lululemon athletica inc. (NASDAQ:LULU)

Inventory Turnover

The inventory turnover ratio exhibited a downward trend from 3.39 in February 2020 to a low of 2.5 in January 2023, indicating slower inventory movement over this period. However, there was a recovery in the subsequent years, with the ratio rising to 3.03 in January 2024 and slightly declining to 2.99 in February 2025.

Receivables Turnover

Receivables turnover showed volatility, starting very high at 98.94 in February 2020, sharply decreasing to 70.54 in January 2021, then rising again to 81.25 in January 2022. It declined to 61.02 in January 2023 before recovering to 77.1 and 88.11 in the following two years. This represents fluctuating efficiency in the collection of receivables.

Payables Turnover

The payables turnover ratio generally declined from 21.95 in February 2020 to a low of 9.14 in January 2022, suggesting an elongation of the payment period to suppliers. It rebounded to 20.95 in January 2023 before decreasing again to 11.51 and then increasing to 15.91 by February 2025. This indicates varying payment strategies over the years.

Working Capital Turnover

Working capital turnover improved significantly from 3.35 in February 2020 to a peak of 5.17 in January 2022, reflecting increased efficiency in using working capital to generate revenue. There was a slight decline to 4.86 in January 2023 and 3.96 in January 2024, followed by a recovery to 4.95 in February 2025.

Average Inventory Processing Period

The average inventory processing period increased steadily from 108 days in February 2020 to a maximum of 146 days in January 2023, demonstrating slower inventory turnover. The period then shortened to 120 days in January 2024 and stabilized around 122 days in February 2025.

Average Receivable Collection Period

This period remained relatively stable around 4 to 6 days throughout the timeframe, with only minor fluctuations, indicating a generally consistent receivable collection process.

Operating Cycle

The operating cycle lengthened from 112 days in February 2020 to a peak of 152 days in January 2023, indicating a slower overall conversion of inventory and receivables into cash. It then shortened to 125 days in January 2024 and remained almost unchanged at 126 days in February 2025.

Average Payables Payment Period

The average payables payment period increased from 17 days in February 2020 to as high as 40 days in January 2022, suggesting an extension of supplier payment terms. This period contracted sharply to 17 days in January 2023, rose again to 32 days in January 2024, and finally dropped to 23 days in February 2025.

Cash Conversion Cycle

The cash conversion cycle remained steady around 95 to 97 days from February 2020 through January 2022, then sharply increased to 135 days in January 2023. Following this, it improved to 93 days in January 2024 but edged up again to 103 days in February 2025. This indicates fluctuating efficiency in the cash flow cycle.

Cost of Goods Sold

The cost of goods sold has shown a consistent upward trend over the analyzed periods, increasing from approximately 1.76 billion US dollars in early 2020 to about 4.32 billion US dollars by early 2025. This indicates a significant growth in the company's expenditure on producing or purchasing goods, which may align with expanding sales volumes or rising input costs.

Inventories

Inventory levels have steadily risen from around 518 million US dollars in early 2020 to over 1.44 billion US dollars by early 2025. Notably, there was a sharp increase between 2021 and 2023, followed by a slight decrease in 2024 and a subsequent increase in 2025. This pattern could suggest variations in inventory management or changes in demand forecasts during these periods.

Inventory Turnover Ratio

The inventory turnover ratio exhibits a general declining trend from 3.39 in 2020 to 2.5 in 2023, indicating that inventory was being sold and replaced less frequently during this time. However, it rebounded slightly to around 3.03 in 2024 and then stabilized near 2.99 in 2025. This fluctuation implies some challenges in inventory movement efficiency, potentially due to market conditions or operational adjustments.

The financial data reveals a consistent upward trend in net revenue over the periods presented. Starting at approximately 3.98 billion USD in early 2020, net revenue increased steadily each year, reaching nearly 10.59 billion USD by early 2025. This growth indicates a strong revenue expansion trajectory over the six-year span.

Accounts receivable also displayed an overall increasing pattern, beginning at about 40.2 million USD in 2020 and rising to over 120 million USD by 2025. Notably, a significant jump occurred between 2021 and 2023, where receivables increased from around 62.4 million USD to approximately 133 million USD. This suggests that while sales were growing, the amount owed by customers rose at a notable pace during this period.

The receivables turnover ratio, which measures how efficiently the company collects its receivables, shows some variability. It started at a high level of 98.94 in 2020, indicating quick collections relative to receivables. Over the years, this ratio declined to its lowest point of 61.02 in 2023, then improved somewhat to 88.11 by 2025. The initial decline could reflect lengthening collection periods or slower payment by customers, whereas the improvement toward 2025 suggests a recovery in collection efficiency.

