What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-06-01 compared with 2022-12-08 · 84 added, 137 removed, 391 unchanged (36% of the section changed)

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS (UNAUDITED)

lululemon athletica inc.

5 unchanged sentences

$ 950,607 $ 1,154,867

Accounts receivable 96,179 77,001

Accounts receivable, net 107,468 132,906

Inventories 1,580,313 1,447,367

50 unchanged sentences

Amounts in thousands, except per share amounts)

Quarter Ended Three Quarters Ended

2022 October 31,

2021 October 30,

2022 October 31,

Quarter Ended

Net revenue $ 2,000,792 $ 1,613,463

3 unchanged sentences

Amortization of intangible assets 1,878 2,195

Acquisition-related expenses — 24,127 — 39,934

Gain on disposal of assets — — ( 10,180 ) —

Income from operations 401,414 260,347

5 unchanged sentences

Foreign currency translation adjustment $ ( 42,750 ) $ ( 25,848 )

Net investment hedge gains (losses) 25,492 ( 7,207 ) 26,259 ( 18,318 )

Net investment hedge gains 17,720 5,056

Other comprehensive income (loss), net of tax $ ( 25,030 ) $ ( 20,792 )

8 unchanged sentences

Amounts in thousands)

Quarter Ended October 30, 2022

Exchangeable Stock Special Voting Stock Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total

Shares Shares Par Value Shares Par Value

Balance as of July 31, 2022 5,203 5,203 $ — 122,334 $ 612 $ 433,092 $ 2,636,377 $ ( 212,283 ) $ 2,857,798

Net income 255,470 255,470

Other comprehensive income (loss), net of tax ( 79,524 ) ( 79,524 )

Stock-based compensation expense 20,312 20,312

Common stock issued upon settlement of stock-based compensation 45 — 4,057 4,057

Shares withheld related to net share settlement of stock-based compensation ( 6 ) — ( 1,917 ) ( 1,917 )

Repurchase of common stock ( 55 ) — ( 100 ) ( 16,892 ) ( 16,992 )

Balance as of October 30, 2022 5,203 5,203 $ — 122,318 $ 612 $ 455,444 $ 2,874,955 $ ( 291,807 ) $ 3,039,204

Quarter Ended October 31, 2021

Exchangeable Stock Special Voting Stock Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total

Shares Shares Par Value Shares Par Value

Balance as of August 1, 2021 5,203 5,203 $ — 124,644 $ 623 $ 381,737 $ 2,445,845 $ ( 157,039 ) $ 2,671,166

Net income 187,788 187,788

Other comprehensive income (loss), net of tax 10,274 10,274

Stock-based compensation expense 21,657 21,657

Common stock issued upon settlement of stock-based compensation 83 — 7,907 7,907

Shares withheld related to net share settlement of stock-based compensation ( 9 ) — ( 3,914 ) ( 3,914 )

Repurchase of common stock ( 583 ) ( 2 ) ( 974 ) ( 235,447 ) ( 236,423 )

Balance as of October 31, 2021 5,203 5,203 $ — 124,135 $ 621 $ 406,413 $ 2,398,186 $ ( 146,765 ) $ 2,658,455

Three Quarters Ended October 30, 2022

Exchangeable Stock Special Voting Stock Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total

Quarter Ended April 30, 2023

Exchangeable Stock Special Voting Stock Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Stockholders' Equity

Shares Shares Par Value Shares Par Value

5 unchanged sentences

Shares withheld related to net share settlement of stock-based compensation ( 88 ) — ( 28,793 ) ( 28,793 )

Repurchase of common stock ( 1,183 ) ( 6 ) ( 2,096 ) ( 372,874 ) ( 374,976 )

Balance as of October 30, 2022 5,203 5,203 $ — 122,318 $ 612 $ 455,444 $ 2,874,955 $ ( 291,807 ) $ 3,039,204

Three Quarters Ended October 31, 2021

Exchangeable Stock Special Voting Stock Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total

Repurchase of common stock, including excise tax ( 292 ) ( 1 ) ( 530 ) ( 97,948 ) ( 98,479 )

