What changed in this filing

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Item 1. Financial Statements

2025-06-05 compared with 2024-12-05 · 128 added, 228 removed, 409 unchanged (47% of the section changed)

3 unchanged sentences

Amounts in thousands, except per share amounts)

2024 January 28,

2025 February 2,

Current assets

23 unchanged sentences

Non-current lease liabilities 1,424,945 1,300,637

Non-current income taxes payable — 15,864

Deferred income tax liabilities 98,189 98,188

24 unchanged sentences

Amounts in thousands, except per share amounts)

Quarter Ended Three Quarters Ended

2024 October 29,

2023 October 27,

2024 October 29,

Quarter Ended

2025 April 28,

Net revenue $ 2,370,660 $ 2,208,891

2 unchanged sentences

Selling, general and administrative expenses 942,871 842,426

Impairment of assets and restructuring costs — 74,501 — 74,501

Amortization of intangible assets 1,630 —

17 unchanged sentences

Amounts in thousands)

Quarter Ended October 27, 2024

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

Balance as of July 28, 2024 5,116 5,116 $ — 118,610 $ 593 $ 589,156 $ 3,751,713 $ ( 309,817 ) $ 4,031,645

Net income 351,870 351,870

Other comprehensive income (loss), net of tax ( 9,985 ) ( 9,985 )

Stock-based compensation expense 24,169 24,169

Common stock issued upon settlement of stock-based compensation 15 — 1,514 1,514

Shares withheld related to net share settlement of stock-based compensation ( 3 ) — ( 888 ) ( 888 )

Repurchase of common stock, including excise tax ( 1,576 ) ( 8 ) ( 3,549 ) ( 409,036 ) ( 412,593 )

Balance as of October 27, 2024 5,116 5,116 $ — 117,046 $ 585 $ 610,402 $ 3,694,547 $ ( 319,802 ) $ 3,985,732

Quarter Ended October 29, 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

Balance as of July 30, 2023 5,116 5,116 $ — 121,613 $ 608 $ 505,127 $ 3,267,589 $ ( 239,842 ) $ 3,533,482

Net income 248,714 248,714

Other comprehensive income (loss), net of tax ( 75,988 ) ( 75,988 )

Stock-based compensation expense 24,573 24,573

Common stock issued upon settlement of stock-based compensation 67 2 8,834 8,836

Shares withheld related to net share settlement of stock-based compensation ( 5 ) — ( 1,142 ) ( 1,142 )

Repurchase of common stock, including excise tax ( 553 ) ( 4 ) ( 1,002 ) ( 211,620 ) ( 212,626 )

Balance as of October 29, 2023 5,116 5,116 $ — 121,122 $ 606 $ 536,390 $ 3,304,683 $ ( 315,830 ) $ 3,525,849

Three Quarters Ended October 27, 2024

Quarter Ended May 4, 2025

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

Balance as of January 28, 2024 5,116 5,116 $ — 121,106 $ 606 $ 575,369 $ 3,920,362 $ ( 264,256 ) $ 4,232,081

Balance as of February 2, 2025 5,116 5,116 $ — 116,166 $ 581 $ 638,190 $ 4,109,717 $ ( 424,441 ) $ 4,324,047

Net income 314,572 314,572

4 unchanged sentences

Repurchase of common stock, including excise tax ( 1,363 ) ( 7 ) ( 3,297 ) ( 431,135 ) ( 434,439 )

Balance as of October 27, 2024 5,116 5,116 $ — 117,046 $ 585 $ 610,402 $ 3,694,547 $ ( 319,802 ) $ 3,985,732

Three Quarters Ended October 29, 2023

Balance as of May 4, 2025 5,116 5,116 $ — 114,909 $ 574 $ 632,564 $ 3,993,154 $ ( 336,722 ) $ 4,289,570

Quarter Ended April 28, 2024

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

7 unchanged sentences

Repurchase of common stock, including excise tax ( 751 ) ( 4 ) ( 1,692 ) ( 297,783 ) ( 299,479 )

Balance as of October 29, 2023 5,116 5,116 $ — 121,122 $ 606 $ 536,390 $ 3,304,683 $ ( 315,830 ) $ 3,525,849

Balance as of April 28, 2024 5,116 5,116 $ — 120,470 $ 602 $ 570,286 $ 3,944,000 $ ( 295,080 ) $ 4,219,808

See accompanying notes to the unaudited interim consolidated financial statements

2 unchanged sentences

Amounts in thousands)

Three Quarters Ended

2024 October 29,

Quarter Ended

2025 April 28,

Cash flows from operating activities

2 unchanged sentences

Depreciation and amortization 114,529 95,759

lululemon Studio obsolescence provision — 23,709

Impairment of assets and restructuring costs — 74,501

Stock-based compensation expense 23,091 25,758

1 unchanged sentence

Changes in operating assets and liabilities:

Accounts receivable ( 18,504 ) ( 2,624 )

Inventories ( 174,319 ) ( 36,425 )

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Other current and non-current liabilities ( 1,927 ) 2,236

