lululemon athletica inc. (NASDAQ:LULU)

Inventory Turnover

The inventory turnover ratio exhibits a fluctuating trend, starting at 2.74 and generally declining to a low near 1.88 before recovering above 3.0 at one point. Subsequently, it shows a downward movement ending around 2.31. This suggests varying efficiency in inventory management, with periods of slower inventory movement followed by improvement and some recent moderation.

Receivables Turnover

Receivables turnover demonstrates variability over the periods observed. It initially fluctuates around the high 70s to near 100, though it notably dips to a low of 44.24 by the final quarter. This decline indicates a potential slowdown in the speed of collecting receivables in the most recent periods compared to earlier quarters where collection was more rapid.

Payables Turnover

The payables turnover ratio shows considerable variation, dropping from 21.7 early on to a range between approximately 9 and 15 in later quarters. The ratio has periods of both sharp declines and increases, implying changes in the timing and management of payables, with some recent quarters reflecting moderate turnover activity.

Working Capital Turnover

Working capital turnover shows a general increase from 3.62 to peaks above 6.0, followed by slight declines and recovery maintaining values mostly between 4.0 and 6.0. This highlights relatively stable efficiency in generating sales from working capital, although some fluctuations suggest changing operational dynamics throughout the periods analyzed.

Average Inventory Processing Period

The average time inventory is held reveals a rise from around 133 days to a peak near 195 days, indicating slower inventory turnover at certain points, followed by declines and a final increase again. This pattern corresponds to the inverse trend of inventory turnover and suggests that inventory management experienced periods of slower movement.

Average Receivable Collection Period

The collection period remains relatively stable, mostly between 4 and 6 days, with a slight increase to 8 days in the final quarter. This stability suggests consistent credit policies with only minor variations in receivable collection efficiency, though the recent rise may signal a slight softening in collection pace.

Operating Cycle

The operating cycle generally follows the trends of inventory processing and receivables collection periods, fluctuating between approximately 125 and 200 days. Notably, it peaks around 200 days, indicating extended operational durations, then decreases and climbs again later, consistent with inventory and receivables patterns.

Average Payables Payment Period

The payables payment period varies substantially, ranging from as low as 17 days to peaks at 40 days. The variability indicates changes in payment terms or payment behavior with suppliers, reflecting flexible management of cash outflows over time.

Cash Conversion Cycle

The cash conversion cycle experiences considerable fluctuations, initially stable around 121 days, rising to a peak of 166 days, then decreasing before another upward trajectory to 138 days at the end. This cycle variation illustrates the changing pace at which the company converts resources into cash, influenced by the underlying inventory, receivables, and payables dynamics.

The financial data exhibits notable fluctuations and trends across the analyzed periods, reflecting changes in operational efficiency and inventory management.

Cost of Goods Sold (COGS)

The cost of goods sold demonstrates an overall increasing trend with some episodic spikes. Initially, COGS rose steadily from approximately $318 million to $717 million by early 2021, reflecting growth in sales or rising production costs. Following this peak, values fluctuated but generally continued to increase, with significant surges at the start of 2023 and early 2024, reaching over $1.4 billion in some quarters. This pattern suggests expanding operational scale and possibly inflationary pressures impacting input costs.

Inventories

Inventory levels show a consistent upward trajectory over the entire period. Starting from around $626 million, inventories increased substantially to nearly $2 billion in later years. The inventory growth appears steady with occasional sharper increases, particularly around mid-2022 through 2024. This rise might indicate expansion in product offerings, stocking for anticipated demand, or slower turnover periods leading to inventory buildup.

Inventory Turnover Ratio

The inventory turnover ratio varied between approximately 1.88 and 3.04 times per period, indicating fluctuations in how efficiently the company managed stock relative to sales. The ratio was higher in early and late stages, suggesting improved efficiency during those times, while mid-periods—particularly around mid-2022—showed a decline, reflecting slower movement of inventory or overstocking. The repeated fluctuations highlight varying inventory management effectiveness, potentially influenced by seasonality, supply chain dynamics, or demand shifts.

Overall Insights

The data reflects a company experiencing growth in scale but facing challenges in maintaining consistent inventory efficiency. Rising COGS alongside increasing inventories suggests expansion but may also point to increasing input costs and complexities in inventory management. Variability in turnover ratios indicates that inventory optimization remains an area for ongoing focus to enhance operational efficiency and reduce holding costs.

Net Revenue Trend

Net revenue exhibited a generally increasing trend over the reported quarters, starting at approximately 652 million US dollars and reaching over 3.6 billion US dollars at its peak. Notable seasonal fluctuations appear evident, with revenue often rising significantly in certain quarters such as January 2021, January 2022, and February 2025. This trend suggests strong growth and potentially seasonal influences on sales performance. Despite some periods of slight decline or plateau, the overall trajectory is upward.