Balance as of April 30, 2023 5,116 5,116 $ — 122,099 $ 610 $ 478,496 $ 3,118,584 $ ( 277,614 ) $ 3,320,076

Quarter Ended May 1, 2022

Exchangeable Stock Special Voting Stock Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Stockholders' Equity

Shares Shares Par Value Shares Par Value

6 unchanged sentences

Repurchase of common stock ( 708 ) ( 4 ) ( 1,234 ) ( 231,406 ) ( 232,644 )

Balance as of October 31, 2021 5,203 5,203 $ — 124,135 $ 621 $ 406,413 $ 2,398,186 $ ( 146,765 ) $ 2,658,455

Balance as of May 1, 2022 5,203 5,203 $ — 122,732 $ 614 $ 412,713 $ 2,471,432 $ ( 216,709 ) $ 2,668,050

See accompanying notes to the unaudited interim consolidated financial statements

2 unchanged sentences

Amounts in thousands)

Three Quarters Ended

2022 October 31,

Quarter Ended

Cash flows from operating activities

2 unchanged sentences

Depreciation and amortization 84,116 64,470

Gain on disposal of assets ( 10,180 ) —

Stock-based compensation expense 21,301 18,358

16 unchanged sentences

Settlement of net investment hedges ( 1,277 ) 10,024

Other investing activities 15,657 ( 10,000 )

Net cash used in investing activities ( 138,219 ) ( 101,328 )

13 unchanged sentences

Note 2 Recent Accounting Pronouncements

Note 3 Acquisition-Related Expenses

Note 4 Gain on Disposal of Assets

Note 5 Revolving Credit Facilities

Note 3 Revolving Credit Facilities and Supply Chain Financing Program

Note 4 Stock-Based Compensation and Benefit Plans

10 unchanged sentences

Nature of operations

lululemon athletica inc., a Delaware corporation, ("lululemon" and, together with its subsidiaries unless the context otherwise requires, the "Company") is engaged in the design, distribution, and retail of technical athletic apparel, footwear, and accessories, which are sold through a chain of company-operated stores, direct to consumer through e-commerce, outlets, sales from temporary locations, sales to wholesale accounts, license and supply arrangements, and recommerce.

lululemon athletica inc., a Delaware corporation, ("lululemon" and, together with its subsidiaries unless the context otherwise requires, the "Company") is engaged in the design, distribution, and retail of technical athletic apparel, footwear, and accessories, which are sold through a chain of company-operated stores, direct to consumer through e-commerce, outlets, sales to wholesale accounts, license and supply arrangements, recommerce, and sales from temporary locations.

Recommerce is the sale of repurchased product via the Company's "Like New" program.

The Company operates stores in the United States, the People's Republic of China ("PRC"), Canada, Australia, the United Kingdom, South Korea, Germany, New Zealand, Singapore, Japan, Ireland, France, Malaysia, Spain, Sweden, the Netherlands, Norway, and Switzerland.

There were 623 and 574 company-operated stores as of October 30, 2022 and January 30, 2022, respectively.

The Company also engages in the design and retail of in-home connected fitness equipment and associated content subscriptions through lululemon Studio, which evolved from the Company's former MIRROR brand during the third quarter of fiscal 2022.

The Company operates stores in the United States, the People's Republic of China ("PRC"), Canada, Australia, the United Kingdom, South Korea, Germany, New Zealand, Singapore, Japan, France, Ireland, Spain, Malaysia, Sweden, the Netherlands, Norway, and Switzerland.

There were 662 and 655 company-operated stores as of April 30, 2023 and January 29, 2023, respectively.

The Company also offers in-home connected fitness and associated content subscriptions through lululemon Studio.

Basis of presentation

The unaudited interim consolidated financial statements as of October 30, 2022 and for the quarters and three quarters ended October 30, 2022 and October 31, 2021 are presented in U.S.

The unaudited interim consolidated financial statements as of April 30, 2023 and for the quarters ended April 30, 2023 and May 1, 2022 are presented in U.S.

dollars and have been prepared by the Company under the rules and regulations of the Securities and Exchange Commission ("SEC").