Net cash provided by operating activities 871,323 912,066

Net cash (used in) provided by operating activities ( 118,954 ) 127,524

Cash flows from investing activities

1 unchanged sentence

Settlement of net investment hedges 48,671 ( 856 )

Acquisition, net of cash acquired ( 130,996 ) —

Other investing activities ( 3,250 ) —

2 unchanged sentences

Proceeds from settlement of stock-based compensation 221 3,393

Shares withheld related to net share settlement of stock-based compensation ( 34,259 ) ( 30,877 )

Taxes paid related to net share settlement of stock-based compensation ( 25,641 ) ( 32,542 )

Repurchase of common stock ( 434,439 ) ( 299,479 )

Other financing activities ( 8,115 ) —

Net cash used in financing activities ( 467,974 ) ( 328,628 )

8 unchanged sentences

Note 2 Recent Accounting Pronouncements

Note 3 Acquisition

Note 4 Impairment of Assets and Restructuring Costs

Note 3 Revolving Credit Facilities

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Americas, China Mainland, Asia Pacific ("APAC"), and Europe and the Middle East ("EMEA").

It conducts its business through a number of different channels in each market, including company-operated stores, e-commerce, temporary locations, wholesale, outlets, a re-commerce program, and license and supply arrangements.

There were 749 and 711 company-operated stores as of October 27, 2024 and January 28, 2024, respectively.

It conducts its business through a number of different channels in each market, including company-operated stores, e-commerce, outlets, temporary locations, wholesale, license and supply arrangements, and a re-commerce program.

There were 770 and 767 company-operated stores as of May 4, 2025 and February 2, 2025, respectively.

Basis of presentation

The unaudited interim consolidated financial statements, including the financial position as of October 27, 2024 and the results of operations and cash flows for the periods disclosed, are presented in U.S.

The unaudited interim consolidated financial statements, including the financial position as of May 4, 2025 and the results of operations and cash flows for the periods disclosed, 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").

The financial information is presented in accordance with United States generally accepted accounting principles ("GAAP") for interim financial information and, accordingly, does not include all of the information and footnotes required by GAAP for complete financial statements.

The financial information as of January 28, 2024 is derived from the Company's audited consolidated financial statements and related notes for the fiscal year ended January 28, 2024, which are included in Item 8 in the Company's fiscal 2023 Annual Report on Form 10-K filed with the SEC on March 21, 2024.

The financial information as of February 2, 2025 is derived from the Company's audited consolidated financial statements and related notes for the fiscal year ended February 2, 2025, which are included in Item 8 in the Company's fiscal 2024 Annual Report on Form 10-K filed with the SEC on March 27, 2025.

These unaudited interim consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented.

These unaudited interim consolidated financial statements should be read in conjunction with the Company's consolidated financial statements and related notes included in Item 8 in the Company's fiscal 2024 Annual Report on Form 10-K.

Recent Accounting Pronouncements sets out the impact of recent accounting pronouncements.

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

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The results of operations, financial position, and cash flows of the Mexico operations have been included in the Company's consolidated financial statements since the date of acquisition.

Please refer to Note 3.

Acquisition for further information.

The Company's fiscal year ends on the Sunday closest to January 31 of the following year, typically resulting in a 52-week year, but occasionally giving rise to an additional week, resulting in a 53-week year.

Fiscal 2025 will end on February 1, 2026 and will be a 52-week year.

Fiscal 2023 was a 52-week year and ended on January 28, 2024.

Fiscal 2024 was a 53-week year and ended on February 2, 2025.

Fiscal 2025 and fiscal 2024 are referred to as "2025," and "2024," respectively.

The first three quarters of 2024 and 2023 ended on October 27, 2024 and October 29, 2023, respectively.

The first quarter of 2025 and 2024 ended on May 4, 2025 and April 28, 2024, respectively.

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

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Recently issued accounting pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

Entities will be required to provide disclosures of significant segmented expenses and other categories used by the Chief Operating Decision Maker ("CODM") in order to enhance disclosure at the segment level.

This amendment is effective for annual periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024, and is applied retrospectively for periods presented in the financial statements.

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

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

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Entities will be required to provide disaggregated disclosures for certain income statement expense line items.

This amendment is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, and shall be applied retrospectively for periods presented in the financial statements.

This amendment is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, and will be applied retrospectively for periods presented in the financial statements.

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

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

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

The following table summarizes the fair value of the consideration transferred, as well as the calculation of goodwill based on the excess of consideration over the provisional fair value of net assets acquired.

September 10, 2024

(In thousands)

Fair value of consideration transferred:

Cash to shareholders $ 159,380

Contingent consideration 15,000

Settlement of intercompany balances 6,975

Less cash acquired ( 5,234 )

Fair value of consideration transferred, net of cash and cash equivalents acquired $ 176,121

Less fair value of net assets acquired:

Assets acquired:

Inventories $ 15,275

Intangible assets 15,500

Other current and non-current assets 14,013

Liabilities assumed ( 15,668 )

Net assets acquired $ 29,120

Goodwill $ 147,001

The purchase price allocation remains provisional as the Company is still obtaining all the information necessary to finalize the fair value of acquired intangibles, deferred taxes, certain contingencies, and the resulting amount of goodwill as of the date of acquisition.