Accounts Receivable, Net

The accounts receivable balance showed a gradual increase over time, beginning near 49 million US dollars and rising to over 250 million US dollars by late 2025. This growth in receivables correlates with the increase in net revenue but at a somewhat slower rate initially, accelerating in the later periods. The spike in accounts receivable in the last reported quarter indicates a possible elongation in collection periods or an increase in credit sales.

Receivables Turnover Ratio

The receivables turnover ratio fluctuated considerably during the period, with values ranging from above 90 down to around 44. Higher turnover ratios earlier in the data suggest more efficient collection of receivables, whereas the decline toward the end indicates slower collections or increasing outstanding receivables relative to sales. The sharp drop to a turnover of 44 in the last period signals a significant decrease in efficiency regarding accounts receivable management.

Overall Analysis

The data reveals robust revenue growth accompanied by a steady increase in accounts receivable, with indications of decelerating turnover efficiency in the most recent quarters. This pattern may warrant further investigation into credit policies and collection processes to ensure sustainable cash flow management. While growth in net revenue is a positive indicator of expanding business operations, the rising accounts receivable and declining turnover ratio suggest potential challenges in converting sales into cash promptly.

Cost of Goods Sold (COGS)

The cost of goods sold demonstrates a general upward trend with notable seasonal fluctuations. Starting at approximately $318 million in May 2020, COGS increased substantially, peaking repeatedly above $1.3 billion by early 2024 and early 2025. The COGS shows significant quarterly volatility, with certain quarters experiencing sharp rises—especially evident in January 2021, January 2022, January 2024, and February 2025—likely related to seasonal demand or inventory cycle effects. Overall, the magnitude of increase indicates growth in sales volume or cost pressures over the analyzed periods.

Accounts Payable

Accounts payable follows a generally increasing path from roughly $79 million in May 2020 to a peak over $385 million in October 2024. The data indicate some irregular quarter-to-quarter movements, including drops and subsequent recoveries, suggesting dynamic supplier payment terms or working capital management adjustments. Peaks occur typically in late calendar years and early in the following year, reflecting potential inventory build-ups or supplier negotiations tied to inventory procurement cycles.

Payables Turnover Ratio

The payables turnover ratio exhibits notable variability and an overall moderate downward trend over the entire period. Initially high at 21.7 in May 2020, the ratio decreases to mid-to-low teens and occasionally dips below 10 during 2021 and 2022, reflecting a lengthening of the payables payment cycle. There are intermittent spikes, such as in January 2023, where the ratio jumps to around 20.95, indicating shorter payment terms or faster payment cycles temporarily. The fluctuations in turnover ratio denote management’s shifting in payables management strategies, balancing liquidity with supplier relationships and cash flow considerations.

Insights and Interpretation

The steady increase in cost of goods sold coupled with rising accounts payable suggests expanding operational scale, potentially due to increased sales or inventory investment. The variable payables turnover ratio hints at adaptive payment practices, possibly influenced by changing supplier agreements or cash flow optimization efforts. The patterns imply careful management of working capital amid growth, with seasonal peaks likely aligned to demand cycles or product replenishment schedules.

The analysis reveals that the company’s working capital exhibits a fluctuating trend with periods of both increase and decrease over the examined quarters. Initially, working capital declines from approximately 1,063 million US dollars to 726 million US dollars, before gradually rising and peaking at about 2,429 million US dollars in early 2024. After this peak, a gradual decrease is observed, followed by relatively stable fluctuations around 2,000 million US dollars towards the end of the period.

Net revenue generally demonstrates a pattern of growth with some intermittent fluctuations. There are marked increases corresponding to specific quarters, reaching the highest recorded revenue of approximately 3,611 million US dollars during early 2025. Despite some quarters showing revenue dips compared to preceding quarters, the overall trajectory suggests strong revenue expansion over time.

The working capital turnover ratio displays variability with values ranging roughly between 3.55 and 6.06. Initially, there is a peak turnover ratio above 5 around mid-2020, followed by moderate declines and rises. The turnover ratio reaches its highest point of 6.06 in mid-2022, indicating an efficient utilization of working capital to generate sales during that period. However, after that peak, a decline occurs, with the ratio dropping below 4 in early 2024 before increasing again toward the later dates to around 5.3 to 5.5.

Working Capital

The working capital trend suggests cautious management of current assets and liabilities, with increases coinciding with periods of growing revenue, potentially to support expanding operations.

Net Revenue

The revenue growth highlights successful sales expansion, with particular quarters realizing significantly higher incomes, possibly due to seasonal factors or effective market strategies.