8 unchanged sentences

Fiscal 2023 and fiscal 2022 are referred to as "2023," and "2022," respectively.

The first three quarters of 2022 and 2021 ended on October 30, 2022 and October 31, 2021, respectively.

The first quarter of 2023 and 2022 ended on April 30, 2023 and May 1, 2022, respectively.

The Company's business is affected by the pattern of seasonality common to most retail apparel businesses.

Historically, the Company has recognized a significant portion of its operating profit in the fourth fiscal quarter of each year as a result of increased net revenue during the holiday season.

Use of estimates

The preparation of financial statements in conformity with GAAP in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of net revenue and expenses during the reporting period.

Actual results could differ from those estimates.

Recent Accounting Pronouncements

1 unchanged sentence

The Company considers the applicability and impact of all Accounting Standard Updates ("ASUs").

ASUs adopted by the Company during the first three quarters of 2022 not listed below were assessed, and determined to be either not applicable or are expected to have minimal impact on its consolidated financial position or results of operations.

In November 2021, the FASB issued ASC 832, Government Assistance to require annual disclosures about the nature of certain government assistance received, the accounting policy used to account for the transactions, the location in the financial statements where such transactions were recorded and significant terms and conditions associated with such transactions.

The Company adopted this update prospectively during the first quarter of 2022 and it did not have a material impact on the Company's consolidated financial statements.

ASUs adopted by the Company during the first quarter of 2023 not listed below were assessed, and determined to be either not applicable or are expected to have minimal impact on its consolidated financial position or results of operations.

In September 2022, the FASB issued ASC 405-50, Liabilities - Supplier Finance Programs, to require annual and interim disclosures about the key terms of supplier finance programs used in connection with the purchase of goods and services along with information about the obligations under these programs, including the amount outstanding at the end of each

reporting period and a rollforward of those obligations.

The Company adopted this update during the first quarter of 2023 and the related disclosures are included in Note 3.

Revolving Credit Facilities and Supply Chain Financing Program.

Recently issued accounting pronouncements

ASUs recently issued not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on its consolidated financial position or results of operations.

The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods in those fiscal years, with early adoption permitted.

The Company is currently evaluating the impact that this new guidance may have on its consolidated financial statements.

Acquisition-Related Expenses

On July 7, 2020, the Company acquired all of the outstanding shares of MIRROR, an in-home fitness company with an interactive workout platform that features live and on-demand classes.

In connection with the acquisition, the Company recognized certain acquisition-related expenses which were expensed within acquisition-related expenses in the consolidated statements of operations.

The third quarter of 2021 included accelerated compensation expense related to the transition of the former MIRROR Chief Executive Officer to a temporary advisory role with the Company.

The following table summarizes the acquisition-related expenses recognized:

Third Quarter First Three Quarters

2022 2021 2022 2021

(In thousands)

Acquisition-related expenses:

Transaction and integration costs $ — $ 328 $ — $ 1,859

Acquisition-related compensation — 23,799 — 38,075

$ — $ 24,127 $ — $ 39,934

Income tax effects of acquisition-related expenses $ — $ ( 611 ) $ — $ ( 1,417 )

Gain on Disposal of Assets

During the second quarter of 2022, the Company completed the sale of an administrative office building, which resulted in a pre-tax gain of $ 10.2 million.

The income tax effect of the gain on disposal of assets was an expense of $ 1.7 million.

The building's carrying value of $ 5.4 million was first classified as held for sale and recognized within other current assets as of May 1, 2022 .

Revolving Credit Facilities

ASUs recently issued were assessed and determined to be either not applicable or are expected to have minimal impact on its consolidated financial position or results of operations.

Revolving Credit Facilities and Supply Chain Financing Program

North America revolving credit facility

2 unchanged sentences

Borrowings under the credit facility may be prepaid and commitments may be reduced or terminated without premium or penalty (other than customary breakage costs).

As of October 30, 2022, aside from letters of credit of $ 5.2 million, the Company had no other borrowings outstanding under this credit facility.

