lululemon athletica inc. (NASDAQ:LULU)

Inventory Turnover

The inventory turnover ratio shows a fluctuating pattern from 3.39 in early 2020 down to a low of 1.88 in late 2022 before recovering to around 2.59 by mid-2025. This indicates variability in how efficiently inventory is managed, with periods of slower turnover notably around late 2021 to late 2023, followed by some improvement thereafter.

Receivables Turnover

Receivables turnover generally declines over the observed period from a high near 99 in early 2020 to lower values fluctuating mostly in the 70s and 80s range thereafter. This suggests a lengthening in the collection of receivables or decreased efficiency in collecting payments from customers during most of the later periods.

Payables Turnover

The payables turnover ratio demonstrates significant variation, dropping from approximately 22 early in 2020 to a low around 9 to 11 during 2021 and 2022, before a partial recovery to values between 11 and 16 in subsequent years. This indicates that the company has generally slowed its rate of paying suppliers during the middle periods but has somewhat sped up payment frequency later on.

Working Capital Turnover

Working capital turnover shows an overall increasing trend from around 3.35 in early 2020 to peaks over 6 in late 2021 and early 2022, before settling around 5.35 by 2025. This progression implies improved utilization of working capital to generate revenue, enhancing operational efficiency until stabilizing in the medium term.

Average Inventory Processing Period

The average inventory processing period mostly increases over time, moving from approximately 108 days in early 2020 to a high near 195 days in early 2022, and fluctuating afterwards between 120 and 160 days. This increase suggests inventory is remaining longer on hand during the intermediate periods, potentially indicating slower sales or overstocking, with some improvement in reducing inventory days in recent quarters.

Average Receivable Collection Period

The receivable collection period remains quite stable, fluctuating narrowly between 4 and 6 days throughout the timeline. This stability suggests consistent credit terms and steady collection practices without significant delays or accelerations in receivables management.

Operating Cycle

The operating cycle lengthens from about 112 days early in 2020 to a peak near 200 days in early 2022, then reduces to a range near 125 to 160 days in the later periods. This pattern aligns with the inventory and receivables trends, indicating longer time spans to convert inventory and receivables into cash during the peak period, followed by some efficiency improvements.

Average Payables Payment Period

The payables payment period increases significantly from around 17 days early 2020 to the mid-30s during 2021 and 2022, indicating the company took longer to pay its suppliers during these periods. Subsequently, this period decreases again to near 23 to 31 days, reflecting a shift toward quicker payments in the more recent quarters.

Cash Conversion Cycle

The cash conversion cycle displays a rising trend from approximately 95 days in early 2020 to a peak of 166 days in early 2022, with a gradual decline to values near 115 days by mid-2025. This suggests the company's cash is tied up for a longer period during the middle part of the timeline before some efficiency gains allowed the cycle to shorten, improving overall cash flow management.

Cost of Goods Sold

Over the observed periods, the cost of goods sold (COGS) displays notable fluctuations with an overall increasing trend. Initial values in 2019 ranged around 360,000 to 411,000 US$ thousands, then surged significantly in early 2020, reaching as high as approximately 716,815 US$ thousands by January 2021. Following this peak, COGS experienced continual ups and downs but generally maintained higher levels, frequently exceeding 900,000 and peaking near 1,429,545 US$ thousands in February 2025. The data reflects considerable volatility likely driven by broader market or operational factors, indicating an expansion in production or sales volume over time, but with periods of intensified cost.

Inventories

Inventories exhibit a steady and marked increase through the examined quarters. Starting from about 443,006 US$ thousands in May 2019, inventory levels rose consistently, reaching above 1,742,716 US$ thousands by October 2022. Despite some decline post this peak, inventories remained elevated, fluctuating between 1,300,000 and 1,800,000 US$ thousands in subsequent periods. This upward trajectory suggests growing stockpiles, potentially in anticipation of higher demand or reflecting slower turnover, which may have implications for working capital management.

Inventory Turnover Ratio

The inventory turnover ratio, available for a subset of periods, indicates a downward trend from early 2020 through late 2022, with ratios declining from around 3.39 to a low of approximately 1.88. This decline implies slower inventory movement relative to sales or COGS during this interval. Subsequently, the turnover ratio shows some recovery, rising to above 3.00 by mid-2024, though fluctuating thereafter. This pattern may reflect initial inventory buildup or sales slowdowns followed by improved efficiency or stronger sales performance, impacting asset utilization and inventory management effectiveness.

Overall Insights

The combined analysis of COGS, inventories, and inventory turnover reveals increasing operational scale with rising costs and stock levels. However, the declining and recovering inventory turnover ratios suggest variability in inventory management efficiency and sales dynamics. Periods of rising inventories coupled with lower turnover may signal build-up risks, while subsequent turnover improvements are positive indicators of inventory handling. Continuous monitoring of these metrics is advisable to balance growth ambitions with operational efficiency.