Working Capital Turnover

Fluctuations in the turnover ratio point to varying efficiency in using working capital to generate revenue. Peaks in this ratio correspond with high sales periods relative to working capital, while dips may indicate increased capital investment or temporary operational inefficiencies.

Overall, the data indicates that while the company has grown its revenue noticeably over time, working capital levels have been adjusted accordingly to support this growth. The efficiency of working capital usage as measured by turnover varies, reflecting operational adjustments and business cycles throughout the quarters.

Inventory Turnover Ratio

The inventory turnover ratio exhibits a fluctuating trend across the observed periods. Initially, the ratio decreases from 2.74 to 2.34 between May 2020 and November 2020, indicating a slower inventory turnover. Following this, it generally improves, peaking at 3.04 by April 2024, suggesting more efficient inventory management during this time. However, the turnover ratio does not maintain a consistent upward trajectory, as there are intermittent declines observed, particularly notable drops to 1.88 and 2.1 between July 2022 and October 2022. Towards the end of the data series, the ratio declines again from 2.99 in February 2025 to 2.31 in November 2025.

Average Inventory Processing Period (Days)

The average inventory processing period inversely mirrors the inventory turnover ratio, fluctuating in a manner consistent with changes in turnover efficiency. The period starts at 133 days in May 2020, increasing to 156 days by November 2020, indicating longer durations of inventory holding initially. After this peak, there is a reduction to 120 days in early 2024, consistent with improved inventory turnover performance. Notably, there are instances where the processing period sharply increases, such as the rise to 195 days in October 2022 and another increase to 157 days in October 2024, both periods correlating with lower turnover ratios. The latest figures show variability, with the inventory processing period increasing to 158 days by November 2025.

Insights and Patterns

The data indicates cyclical variations in inventory management efficiency over the analyzed quarters. Periods of high inventory turnover correspond with shorter inventory processing periods, suggesting better inventory control and faster movement of goods. Conversely, the data reflects times of slower turnover accompanied by extended holding periods, potentially hinting at challenges such as demand fluctuations or supply chain constraints. The highest efficiency is observed around early 2024, while the lowest efficiency points are around late 2022 and late 2024. Overall, the patterns suggest ongoing variability in inventory management effectiveness rather than a steady improvement or decline.

The analysis reflects the trends in key financial efficiency metrics over multiple quarters, focusing primarily on receivables management.

Receivables Turnover Ratio

The receivables turnover ratio fluctuates considerably across the observed periods. Initially, values are relatively high, close to 79, with some dips and peaks observed. The highest recorded turnaround reaches above 98 during one quarter, suggesting a period of exceptionally efficient receivables management. However, the ratio later demonstrates variability, with notable declines and intermittent recoveries. Trends indicate periods where the turnover ratio decreases significantly—falling as low as approximately 44 in the latest quarter, which may imply challenges in collecting receivables promptly or changes in credit policies. Overall, the ratio exhibits cyclical behavior with periods of strength followed by weakened performance.

Average Receivable Collection Period

The average collection period remains comparatively stable, mostly oscillating between 4 and 5 days across the quarters. There are brief deviations reaching up to 6 days and a notable spike to 8 days in the most recent quarter. These relatively low numbers indicate a generally quick conversion of receivables into cash, aligning with the moderately high turnover ratios observed earlier. The recent increase to 8 days suggests a slight relaxation or delays in collection practices, which corresponds with the dip in receivables turnover ratio noted previously. Consistency in this metric signals effective credit controls, but the emerging upward trend towards the end signals caution.

In summary, receivables management overall demonstrates strong performance characterized by rapid collection and high turnover, yet recent quarters point to emerging challenges that could affect liquidity if trends continue. Monitoring and potential adjustments in credit policies might be warranted to sustain operational efficiency.

Average Inventory Processing Period

The average inventory processing period exhibits notable fluctuations over the observed timeframe. Initially, it increased from 133 days to a peak of 156 days within the first three quarters, followed by a reduction to 122 days by January 2021. Subsequently, the period oscillated with several rises and falls, reaching a high of 195 days in October 2022. After this peak, a downward trend was evident until early 2024, with values around 120 days, but the period began climbing again toward late 2024 and into 2025, ending near 158 days. These variations suggest periodic changes in inventory turnover efficiency and potential adjustments in inventory management strategies.

Average Receivable Collection Period

The average receivable collection period remained relatively stable throughout, predominantly fluctuating between 4 and 6 days. Early data indicated consistent values around 5 days, with minor decreases to 4 days and brief increases to 6 days. The period sustained this narrow range, showing no substantial upward or downward trend, aside from a slight increase to 8 days in November 2025. Overall, this consistency reflects a steady management of receivables with limited variability in collection efficiency.