As of April 30, 2023, aside from letters of credit of $ 6.5 million, the Company had no other borrowings outstanding under this credit facility.

Borrowings made under the credit facility bear interest at a rate per annum equal to, at the Company's option, either (a) a rate based on the Secured Overnight Financing Rate as administered by the Federal Reserve Bank of New York ("SOFR"), or (b) an alternate base rate, plus, in each case, an applicable margin.

7 unchanged sentences

If an event of default occurs, the credit agreement may be terminated, and the maturity of any outstanding amounts may be accelerated.

As of October 30, 2022, the Company was in compliance with the covenants of the credit facility.

As of April 30, 2023, the Company was in compliance with the covenants of the credit facility.

China Mainland revolving credit facility

4 unchanged sentences

The Company is required to follow certain covenants.

As of October 30, 2022, the Company was in compliance with the covenants and, aside from letters of credit of 11.7 million Chinese Yuan ($ 1.6 million), there were no other borrowings or guarantees outstanding under this credit facility.

As of April 30, 2023, the Company was in compliance with the covenants and, aside from letters of credit of 25.1 million Chinese Yuan ($ 3.6 million), there were no other borrowings or guarantees outstanding under this credit facility.

Supply Chain Financing Program

The Company facilitates a voluntary supply chain financing ("SCF") program that allows its suppliers to elect to sell the receivables owed to them by the Company to a third party financial institution.

Participating suppliers negotiate arrangements

directly with the financial institution.

If a supplier chooses to participate in the SCF program it may request an invoice be paid earlier than it would by the Company, and the financial institution at its sole and absolute discretion, may elect to make an early payment to the supplier at a discount.

The Company’s obligations to its suppliers, including amounts due and scheduled payment terms, are not impacted by a supplier’s participation in the arrangement and the Company provides no guarantees to any third parties under the SCF program.

As of April 30, 2023 and January 29, 2023, $ 65.2 million and $ 17.6 million, respectively, was outstanding under the SCF program and presented within accounts payable.

Stock-Based Compensation and Benefit Plans

1 unchanged sentence

The Company's eligible employees participate in various stock-based compensation plans, provided directly by the Company.

Stock-based compensation expense charged to income for the plans was $ 58.8 million and $ 49.6 million for the first three quarters of 2022 and 2021, respectively.

Total unrecognized compensation cost for all stock-based compensation plans was $ 132.8 million as of October 30, 2022, which is expected to be recognized over a weighted-average period of 2.2 years.

A summary of the balances of the Company's stock-based compensation plans as of October 30, 2022, and changes during the first three quarters then ended, is presented below:

Stock-based compensation expense charged to income for the plans was $ 21.0 million and $ 18.2 million for the first quarter of 2023 and 2022, respectively.

Total unrecognized compensation cost for all stock-based compensation plans was $ 206.6 million as of April 30, 2023, which is expected to be recognized over a weighted-average period of 2.5 years.

A summary of the balances of the Company's stock-based compensation plans as of April 30, 2023, and changes during the first quarter then ended, is presented below:

Stock Options Performance-Based Restricted Stock Units Restricted Shares Restricted Stock Units

5 unchanged sentences

Forfeited/expired 6 307.34 1 335.71 — — 3 337.28

Balance as of October 30, 2022 875 $ 229.53 166 $ 295.93 4 $ 307.77 222 $ 325.95

Exercisable as of October 30, 2022 403 $ 155.62

Balance as of April 30, 2023 978 $ 264.40 181 $ 349.71 5 $ 308.66 248 $ 354.36

Exercisable as of April 30, 2023 495 $ 194.41

The Company's performance-based restricted stock units are awarded to eligible employees and entitle the grantee to receive a maximum of two shares of common stock per performance-based restricted stock unit if the Company achieves specified performance goals and the grantee remains employed during the vesting period.

9 unchanged sentences

Treasury yield curve for the period corresponding with the expected term of the options.