Net Revenue

Steady increase over six years, more than doubling from 2020 to 2025, indicative of strong sales growth.

Accounts Receivable

Marked increase, especially notable between 2021 and 2023, implying rising credit sales or slower collections during this period.

Receivables Turnover Ratio

Declined significantly between 2020 and 2023, signaling a reduction in collection efficiency, followed by partial recovery through 2025.

Cost of Goods Sold

The cost of goods sold (COGS) has shown a consistent upward trend over the periods analyzed. Starting at approximately 1.76 billion US dollars in early 2020, it rose steadily each year, reaching about 4.32 billion US dollars by early 2025. This increasing trend indicates expanding production or sales volume, or potentially rising input costs impacting overall expenses.

Accounts Payable

Accounts payable exhibited considerable fluctuations over the given periods. Beginning around 80 million US dollars in 2020, it surged significantly to about 289 million in 2022, then dropped sharply to 173 million in 2023. Subsequently, it rose again to approximately 348 million in 2024 before declining to 271 million in 2025. This volatility suggests variability in vendor payment timing or changes in credit terms and purchasing activities.

Payables Turnover Ratio

The payables turnover ratio, which indicates the frequency of paying off suppliers relative to purchases, demonstrated some irregular movement. It started at a high of 21.95 in early 2020, indicating rapid payment cycles, then decreased significantly to a low of 9.14 in 2022. The ratio rebounded to 20.95 in 2023, declined again in 2024, and partially recovered to 15.91 in 2025. This variability suggests changes in the company's payment practices, possibly reflecting shifts in cash management strategies or negotiation of payment terms with suppliers.

Working Capital

The working capital demonstrates a general increasing trend over the reported periods. Starting at approximately 1.19 billion in early 2020, it showed moderate growth through early 2021 and early 2022, followed by a more significant rise in early 2023 and early 2024, peaking near 2.43 billion. In early 2025, there is a slight decline to roughly 2.14 billion, though still substantially higher than the earlier years.

Net Revenue

Net revenue exhibits a consistent upward trajectory over the periods analyzed. Beginning at just under 4.0 billion in early 2020, revenue increased steadily each year. Notably, there is a marked acceleration from early 2021 onward, with revenues jumping from approximately 4.4 billion to over 10.5 billion by early 2025. This indicates strong and sustained growth in sales over time.

Working Capital Turnover Ratio

The working capital turnover ratio shows some variability across the periods. It started at 3.35 in early 2020 and increased to a peak of 5.17 in early 2022, suggesting improved efficiency in using working capital to generate net revenue. However, the ratio then declined to 3.96 by early 2024 before rising again to 4.95 in early 2025. This fluctuation implies some changes in the relationship between sales growth and working capital investment, with a recent improvement in turnover efficiency.

Overall Insights

The data reveals a scenario of robust revenue growth coupled with an increasing investment in working capital. The peak in working capital turnover in early 2022 suggests a period of efficient asset use to generate revenue, although the subsequent dip may indicate either increased working capital requirements or slower sales relative to capital. The resurgence in turnover ratio by early 2025 points to an improving balance between asset utilization and revenue generation, despite a slight reduction in working capital from the previous year.

Inventory Turnover

The inventory turnover ratio shows a declining trend from 3.39 in fiscal year 2020 to a low of 2.5 in fiscal year 2023, indicating a gradual slowdown in the frequency at which inventory is sold and replaced. However, a partial recovery is observed in the most recent two years, increasing slightly to 3.03 in fiscal year 2024 and maintaining a similar level of 2.99 in fiscal year 2025.

Average Inventory Processing Period

The average inventory processing period exhibits an opposite pattern to the inventory turnover ratio. It increases steadily from 108 days in fiscal year 2020 to 146 days in fiscal year 2023, suggesting that inventory remains on hand for a longer duration. In the subsequent years, the period shortens to 120 days in fiscal year 2024 and slightly increases again to 122 days in fiscal year 2025, corresponding with the improvements seen in inventory turnover.

Overall Analysis

The data reveal a general decline in inventory efficiency from 2020 through 2023, characterized by lower turnover and longer holding periods, which might reflect challenges in inventory management or changes in demand. The modest recovery in recent years indicates some improvement in managing inventory levels, potentially through better sales performance or enhanced stock control measures.

Receivables Turnover Ratio

The receivables turnover ratio exhibits a fluctuating trend over the reported periods. It started at a high level of 98.94 in February 2020, followed by a notable decline to 70.54 in January 2021. There was a partial recovery in January 2022, with the ratio increasing to 81.25, but this was followed by a significant decrease to 61.02 in January 2023. In the subsequent years, the ratio shows an upward trend, rising to 77.1 in January 2024 and further climbing to 88.11 by February 2025. Despite these variations, the overall movement suggests periods of both weakening and strengthening efficiency in managing receivables, with a positive trend emerging in the most recent years.