Operating Cycle

The operating cycle, which combines the inventory processing and receivable collection periods, closely mirrors the fluctuations observed in inventory processing due to the relatively stable collection period. Initially, the cycle lengthened from 138 days to 161 days during the first quarters, then shortened to around 127 days by early 2021. It extended again, peaking at 200 days in October 2022. A subsequent decline brought the operating cycle down to approximately 125 days in early 2024, before it rose once more to 166 days by November 2025. These changes indicate periods of both increased and decreased operational efficiency linked primarily to inventory handling rather than receivables management.

Summary of Trends and Insights

The data reveal that the company's inventory turnover experienced significant volatility, affecting the overall operating cycle more than receivable collection periods. The average receivable collection period remained stable, suggesting persistent credit and collection policies. The periods of extended inventory processing and operating cycles may indicate challenges such as slower sales, supply chain issues, or buildup of stock, whereas the intervals of reduced days suggest phases of improved inventory management and increased operational efficiency. Monitoring these metrics continuously is crucial for optimizing working capital and maintaining healthy cash flow.

Payables Turnover Ratio

The payables turnover ratio shows considerable fluctuation over the examined periods. Initially, the ratio declined sharply from 21.7 to around 11.24 between May 3, 2020, and November 1, 2020, suggesting a slower rate of payments to suppliers. Following this decline, the ratio continued to oscillate, reaching a low near 9.14 by January 30, 2022. A notable peak occurred on January 29, 2023, where the ratio returned to 20.95, indicating accelerated payments during that period. Beyond this point, the ratio displayed volatility with values generally between 10.85 and 15.91, suggesting varying payment speeds but generally more consistent than the earlier periods.

Average Payables Payment Period (Days)

The average payables payment period inversely mirrors the trends observable in the payables turnover ratio. The number of days increased significantly from 17 days on May 3, 2020, to approximately 32-34 days during late 2020 to early 2021, indicating longer duration to settle payables. A peak in payment days occurred around January 30, 2022, with approximately 40 days, implying a slow payment pace. Subsequently, a notable reduction occurred around January 29, 2023, where payment days decreased sharply back to 17 days, corresponding to the spike in the payables turnover ratio. After this, the payment period fluctuated between roughly 23 to 34 days, reflecting moderate variability in payment timing but generally shorter than the earlier peak period.

Overall Trends and Insights

The data reflects an initial trend of stretching payables, indicated by decreasing turnover ratios and increasing payment periods throughout 2020 and into early 2022. This may suggest liquidity management strategies or supplier negotiation changes during this timeframe. The substantial reversal in early 2023, marked by a spike in turnover ratio and contraction of payment days, indicates a return to faster payment practices. The ensuing periods exhibit moderate oscillations but without extreme deviations, possibly indicating stabilization in payables management. The relationship between these two metrics consistently illustrates payment behavior changes, with faster payables turnover corresponding to shorter payment periods and vice versa.

Inventory Processing Period

The average inventory processing period shows notable fluctuations over the analyzed quarters, varying from a low of 120 days to a high of 195 days. The period increased steadily from mid-2020 through late 2022, peaking at 195 days, suggesting slower inventory turnover during that time. However, beginning in early 2023, the processing period exhibited a decreasing trend before again rising considerably towards late 2024. These variations indicate changing operational efficiencies or inventory management adjustments, with periods of extended inventory holding impacting working capital.

Receivable Collection Period

The average receivable collection period remained relatively stable throughout the quarters, generally fluctuating narrowly between 4 and 6 days. This stability implies consistent credit and collection policies, contributing to predictable cash inflows from customers. A slight increase to 8 days was noted in the final quarter of the dataset, which might signal emerging delays in collections or relaxed credit terms.

Payables Payment Period

The average payables payment period has demonstrated variability, ranging from 17 days to 40 days. Initially, payables periods lengthened considerably during 2020 and early 2021, peaking at 40 days in early 2022, which could reflect extended supplier payment terms or strategic liquidity management. Thereafter, the period decreased to a low of 17 days by early 2023, followed by moderate fluctuations. The oscillation suggests an active modulation of payment timing possibly aimed at optimizing cash flow or responding to supplier negotiations.

Cash Conversion Cycle

The cash conversion cycle (CCC) shows significant volatility over the reported timeline, moving between 93 and 166 days. The CCC decreased notably in the early part of 2021, indicating improved operational cash flow efficiency, but subsequently increased, peaking around late 2022. Following this peak, the cycle shortened again during 2023 before rising towards the latter periods. These shifts largely correspond with inventory processing and payables periods, illustrating the combined effect of asset and liability management on cash flow. A longer CCC signifies more capital tied up in operations, whereas shorter cycles indicate quicker cash turnover.