Net Revenue

The net revenue exhibits a generally increasing trend over the examined quarters, with notable fluctuations aligned with seasonal patterns. Initial values in 2019 show moderate growth, followed by a significant surge in early 2020 reaching approximately 1.4 billion US dollars. However, a sharp decline occurs in the quarter ending May 3, 2020, likely indicative of external economic disruptions. Subsequent quarters demonstrate recovery and an upward trajectory, peaking around 3.2 billion US dollars by early 2024. The data reveals strong quarterly increases, especially from 2021 onward, although some quarters demonstrate flattening or slight decreases. Overall, the trend points to sustained revenue growth with some cyclicality and occasional volatility.

Accounts Receivable, Net

The accounts receivable figures show a steady increase over the reported periods. Starting from approximately 20 million US dollars in early 2019, the balances grow consistently to over 140 million US dollars by the third quarter of 2025. The increase generally correlates with the rise in net revenue, which suggests expanding sales on credit or longer collection periods. Periodic increments are evident, especially in late 2022 and early 2023, indicating possible changes in credit policy or customer payment behavior. While growth is consistent, the rate appears to stabilize in later periods, implying controlled receivables management despite the company's expanding operations.

Receivables Turnover Ratio

The turnover ratio data are partially sparse but show meaningful trends where available. Beginning with an exceptionally high ratio close to 99 in early 2020, there is a downward trend through mid-2023, with values decreasing to approximately 61.02, indicating a lengthening of the time required to collect receivables. After this trough, ratios begin to recover, climbing back to the mid-to-high 70s and 80s by the latest periods, though not reaching initial peak levels. This trend suggests that the company experienced challenges in receivables collection efficiency during the pandemic period but has since improved its credit management practices to enhance cash flow cycles.

Cost of Goods Sold (COGS)

The cost of goods sold shows notable variability across the observed quarters. From May 2019 through early 2020, COGS increased from approximately $361 million to a peak of around $717 million by January 2021. There is a clear upward trend in COGS over this period, suggesting increased production or higher cost inputs. The values fluctuate afterward, with some quarters showing reductions followed again by increases. The highest values appear in the early months of 2024 and 2025, with COGS surpassing $1.4 billion in several recent quarters. This trend may indicate either growth in sales volumes or rising costs per unit, or a combination thereof.

Accounts Payable

Accounts payable figures generally increase over time, starting from about $88 million in May 2019 and rising to figures exceeding $300 million in numerous recent quarters. There are some temporary declines visible, such as in early 2023 and again in early 2025, possibly reflecting payment schedules or operational cash flow management strategies. The overall upward trajectory aligns with the growth in COGS and may reflect higher supplier obligations corresponding to increased inventory purchases.

Payables Turnover Ratio

The payables turnover ratio demonstrates significant fluctuations but generally indicates a decrease in turnover rate starting from early 2020. Ratios were as high as approximately 22 in early 2020 but fell sharply to a range around 9 to 12 in the subsequent quarters. This decline suggests that the company is taking longer to pay its suppliers over the periods following early 2020. Some quarters exhibit rebounds in the turnover ratio, with values exceeding 15, but the overall trend leans towards a moderately slower payment cycle. This pattern could reflect changes in working capital management, supplier terms negotiation, or cash flow considerations.

Combined Observations

The data collectively suggest a period of expansion in purchasing and production activities, as evidenced by rising COGS and accounts payable. Concurrently, a decreasing payables turnover ratio points toward increased payment days, possibly as a strategic approach to preserve liquidity amidst growing operational scale or changing market conditions. The fluctuations and occasional rebounds in turnover indicate an adaptive cash flow strategy rather than a static trend. The recent peaks in COGS and accounts payable imply substantial growth or inflationary pressure in costs that should be monitored.

Working Capital

Over the observed periods, working capital shows a generally increasing trend with some fluctuations. Initial values rise steadily from 668,642 thousand USD to a peak of approximately 1,187,520 thousand USD by early 2020. Thereafter, there is a noticeable dip around mid-2020, dropping to 726,446 thousand USD, followed by periods of recovery and growth reaching a high point around early 2024 at 2,429,316 thousand USD. The last few quarters show some decline, with working capital falling to just under 2,000,000 thousand USD by mid-2025.

Net Revenue

Net revenue displays variability with an overall upward trajectory. Starting at 782,315 thousand USD in mid-2019, revenues show significant quarterly fluctuations. A notable decline is observed in May 2020 (651,962 thousand USD), likely reflecting external economic impacts. Post-decline, net revenue rebounds impressively, especially from early 2021 onwards, with spikes surpassing 3,000,000 thousand USD in early 2024. Revenue then exhibits some volatility but remains elevated relative to the initial periods, maintaining levels above 2,200,000 thousand USD in subsequent quarters.