The following are weighted averages of the assumptions that were used in calculating the fair value of stock options granted during the first three quarters of 2022:

First Three Quarters

following are weighted averages of the assumptions that were used in calculating the fair value of stock options granted during the first quarter of 2023:

First Quarter

Expected term 3.75 years

7 unchanged sentences

All shares purchased under the ESPP are purchased in the open market.

During the third quarter of 2022, there were 25.6 thousand shares purchased.

During the first quarter of 2023, there were 27.7 thousand shares purchased.

Defined contribution pension plans

2 unchanged sentences

The Company matches 50 % to 75 % of the contribution depending on the participant's length of service, and the contribution is subject to a two year vesting period.

The Company's net expense for the defined contribution plans was $ 10.1 million and $ 8.8 million in the first three quarters of 2022 and 2021, respectively.

The Company's net expense for the defined contribution plans was $ 4.8 million and $ 3.4 million in the first quarter of 2023 and 2022, respectively.

Fair Value Measurement

6 unchanged sentences

The fair value measurement is categorized in its entirety by reference to its lowest level of significant input.

As of October 30, 2022 and January 30, 2022, the Company held certain assets and liabilities that are required to be measured at fair value on a recurring basis:

As of April 30, 2023 and January 29, 2023, the Company held certain assets and liabilities that are required to be measured at fair value on a recurring basis:

2023 Level 1 Level 2 Level 3 Balance Sheet Classification

12 unchanged sentences

The carrying values of these instruments approximate their fair value due to their short-term maturities.

The Company has short-term, highly liquid investments classified as cash equivalents, which are invested in money market funds and term deposits.

The Company has short-term, highly liquid investments classified as cash equivalents, which are invested in AAA-rated money market funds, which include investments in government bonds, and term deposits.

The Company records cash equivalents at their original purchase prices plus interest that has accrued at the stated rate.

14 unchanged sentences

These forward currency contracts are designated as net investment hedges.

The Company assesses hedge effectiveness based on

changes in forward rates.

The Company recorded no ineffectiveness from net investment hedges during the first three quarters of 2022.

The Company assesses hedge effectiveness based on changes in forward rates.

The Company recorded no ineffectiveness from net investment hedges during the first quarter of 2023.

The Company classifies the cash flows at settlement of its net investment hedges within investing activities in the consolidated statements of cash flows.

4 unchanged sentences

The resulting foreign currency gains and losses are recorded in selling, general and administrative expenses.

During the first three quarters of 2022, the Company entered into certain forward currency contracts designed to economically hedge the foreign currency exchange revaluation gains and losses that are recognized by its Canadian and Chinese subsidiaries on specific monetary assets and liabilities denominated in currencies other than the functional currency of the entity.

The Company has not applied hedge accounting to these instruments and the change in fair value of these derivatives is recorded within selling, general and administrative expenses.

During the first quarter of 2023, the Company entered into certain forward currency contracts designed to economically hedge the foreign currency exchange revaluation gains and losses that are recognized by its Canadian and Chinese subsidiaries on specific monetary assets and liabilities denominated in currencies other than the functional currency of the entity.

Company has not applied hedge accounting to these instruments and the change in fair value of these derivatives is recorded within selling, general and administrative expenses.

The Company classifies the cash flows at settlement of its forward currency contracts which are not designated in hedging relationships within operating activities in the consolidated statements of cash flows.

2 unchanged sentences

However, the Company's Master International Swap Dealers Association, Inc., Agreements and other similar arrangements allow net settlements under certain conditions.

As of October 30, 2022, there were derivative assets of $ 46.8 million and derivative liabilities of $ 24.9 million subject to enforceable netting arrangements.

As of April 30, 2023, there were derivative assets of $ 17.4 million and derivative liabilities of $ 10.0 million subject to enforceable netting arrangements.

The notional amounts and fair values of forward currency contracts were as follows:

October 30, 2022 January 30, 2022

April 30, 2023 January 29, 2023

Gross Notional Assets Liabilities Gross Notional Assets Liabilities

6 unchanged sentences

Forward currency contracts $ 17,388 $ 9,993 $ 16,707 $ 25,625

The forward currency contracts designated as net investment hedges outstanding as of October 30, 2022 mature on different dates between November 2022 and August 2023.

