD in May 2019, the balance increased consistently each quarter, reaching approximately 1.85 billion USD by October 2024. This steady capital investment reflects ongoing growth initiatives, capacity expansion, or modernization efforts. The incremental increases quarter over quarter further suggest continuous asset acquisition or capital improvements aligning with the company's expansion strategy.

Net Fixed Asset Turnover Ratio

The net fixed asset turnover ratio, available from February 2020 onward, fluctuates moderately but tends to remain in the range of approximately 5.8 to 6.8. Initial values show a ratio near 5.9, which then rises above 6.8 around early 2021, indicating efficient use of fixed assets to generate revenue during that period. Over subsequent quarters, the ratio experiences slight declines and plateaus around 6, reflecting relatively stable asset productivity. Minor downtrend toward the latest periods suggests a potential damping in revenue generated per unit of fixed assets or an increase in fixed assets outpacing revenue growth at times. Overall, the ratio remains robust, consistent with effective asset utilization.

General Observations

The financial data suggest a company experiencing significant growth over the five-year span with a minor setback in early 2020 followed by a strong recovery. Capital assets have been steadily increased in line with revenue growth, albeit with some moderation in asset turnover efficiency. The persistent investment in property and equipment coupled with expanding revenue base highlights a growth-oriented profile with a focus on scaling operational capacity. The net fixed asset turnover indicates effective, although slightly fluctuating, asset management efficiency across the quarters.

Net Revenue

Net revenue exhibits notable volatility over the observed periods. Initially, there is a general increasing trend from May 2019 through February 2020, peaking at approximately 1.4 billion USD. This is followed by a sharp decline in May 2020 to roughly 652 million USD, likely reflecting external challenges during that period. Subsequently, the revenue recovers and generally grows, with intermittent fluctuations, reaching a significant peak of over 3.2 billion USD in January 2024. Quarterly figures after this peak generally stabilize around the 2.3 to 3.6 billion USD range, with some variability but no sustained declining pattern.

Property and Equipment, Net (Including Operating Lease, Right-of-Use Asset)

The net value of property and equipment shows a consistent upward trajectory across all periods. Starting from about 1.2 billion USD in May 2019, it rises steadily each quarter, reaching near 3.4 billion USD by May 2025. This continuing growth suggests ongoing investments in fixed assets, likely supporting capacity expansion or modernization efforts. There is no indication of asset disposals or write-downs negatively impacting the net fixed assets during this timeframe.

Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)

The net fixed asset turnover ratio begins to be reported from February 2020 onwards. It initially declines slightly from 2.92 to 2.77 and 2.72 in the early quarters of 2020, indicating reduced efficiency in using fixed assets to generate revenue during this period. However, it soon recovers, rising steadily to peak around 3.7 by May 2022, reflecting improved operational efficiency. Subsequent quarters show modest fluctuations within the 3.3 to 3.7 range, indicating relatively stable efficiency. In the most recent periods, there is a slight downward trend from 3.42 towards 3.17, which may point to a marginal decline in asset utilization effectiveness.

Overall Observations

The data indicate a company that experienced a sharp revenue impact around early 2020 but demonstrated strong recovery and growth in subsequent quarters. Investments in property and equipment have been steadily increasing, suggesting a strategic focus on asset growth to support business operations. Efficiency in leveraging fixed assets to generate revenue improved following initial declines but appears to show early signs of mild deterioration more recently. The combination of revenue growth and asset expansion points to an expansionary phase, though the slight decrease in asset turnover warrants monitoring to ensure sustainable operational efficiency.

Net Revenue

The net revenue exhibits a clear seasonal pattern with notable fluctuations across quarters. From early 2019 through early 2020, there was a strong upward trend with revenue increasing from approximately 782 million to nearly 1.4 billion US dollars. However, there was a marked decline in the May 2020 quarter, coinciding likely with external market disruptions, where revenue dropped to about 652 million. After this dip, revenue progressively recovered and surpassed prior peaks, achieving a peak of approximately 3.2 billion US dollars in the January 2024 quarter. The overall trend across these periods is positive, indicating robust growth in revenue, especially evident from late 2021 onward.

Total Assets

Total assets have steadily increased throughout the period analyzed, rising from just below 2.5 billion US dollars in early 2019 to over 7.6 billion US dollars by early 2025. This steady accumulation of assets reflects a substantial expansion of the company's resource base. Although there are small fluctuations and occasional slight declines—such as around mid-2022 and mid-2024—the general trajectory is upward. The asset growth appears consistent with the revenue growth, indicating ongoing investment and likely supporting increased operational capacity.

Total Asset Turnover

The total asset turnover ratio, available from late 2019 onward, fluctuated within a range roughly between 1.05 and 1.53. Initial values in early periods are between 1.1 and 1.2, then showing a gradual improvement with periodic peaks reaching 1.53 in multiple quarters during 2023. This ratio suggests the company’s efficiency in utilizing assets to generate revenue improved moderately over time despite the rapid asset growth. The variations indicate operational adjustments or changes in revenue generation efficiency relative to asset base expansions. However, no drastic deterioration or significant volatility is evident.

Summary of Financial Trends

The data suggest a company experiencing strong revenue growth supported by continuous asset expansion. Although external factors caused a temporary revenue decline in mid-2020, recovery was swift and sustained, leading to higher sales volumes in subsequent quarters. Asset growth has been steady, which likely underpinned increased operational capacity and supported expanding revenue streams. The improving and generally stable asset turnover ratios indicate ongoing effective utilization of assets to generate sales. Overall, the trends point to positive financial trajectory, improved operational efficiency, and growth momentum sustained through to early 2025.

Net Revenue

The net revenue shows a general upward trend over the analyzed period, despite some significant fluctuations. A notable spike is observed in early 2020, with revenue jumping to over $1.3 billion in February 2020, followed by a sharp decline in May 2020, dropping to approximately $652 million. After this dip, revenue steadily increased, reaching peaks above $3.2 billion in early 2024. Seasonal patterns may be inferred, with revenues often rising in the first quarter and peaking towards the end of the year. This suggests periodic cyclical demand or promotional activities. Overall, the trajectory indicates growth with intermittent volatility.

Stockholders’ Equity

Stockholders’ equity consistently increased throughout the period, growing from around $1.37 billion in May 2019 to over $4.2 billion by early 2025. The growth appears steady without drastic declines, indicating sustained accumulation of retained earnings or additional paid-in capital. There is no evident erosion of equity, suggesting the company maintained profitability and possibly accounted well for dividends and other equity impacts. The stable increase of equity supports a solid financial base alongside increasing net revenue.

Equity Turnover Ratio

The equity turnover ratio fluctuated within a range generally between 1.7 and 2.6. Early data points start around 2.04, dip slightly to 1.72, and then gradually increase, peaking near 2.61 in early 2024 before stabilizing around mid 2.4 to 2.5. This suggests an efficient use of equity to generate revenue, with some variability likely reflecting changing operational efficiency or capital structure adjustments. The increasing trend toward 2024 may indicate improved utilization of equity in driving sales.

Overall Analysis

The data indicates robust growth in both net revenue and stockholders’ equity over the nearly six-year span. Despite occasional short-term declines in revenue, the company exhibits a strong recovery and continued expansion. The steady increase of equity alongside rising revenue points to healthy financial management and capital resilience. The equity turnover ratio’s moderate fluctuations suggest management’s effectiveness in leveraging shareholders’ funds has been largely consistent, with slight improvements in later periods. Collectively, these trends portray a growing enterprise with sound financial stability and operational efficiency improvements over time.