Working Capital Turnover Ratio

The working capital turnover ratio, available from early 2020, generally indicates efficient use of working capital with values mostly ranging between 3.35 and 6.06. Early 2020 shows high turnover ratios above 4.5, peaking around 6.06 quarter 1 2022, suggesting improved revenue generation per unit of working capital. Following this peak, the ratio experiences moderate variation, largely holding between 4.5 and 5.5, indicating sustained operational efficiency. A dip to around 3.96 occurs in early 2024, reflecting a temporary reduction in turnover efficiency, but it recovers to above 5.3 in the latest quarters.

Summary Insights

The financial data indicates a company undergoing growth with intermittent challenges affecting net revenue and working capital, particularly during mid-2020. Despite these fluctuations, both working capital and net revenue reach substantially higher levels by mid-2025 compared to 2019. The working capital turnover ratio suggests an overall effective use of working capital, with occasional variations reflecting changing business conditions. The pattern reveals resilience and expansion with periods of recalibration, likely in response to market or operational shifts.

The inventory turnover ratio and the average inventory processing period demonstrate notable fluctuations over the observed periods. The inventory turnover ratio begins at 3.39 and shows a general declining trend through early 2023, reaching as low as 1.88 before experiencing an increase that peaks at 3.04 in July 2024. Following this peak, the ratio again decreases gradually, ending at 2.59 in August 2025.

Conversely, the average inventory processing period exhibits an inverse pattern relative to the inventory turnover ratio, consistent with typical inventory management dynamics. Starting from 108 days, the processing period extends steadily, reaching a maximum of 195 days in January 2023. After this peak, there is a notable reduction to approximately 120 days in mid to late 2024, followed by a slight increase, stabilizing around 138 to 141 days by mid-2025.

Inventory Turnover Ratio

The initial value of 3.39 indicates a relatively efficient turnover. There is a decline observed through 2020 into early 2023, suggesting slower movement of inventory during this period. The peak in mid-2024 at 3.04 indicates improved efficiency, however, the subsequent decline into 2025 points to renewed slowing.

Average Inventory Processing Period

The lengthening of the processing period from 108 days to 195 days by early 2023 suggests growing inventory holding times, which potentially indicates challenges in inventory management or changes in demand patterns during this timeframe. The marked reduction to 120 days in 2024 and stabilization near that figure into 2025 suggest improvements in turnover speed or inventory management practices.

Overall, the data reflect a period of increasing inventory holding times and declining turnover efficiency through early 2023, followed by a recovery in turnover efficiency and reduced processing time beginning mid-2023 through 2024. Despite this recovery, late 2024 and 2025 show some renewed slowing tendencies. The inverse relationship between the two metrics underscores typical inventory dynamics and highlights periods where inventory management strategies may have been adjusted in response to market or operational conditions.

The receivables turnover ratio exhibits notable fluctuations over the reported periods, initially showing a very high value of 98.94 and then decreasing to a level around the high 60s and 70s in the subsequent quarters. After a period of volatility, the ratio experiences a resurgence, peaking at 98.38, followed by a general downward trend with intermittent recoveries. The trend suggests variability in how efficiently the company is managing its receivables, with some quarters indicating faster turnover and others reflecting a slowdown.

Correspondingly, the average receivable collection period in days remains relatively stable, fluctuating primarily between 4 and 5 days. There are brief periods where the collection period extends to 6 days, such as around January 29, 2023, indicating a slight delay in collections at those times. However, this metric generally maintains a narrow range, consistent with the typical industry standards for collection efficiency.

Receivables Turnover Ratio

The ratio demonstrates marked variability, with the highest value around 98.94 early in the data and several noticeable inflection points. Periods of lower turnover occur with values dropping to the low 60s and 70s, suggesting less frequent collection of receivables during those times. The overall pattern shows some recovery phases but lacks a consistent upward or downward trajectory, implying that receivables management effectiveness has been unstable.

Average Receivable Collection Period

Despite the fluctuation in turnover, the average collection period stays mostly within a tight window of 4 to 5 days, indicating a relatively quick conversion of receivables to cash. Temporary increases to 6 days do appear but do not persist, suggesting only short-term delays in collection practices.

Relationship Between Metrics

The inverse relationship between the turnover ratio and collection period is evident, as expected. When the turnover decreases, the collection period tends to increase slightly, and vice versa. The stability of the collection period around 4-5 days, however, indicates the changes in turnover are influenced by factors beyond changes in collection timing, possibly including credit policy changes, sales variance, or customer payment behavior.