The forward currency contracts not designated in a hedging relationship outstanding as of October 30, 2022 mature on different dates between November 2022 and May 2023.

The forward currency contracts designated as net investment hedges outstanding as of April 30, 2023 mature on different dates between May 2023 and August 2023.

The forward currency contracts not designated in a hedging relationship outstanding as of April 30, 2023 mature on different dates between May 2023 and August 2023.

The pre-tax gains and losses on foreign currency exchange forward contracts recorded in accumulated other comprehensive income or loss were as follows:

Third Quarter First Three Quarters

2022 2021 2022 2021

First Quarter

(In thousands)

3 unchanged sentences

The pre-tax net foreign currency exchange and derivative gains and losses recorded in the consolidated statement of operations were as follows:

Third Quarter First Three Quarters

2022 2021 2022 2021

First Quarter

(In thousands)

5 unchanged sentences

The credit risk amount is the Company's unrealized gains on its derivative instruments, based on foreign currency rates at the time of nonperformance.

The Company's forward currency contracts are entered into with large, reputable financial institutions that are monitored by the Company for counterparty risk.

The Company's forward currency contracts are entered into with investment grade credit worthy and reputable financial institutions that are monitored by the Company for counterparty risk.

The Company's derivative contracts contain certain credit risk-related contingent features.

2 unchanged sentences

The details of the computation of basic and diluted earnings per share are as follows:

Third Quarter First Three Quarters

2022 2021 2022 2021

First Quarter

(In thousands, except per share amounts)

8 unchanged sentences

All classes of stock have, in effect, the same rights and share equally in undistributed net income.

For the first three quarters of 2022 and 2021, 50.1 thousand and 48.0 thousand stock options and awards, respectively, were anti-dilutive to earnings per share and therefore have been excluded from the computation of diluted earnings per share.

For the first quarter of 2023 and 2022, 0.1 million and 0.1 million stock options and awards, respectively, were anti-dilutive to earnings per share and therefore have been excluded from the computation of diluted earnings per share.

On January 31, 2019, the Company's board of directors approved a stock repurchase program for up to $ 500.0 million of the Company's common shares.

4 unchanged sentences

Common shares repurchased on the open market are at prevailing market prices, including under plans complying with the provisions of Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934.

The timing and actual number of common shares to be repurchased will depend upon market conditions, eligibility to trade, and other factors, in accordance with Securities and Exchange Commission requirements.

As of October 30, 2022, the remaining authorized value of shares available to be repurchased under this program was $ 812.5 million.

During the first three quarters of 2022 and 2021, 1.2 million and 1.4 million shares, respectively, were repurchased under the program at a total cost of $ 375.0 million and $ 491.3 million, respectively.

Subsequent to October 30, 2022, and up to December 2, 2022, 9.2 thousand shares were repurchased at a total cost of $ 3.4 million.

The timing and actual number of common shares to be repurchased will depend upon market conditions, eligibility to trade, and other factors, in accordance with Securities and Exchange Commission

requirements.

The authorized value of shares available to be repurchased under this program excludes the cost of commissions and excise taxes and as of April 30, 2023, the remaining authorized value was $ 645.7 million.

During the first quarter of 2023, 0.3 million shares were repurchased at a total cost including commissions and excise taxes of $ 98.5 million.

During the first quarter of 2022, 0.7 million shares were repurchased at a total cost including commissions of $ 232.6 million.

Subsequent to April 30, 2023, and up to May 26, 2023, 0.2 million shares were repurchased at a total cost including commissions and excise taxes of $ 57.1 million.