Average Receivable Collection Period

The average receivable collection period, measured in days, remained relatively stable throughout the years, fluctuating narrowly between 4 and 6 days. It began at 4 days in February 2020, slightly increased to 5 days in January 2021, and reverted to 4 days in January 2022. The period then extended to 6 days in January 2023, followed by a decrease to 5 days in January 2024 and returning to 4 days by February 2025. This stability indicates consistent collection efficiency, with minor deviations, reflecting effective credit and collection policies over the period.

Average Inventory Processing Period

There is an increasing trend in the average inventory processing period from 108 days in February 2020 to a peak of 146 days in January 2023. This indicates a lengthening of the time taken to process inventory over these years. However, subsequent periods show a reduction to 120 days in January 2024 and a slight increase to 122 days in February 2025, suggesting some improvement or stabilization after the peak.

Average Receivable Collection Period

The average receivable collection period remains relatively stable throughout the observed period, fluctuating marginally between 4 and 6 days. It started at 4 days in February 2020, peaked at 6 days in January 2023, and returned to 4 days by February 2025. This stability indicates consistent efficiency in receivables collection with minor variations.

Operating Cycle

The operating cycle exhibits a pattern similar to the inventory processing period, increasing steadily from 112 days in February 2020 to a high of 152 days in January 2023. This reflects a longer duration for the company to convert inventory and receivables into cash. Following the peak, the operating cycle decreases to 125 days in January 2024 and slightly rises to 126 days in February 2025, indicating an improved but cautious recovery in operational efficiency.

Payables Turnover

The payables turnover ratio exhibits a fluctuating pattern over the analyzed periods. The ratio started at 21.95 in the fiscal year ending February 2, 2020, then significantly declined to 11.25 and further down to 9.14 by January 30, 2022. Following this low, there was a substantial recovery to 20.95 in January 29, 2023, followed by another drop to 11.51 in January 28, 2024, and a moderate increase to 15.91 in the latest period ending February 2, 2025. This variability suggests inconsistency in the rate at which the company settles its payables from year to year.

Average Payables Payment Period

This metric, reflecting the average number of days the company takes to pay its suppliers, inversely mirrors the payables turnover trends as expected. Beginning at 17 days for the fiscal year ending February 2, 2020, it lengthened to 32 days by January 31, 2021, and extended further to 40 days at January 30, 2022. In the following year, the payment period shortened sharply back to 17 days in January 29, 2023, then increased again to 32 days in January 28, 2024, before decreasing moderately to 23 days in the most recent year ending February 2, 2025. These changes indicate fluctuating payment practices, with periods of quicker payment followed by slower cycles.

Overall Analysis

The alternating pattern in payables turnover and payment periods points to variable management of accounts payable across the years. The years with higher payables turnover and shorter payment periods likely indicate more aggressive payment policies, potentially reflecting improved liquidity or supplier relationship strategies. Conversely, years with lower turnover and longer payment periods suggest more cautious or constrained cash management or extended credit terms. The variability may also reflect broader operational or market conditions influencing financial strategy.

Average Inventory Processing Period

The average inventory processing period exhibits an overall increasing trend from 108 days in 2020 to a peak of 146 days in 2023. This increase indicates that inventory was held longer before being processed. However, the period decreases notably to 120 days in 2024 and then slightly rises to 122 days in 2025, suggesting some improvement or adjustment in inventory management after 2023.

Average Receivable Collection Period

The average receivable collection period remains relatively stable throughout the timeframe, fluctuating between 4 and 6 days. It started at 4 days in 2020, peaked at 6 days in 2023, and decreased again to 4 days by 2025. This stability suggests consistent efficiency in the collection of receivables, with only minor variations.

Average Payables Payment Period

The average payables payment period shows significant volatility. Beginning at 17 days in 2020, it increased substantially to 40 days in 2022, signaling a longer delay in payments to suppliers. In 2023, it sharply dropped back to 17 days, rose again to 32 days in 2024, and shortened to 23 days in 2025. This inconsistency may reflect changing payment policies or cash management strategies.

Cash Conversion Cycle

The cash conversion cycle remains close to mid-90s days from 2020 to 2022 but spikes notably to 135 days in 2023, indicating a considerable extension in the time taken to convert inventory and receivables into cash after accounting for payables. This peak suggests a temporary decline in operational efficiency. The cycle improves to 93 days in 2024 but rises slightly again to 103 days in 2025, reflecting partial recovery yet continued caution in working capital management.