Average inventory processing period

The average inventory processing period shows a general upward trend from May 2020 through January 2023, increasing from 108 days to a peak of 195 days. After reaching this peak, the period declines somewhat, fluctuating around 120 to 160 days through mid-2025. This indicates that the time taken to process inventory extended significantly during 2020 to early 2023 before shortening and stabilizing in recent periods.

Average receivable collection period

The average receivable collection period remains relatively stable over the observed quarters, fluctuating narrowly between 4 and 6 days. This consistency suggests steady effectiveness in collecting receivables without significant variance or disruption throughout the periods analyzed.

Operating cycle

The operating cycle mirrors the trend seen in the inventory processing period. It increases from 112 days in May 2020 to a high of 200 days by January 2023, indicating a lengthening of the full cycle of inventory conversion and receivable collection. Following this peak, the operating cycle decreases and stabilizes between 125 and 160 days through mid-2025, reflecting improvements or adjustments in inventory management and overall operational efficiency during the latter periods.

The analysis of the company's payables management over the presented periods reveals several noteworthy trends and fluctuations. The two key metrics examined are the payables turnover ratio and the average payables payment period, measured in days.

Payables Turnover Ratio

Data begins from the period ending May 3, 2020. Initially, the turnover ratio was relatively high at approximately 21.95, indicating frequent payments to suppliers during that quarter. Subsequently, there was a marked decline through late 2020 and early 2021, dropping to levels around 10.9 to 11.5, suggesting that payables were being settled less frequently during these periods.

From mid-2021 through mid-2022, the turnover ratio continued to trend downward, hitting lows near 9.14 to 9.3, implying an elongation of the payable cycle. However, this was followed by an abrupt increase to 20.95 in May 2022, an outlier compared to surrounding periods, indicating a significant acceleration in payment frequency.

After this peak, the ratio decreased again to roughly 12.78-12.96 through late 2022 and early 2023, showing moderate turnover activity. From mid-2023 onward, the ratio fluctuated between approximately 10.85 and 15.91, without a clear directional trend but demonstrating variability in payment timing.

Overall, the payables turnover ratio signifies periods of both accelerated and delayed payment practices, with some volatility especially noticeable around mid-2022.

Average Payables Payment Period (Days)

The days payable outstanding mirrors the inverse pattern of the turnover ratio, as expected. Starting around 17 days in early 2020, the payment period increased significantly toward late 2020 and early 2021, reaching levels in the low 30s and peaking at 40 days. This elongation indicates that the company took longer to settle its payables during these quarters.

Following the peak, there was a substantial reduction in the payment period to 17 days in May 2022, which aligns with the peak in payables turnover ratio, reflecting a strategic shift toward faster payments.

Subsequent periods show the payment period hovering mostly between 23 and 34 days, illustrating a return to a more moderate payment cycle. Notably, some quarters exhibit a decrease to around 23 days, suggesting intermittent efforts to reduce the payable cycle.

The fluctuation in the average payment period suggests adaptive cash management strategies possibly responding to operational needs or supplier arrangements.

In summary, the company's accounts payable behavior demonstrates variability over the analyzed time frame, with alternating phases of expedited and delayed payments. The pronounced changes in mid-2022 may reflect a shift in financial policy or external factors influencing liquidity and supplier negotiations. Overall, the data implies a dynamic approach to managing payables, balancing cash flow considerations with supplier relationships.

Average inventory processing period

The average inventory processing period exhibits a general upward trend from May 2020 through January 2023, rising from 108 days to a peak of 195 days. Following this peak, the period decreases to 120 days by July 2024 before slightly increasing again to 141 days by August 2025. This pattern suggests increasing inventory holding times in the initial periods, indicating possible inventory buildup or slower turnover, followed by a tightening inventory cycle towards the later periods.

Average receivable collection period

The average receivable collection period remains relatively stable over the entire timeframe, fluctuating narrowly between 4 and 6 days. This stability indicates consistent efficiency in collecting receivables, with no significant deterioration or improvement noted.

Average payables payment period

The average payables payment period shows variability with an overall increasing trend from May 2020 (17 days) to a peak of 40 days in May 2022. Subsequently, the period declines to a low of 17 days by April 2023, then oscillates around the mid-20 to low-30 day range through August 2025. This suggests changes in the company's payment practices, initially extending payment periods possibly to manage cash outflows, followed by more prompt payments in certain quarters.

Cash conversion cycle

The cash conversion cycle follows a pattern closely aligned with the inventory processing period, rising from 95 days in May 2020 to a peak of 166 days by January 2023. Thereafter, it declines to a low of 93 days in May 2024 before moderately increasing again to 115 days by August 2025. This indicates initial lengthening of the cash conversion cycle, reflecting slower cash turnover, with a shortening in later periods suggesting improved operational cash flow management.