Supplementary Financial Information

6 unchanged sentences

Prepaid expenses and other current assets:

Prepaid inventories $ 18 $ 42,691

Other prepaid expenses 136,608 98,254

Prepaid expenses $ 143,109 $ 142,003

Forward currency contract assets 17,388 16,707

13 unchanged sentences

$ 1,312,793 $ 1,269,614

2022 January 30,

(In thousands)

Other non-current assets:

3 unchanged sentences

$ 161,725 $ 156,045

2023 January 29,

(In thousands)

Accrued liabilities and other:

2 unchanged sentences

Sales return allowances 44,999 55,528

Accrued duty 37,188 27,182

Forward currency contract liabilities 9,993 25,625

Accrued duty 29,782 21,046

Sales tax collected 19,639 20,183

Accrued rent 11,687 11,254

Accrued capital expenditures 17,141 19,365

Accrued rent 13,725 12,223

Accrued inventory liabilities 16,728 4,345

4 unchanged sentences

(i) company-operated stores and (ii) direct to consumer.

The remainder of its operations which includes outlets, temporary locations, lululemon Studio, sales to wholesale accounts, license and supply arrangements, and recommerce are included within Other.

Third Quarter First Three Quarters

2022 2021 2022 2021

The remainder of its operations, which includes outlets, sales to wholesale accounts, license and supply arrangements, recommerce, temporary locations, and lululemon Studio, are included within Other.

First Quarter

(In thousands)

10 unchanged sentences

Amortization of intangible assets 1,878 2,195

Acquisition-related expenses — 24,127 — 39,934

Gain on disposal of assets — — ( 10,180 ) —

Income from operations 401,414 260,347

12 unchanged sentences

Net Revenue by Geography and Category

The following table disaggregates the Company's net revenue by geographic area.

Third Quarter First Three Quarters

2022 2021 2022 2021

In addition to the disaggregation of net revenue by reportable segment in Note 9.

Segmented Information, the following table disaggregates the Company's net revenue by geographic area.

First Quarter

(In thousands)

1 unchanged sentence

Canada 253,347 244,944

Outside of North America 316,554 224,122 908,089 671,068

People's Republic of China 249,685 139,427

Rest of world 183,369 130,763

$ 2,000,792 $ 1,613,463

In addition to the disaggregation of net revenue by reportable segment, the following table disaggregates the Company's net revenue by category.

The following table disaggregates the Company's net revenue by category.

Other categories is primarily composed of accessories, lululemon Studio, and footwear.

Third Quarter First Three Quarters

2022 2021 2022 2021

First Quarter

(In thousands)

4 unchanged sentences

Legal Proceedings and Other Contingencies

In addition to the legal proceedings described below, the Company is, from time to time, involved in routine legal matters, and audits and inspections by governmental agencies and other third parties which are incidental to the conduct of its business.

The Company is, from time to time, involved in routine legal matters, and audits and inspections by governmental agencies and other third parties which are incidental to the conduct of its business.

This includes legal matters such as initiation and defense of proceedings to protect intellectual property rights, personal injury claims, product liability claims, employment claims, and similar matters.

1 unchanged sentence

The Company has recognized immaterial provisions related to the expected outcome of legal proceedings.

In April 2021, DISH Technologies L.L.C., and Sling TV L.L.C.

(DISH) filed a complaint in the United States District Court for the District of Delaware and, along with DISH DBS Corporation, also with the United States International Trade Commission (ITC) under Section 337 of the Tariff Act of 1930 against the Company and its Curiouser Products subsidiary (MIRROR), along with ICON Health & Fitness, Inc., FreeMotion Fitness, Inc., NordicTrack, Inc., and Peloton Interactive, Inc., alleging infringement of various patents related to fitness devices containing internet-streaming enabled video displays.

In the ITC complaint, DISH seeks an exclusion order barring the importation of MIRROR fitness devices, streaming components and systems containing components that infringe one or more of the asserted patents as well as a cease and desist order preventing the Company from carrying out commercial activities within the United States related to those products.

In the District of Delaware complaint, DISH is seeking an order permanently enjoining the Company from infringing the asserted patents, an award of damages for the infringement of the asserted patents, and an award of damages for lost sales.

In the ITC investigation, an Administrative Law Judge has issued an Initial Determination recommending an Exclusion Order and Cease and Desist Order be entered against the Company.

The Company has filed a petition to the ITC contesting the Initial Determination.

The Delaware litigation remains stayed pending resolution to the ITC investigation.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements