What changed in this filing

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Item 1. Business

2025-03-27 compared with 2024-03-21 · 43 added, 62 removed, 186 unchanged (36% of the section changed)

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These core values attract passionate and motivated employees who are driven to achieve personal and professional goals, and share our purpose "to elevate human potential by helping people feel their best."

In this Annual Report on Form 10-K for the fiscal year ended January 28, 2024, lululemon athletica inc.

(together with its subsidiaries) is referred to as "lululemon," "the Company," "we," "us," or "our." We refer to the fiscal year ended January 28, 2024 as "2023," the fiscal year ended January 29, 2023 as "2022," and the fiscal year ended January 30, 2022 as "2021." Our next fiscal year ends on February 2, 2025 and is referred to as "2024."

In this Annual Report on Form 10-K for the fiscal year ended February 2, 2025, lululemon athletica inc.

(together with its subsidiaries) is referred to as "lululemon," "the Company," "we," "us," or "our." We refer to the fiscal year ended February 2, 2025 as "2024," the fiscal year ended January 28, 2024 as "2023." Our next fiscal year ends on February 1, 2026 and is referred to as "2025."

Components of this discussion of our business include:

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• Securities and Exchange Commission Filings

We offer a comprehensive line of performance apparel, footwear, and accessories marketed under the lululemon brand.

We offer a comprehensive line of technical athletic apparel, footwear, and accessories marketed under the lululemon brand.

Our apparel assortment includes items such as pants, shorts, tops, and jackets designed for a healthy lifestyle including

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We report three segments, Americas, China Mainland, and Rest of World, which is comprised of the APAC and EMEA regions on a combined basis.

During the fourth quarter of 2023, we revised the financial information which our Chief Executive Officer, who is our chief operating decision maker ("CODM"), uses to evaluate performance and allocate resources.

This resulted in a change in our identified operating segments.

As we have further executed on our omni-channel retail strategy, and continued to expand our operations in international markets, our performance reviews and resource allocation decisions have evolved to be made on a regional market basis.

Our segment results have been recast to reflect our regional market-based structure.

Historically, our segments were based on selling channel.

We continue to monitor our revenue performance by our selling channels which are further described below.

We operate an omni-channel retail model and aim to efficiently and effectively serve our guests in the ways most convenient to them.

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In 2024, the net revenue we generated in the Americas represented 75% of our total net revenue.

2023 2022 2021

(In thousands)

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Net revenue growth

11.9 % 28.6 % 40.3 %

Our operations in the Americas are core to our business and we aim to continue to grow our net revenue in this market through ongoing product innovation and by building brand awareness.

We also plan to continue to invest in our omni-channel capabilities, to open new retail locations, and to relocate, optimize, and renovate our existing locations as needed.

We generate net revenue in the Americas through our lululemon branded retail locations which include different sizes of company-operated stores, outlets, pop-ups, other temporary locations, and stores operated by a third-party under a supply and license agreement in Mexico.

We generate net revenue in the Americas through our lululemon branded retail locations which include different sizes of company-operated stores, outlets, pop-ups, and other temporary locations.

We also serve our guests via our e-commerce website www.lululemon.com, our mobile app, our “Like New” re-commerce program, and through certain wholesale arrangements including university campus retailers and other organizations that we partner with to sell co-branded lululemon products as well as through wholesale arrangements with yoga and fitness studios and other select partners.

On September 10, 2024, we acquired the lululemon branded retail locations and operations run by a third party in Mexico.

We had previously granted the third party the right to operate retail locations and to sell lululemon products in Mexico.

China Mainland

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In 2024, the net revenue we generated in China Mainland represented 13% of our total net revenue.

2023 2022 2021

(In thousands)

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In 2024, the net revenue we generated in APAC and EMEA represented 12% of our total net revenue.

2023 2022 2021

(In thousands)

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Where we identify growth opportunities, we plan to open new retail locations, including in new markets across the EMEA and APAC regions.

We operate lululemon branded retail locations in these markets in a variety of different formats including different sizes of company-operated stores, outlets, pop-ups, and stores operated by third-parties under supply and license agreements in the Middle East and Israel.

We also serve our guests via our country specific websites, our mobile app, and through third party regional marketplaces, such as Zalando, Lazada, and SSG.

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Our sales per square foot was $1,574 and $1,609 for 2024 and 2023, respectively.

Number of company-operated stores by market January 28, 2024 January 29, 2023

Number of company-operated stores by market February 2, 2025 January 28, 2024

United States 374 367

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Macau SAR 2 2

Number of company-operated stores by market January 28, 2024 January 29, 2023

Number of company-operated stores by market February 2, 2025 January 28, 2024

United Kingdom 19 20

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• Temporary locations - Our seasonal stores and pop-ups are typically opened for a short period of time enabling us to serve guests during peak shopping periods in markets where we do not ordinarily have a physical location, or to expand access in markets where we see high demand at our existing locations.

• Wholesale - We sell to partners that offer convenient access for both core and new guests, including yoga and fitness studios, university campus retailers, and other select partners.

• Wholesale - We sell to partners that offer convenient access for both core and new guests, including university campus retailers and other organizations that we partner with to sell co-branded lululemon products.

We also sell to yoga and fitness studios and other select partners.

• Outlets - We utilize outlets to sell slower moving inventory and inventory from prior seasons at discounted prices.

As of January 28, 2024, we operated 47 outlets, the majority of which were in the Americas.

As of February 2, 2025, we operated 52 outlets, the majority of which were in the Americas.

• Like New - Our re-commerce program allows guests to exchange their gently used lululemon products for merchandise credit.

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Under these arrangements we have granted certain third parties the right to operate lululemon branded retail locations and to sell lululemon products on websites in specific countries.

Number of retail locations operated by third parties by market January 28, 2024 January 29, 2023

On September 10, 2024, we acquired the lululemon branded retail locations and operations run by a third party in Mexico.

We had previously granted the third party the right to operate retail locations and to sell lululemon products in Mexico.

Number of retail locations operated by third parties by market February 2, 2025 January 28, 2024

United Arab Emirates 10 8

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Integrated Marketing

We believe that our brand awareness is relatively low, especially outside of the Americas, and also with our male guests.

This represents an opportunity for us and we have a multi-faceted strategy to build brand awareness, affinity, and guest loyalty.

This strategy is designed to leverage owned and paid channels, our ambassador network, brand partners, events, and content – to drive awareness, consideration, engagement, conversion, and ultimately loyalty and engagement at the global, regional, and local levels.

We believe that our brand awareness is relatively low, especially outside of the Americas, and also with men.

This represents an opportunity for us and we have designed a multi-faceted strategy that leverages what guests know us for;

our products, community, and experiences.

This strategy is designed to leverage owned and paid channels, our ambassador network, events, and content – to drive awareness, consideration, engagement, conversion, and ultimately loyalty and engagement at the global, regional, and local levels.

Product Design and Development

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In 2024, 52% of our fabrics were produced by our top five fabric suppliers, with the largest manufacturer producing 18%.

During 2023, 40% of our fabrics originated from Taiwan, 26% from China Mainland, and 12% from Sri Lanka, and the remainder from other regions.

During 2024, 35% of our fabrics originated from Taiwan, 28% from China Mainland, and 11% from South Korea, and the remainder from other regions.

We also source other raw materials which are used in our products, including items such as content labels, elastics, buttons, clasps, and drawcords from suppliers located predominantly in APAC and China Mainland.

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We do not, however, have any long-term contracts with the majority of our suppliers or manufacturing sources for the production and supply of our fabrics and garments, and we compete with other companies for fabrics, raw materials, and production.

We require that all of our suppliers and manufacturers adhere to our Vendor Code of Ethics regarding social and environmental sustainability practices.

Our product quality and sustainability teams closely assess and monitor each supplier's compliance with applicable laws and our Vendor Code of Ethics, including by partnering with leading inspection and verification firms.

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We also believe our ability to introduce new product innovations, combine function and fashion, and connect through in-store, online, and community experiences sets us apart from our competition.

addition, we believe our vertical retail distribution strategy and community-based marketing differentiates us further, allowing us to more effectively control our brand image and connect with our guests.

In addition, we believe our vertical retail distribution strategy and community-based marketing differentiates us further, allowing us to more effectively control our brand image and connect with our guests.

The market for athletic apparel is highly competitive.

It includes increasing competition from established companies that are expanding their production and marketing of performance products, as well as from frequent new entrants to the market.

We are in direct competition with wholesalers and direct sellers of athletic apparel and footwear, such as Nike, Inc., adidas AG, PUMA, Under Armour, Inc., and Columbia Sportswear Company.

We also compete with retailers who have expanded to include women's athletic apparel including The Gap, Inc.

(including the Athleta brand), Victoria's Secret with its sport and lounge offering, and Urban Outfitters, Inc.

We are in direct competition with global as well as regional and country-specific wholesalers and direct sellers of athletic apparel and footwear.

Our business is affected by the general seasonal trends common to the retail apparel industry.

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Our Impact Agenda sets out our social and environmental goals and strategy across three pillars - Be Human, Be Well, and Be Planet.

Details can be found in our Impact Report on our website (https://corporate.lululemon.com/our-impact).

Details can be found in our Impact Report on our website.

Included within our Impact Agenda is a goal to invest a total of $75.0 million to advance equity in well-being by the end of 2025.

As of January 28, 2024, we have invested a total of $44.8 million (1) towards this goal.

The Be Human pillar of our Impact Agenda sets out our focus areas with respect to human capital, including:

• Inclusion, Diversity, Equity, and Action (“IDEA”);

• Employee empowerment;

• Fair labor practices and the well-being of the people who make our products.

Inclusion, Diversity, Equity and Action

We believe IDEA is fundamental for shaping and building our company, industry, and communities, and for creating a shared sense of respect and belonging.

By continuously striving to be an inclusive, diverse, and equitable organization, we aim to reflect a variety of perspectives and meet the needs of the global communities we serve.

We are proud that as of January 28, 2024, approximately 50% of our board of directors, 70% of our senior executive leadership team, and 50% of our vice presidents and above are women, while approximately 75% of our overall workforce are women.

As of February 2, 2025, we have invested a total of $71.0 million (1) towards this goal.

The Be Human pillar of our Impact Agenda sets out our focus areas with respect to human capital, including inclusion for all, employee empowerment, and fair labor practices and the well-being of the people who make our products.

Inclusion for All

We are committed to fostering an environment where every individual feels valued and included, recognizing that diverse perspectives drive innovation and enrich our workplace.

We are proud that as of February 2, 2025, approximately 55% of our board of directors, 60% of our senior executive leadership team, and 45% of our vice presidents and above are women, while approximately 75% of our overall workforce are women.

During 2024, we implemented an ongoing feedback approach to gain insights into our workforce composition and gather measurable data on employees' feelings of engagement, inclusion, and belonging.

Our primary objective is to cultivate a workforce inspired and informed by the diversity of the communities we serve and where we operate.

We strive to maintain equitable pay, by geography, for comparable work across all our global operations.

We have achieved full pay equity across various demographics in regions where we analyze this data.

We offer all employees education, training, and facilitated discussions on topics such as preventing bias, ensuring equal opportunity, and fostering inclusive leadership behaviors.

We see strong engagement in inclusion-focused education and

(1) We have contributed $71.0 million to lululemon's Centre for Social Impact, $45.5 million of which has been contributed directly to social impact organizations.

The remaining $25.5 million primarily consists of contributions toward a donor-advised fund for future grant making.

(2) While we track male and female genders, we acknowledge this is not fully encompassing of all gender identities.

We use an annual voluntary global survey to help us understand the demographics of our employee base and provide us with access to tangible metrics to help us understand our employees’ sense of inclusion and belonging.

(3) In 2023, the participation rate was approximately 85%.

Our overall goal is to reflect the racial diversity (4) of the communities we serve and in which we operate.

We seek to maintain 100% gender pay equity within our entire global employee population, meaning equal pay for equal work across genders, by geography.

We have achieved full pay equity, including gender and race, in the United States, which is the only country where we currently collect individually attributable race data.

We offer all employees IDEA education, training, and guided conversations on a variety of topics, including anti-racism, anti-discrimination, and inclusive leadership behaviors.

We have established People Networks, which are employee resource groups for employees who have marginalized and historically underrepresented identities.

We see significant engagement in IDEA education and training across our global employee base.

We aim to foster a culture of inclusion by making IDEA part of our everyday conversation, and frequently review our policies, programs, and practices to identify ways to be more inclusive and equitable.

training across our global employee base.

We strive to foster a culture where inclusion is part of everyday conversations and regularly review our policies, programs, and practices to try to ensure they support a more inclusive and fair workplace.

Employee Empowerment

We believe our people are key to the success of our business.

As of January 28, 2024 we employed approximately 38,000 people worldwide.

As of February 2, 2025, we employed approximately 39,000 people worldwide.

We strive to foster a distinctive culture rooted in our core values that attracts and retains passionate and motivated employees who are driven to achieve personal and professional goals.

We believe our people succeed because we create an environment that fosters growth and is diverse and equitable.

(3) The voluntary demographic survey results presented above relate to all of our employees in the Americas, Europe, Australia, and New Zealand.

(4) "Racial diversity" is used to measure the non-white population.

We assess our performance and identify opportunities for improvement through an annual employee engagement survey.

In 2023, the participation rate was approximately 85% and our employee engagement score exceeded the retail industry average.

(5) Our engagement score suggests our people are proud to work for lululemon, they are motivated to contribute to work that aligns with their purpose, and they recommend lululemon as a great place to work.

We believe our people succeed because we create an environment that fosters growth and provides opportunities for all.

We understand that health and wealth programs need to offer choice at all stages of life.

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• Reimbursement programs which reward physical activity;

• A parenthood program which is a gender-neutral benefit that provides all eligible employees up to six months of paid leave;

• A parenthood program that provides all eligible employees up to six months of paid leave;

• An employee assistance program which provides free confidential support to all our employees and their families in a variety of areas from mental well-being to financial services to advice for new parents;

• Training and development of all of our employees including, but not limited to, mentorship programs, IDEA internships, leadership development, vision and goals, and coaching.

• Training and development of all of our employees including, but not limited to, mentorship programs, global internships, leadership development, vision and goals, and coaching.

Fair Labor Practices and the Well-Being of the People who Make our Products

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Our Responsible Supply Chain program is built on three pillars:

• Monitoring - Assessing and improving working conditions in factories.

• Integration - Integrating responsible purchasing practices across enterprise strategies, processes, and tools.

• Monitoring - Assessing and, in collaboration with suppliers, improving working conditions in facilities.

• Integration - Integrating responsible purchasing practices across key lululemon strategies, processes, and tools.

• Collaboration - Working with multi-stakeholder organizations, industry, suppliers, and brands to support systemic change and impact.

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and foreign utility and design patents, industrial designs in Canada, and registered community designs in Europe that protect our product innovations, distinctive apparel, and accessory designs.

(5) Based on an industry benchmark provided by the third party that administers this survey to our employees.

Securities and Exchange Commission Filings

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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-K

Item 1. Business