Goodwill relates to the assembled workforce and benefits expected as a result of the acquisition and has been allocated to the Americas segment.

None of the goodwill is expected to be deductible for income tax purposes.

Reacquired franchise rights were valued using the future expected cash flows of the remaining contractual franchise period until November 2026.

These intangible assets have a fair value of $ 15.5 million, which is expected to be amortized until

November 2026.

Contingent consideration of $ 15.0 million relates to performance related conditions from the acquisition date to December 31, 2025, and has been recognized at fair value.

Of the net cash paid to shareholders, $ 131.0 million was paid during the third quarter of 2024, and $ 23.1 million was paid subsequent to October 27, 2024.

The Company has not disclosed pro forma information of the combined business as the transaction is not material to net revenue or net earnings.

During the first three quarters of 2024, the Company recognized $ 2.5 million in acquisition-related expenses within selling, general and administrative expenses primarily related to legal, accounting, valuation, and other professional services.

Impairment of Assets and Restructuring Costs

During the third quarter of 2023, the Company decided to cease selling the lululemon Studio Mirror hardware.

It also contracted with Peloton Interactive, Inc.

to be the exclusive digital fitness content provider to existing lululemon Studio subscribers, and stopped producing its own digital fitness content.

The Company ceased selling the lululemon Studio Mirror and new digital content subscriptions in December 2023.

During the third quarter of 2023, the Company recognized certain inventory provisions, asset impairments, and restructuring costs related to lululemon Studio.

The following table summarizes the amounts recognized:

Third Quarter

(In thousands)

Costs recorded in cost of goods sold:

lululemon Studio obsolescence provision $ — $ 23,709

Costs recorded in operating expenses:

Impairment of assets:

Impairment of intangible assets $ — $ 16,951

Impairment of cloud computing arrangement implementation costs — 16,074

Impairment of property and equipment — 11,161

Restructuring costs — 30,315

Impairment of assets and restructuring costs $ — $ 74,501

Total pre-tax charges $ — $ 98,210

Income tax effects of charges $ — $ ( 26,085 )

Total after-tax charges $ — $ 72,125

lululemon Studio obsolescence provision

As a result of the decision to cease selling the lululemon Studio Mirror, the Company recognized an inventory obsolescence provision of $ 23.7 million during the third quarter of 2023.

The net realizable value of the lululemon Studio inventory was based on assumptions regarding liquidation value.

Impairment of assets

As a result of the Company's decision to no longer produce digital fitness content and to cease the sale of the lululemon Studio Mirror, the Company performed impairment testing for the lululemon Studio asset group as of October 29, 2023.

The undiscounted cash flows of the lululemon Studio asset group were less than their carrying value, and therefore the Company calculated the fair value of the asset group, which was also less than its carrying value.

As a result of the impairment test, the Company recognized asset impairments totaling $ 44.2 million during the third quarter of 2023.

The fair value of long-lived

assets was based on a discounted cash flow model, and is a Level 3 non-recurring fair value measurement.

The key assumptions used to estimate the fair value were subscriber churn rates and operating costs.

Restructuring costs

The Company recognized restructuring costs of $ 30.3 million for lululemon Studio primarily related to contract termination costs, employee severance costs, and professional fees during the third quarter of 2023.

Revolving Credit Facilities

Americas revolving credit facility

On December 14, 2021, the Company entered into an amended and restated credit agreement extending its existing credit facility, which provides for $ 400.0 million in commitments under an unsecured five-year revolving credit facility.

The credit facility has a maturity date of December 14, 2026, subject to extension under certain circumstances.

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 27, 2024, aside from letters of credit of $ 6.5 million, the Company had no other borrowings outstanding under this credit facility.

The Company maintains an unsecured revolving credit facility with total commitments of $ 400.0 million and a maturity date of December 14, 2026.

The facility permits prepayment of borrowings and reductions or terminations of commitments at any time without premium or penalty, subject to customary breakage costs.

As of May 4, 2025, the Company had no borrowings outstanding under this facility other than $ 6.6 million in outstanding letters of credit and guarantee.

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.

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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 27, 2024, the Company was in compliance with the covenants of the credit facility.

As of May 4, 2025, the Company was in compliance with the covenants of the credit facility.

China Mainland revolving credit facility

3 unchanged sentences

The Company is required to follow certain covenants.

As of October 27, 2024, the Company was in compliance with the covenants and, aside from letters of credit of 44.1 million Chinese Yuan ($ 6.2 million), there were no other borrowings or guarantees outstanding under this credit facility.

As of May 4, 2025, the Company was in compliance with the covenants and, there were no borrowings or guarantees outstanding under this facility other than letters of credit of 48.7 million Chinese Yuan ($ 6.7 million).

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.

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 October 27, 2024 and January 28, 2024, $ 49.9 million and $ 42.1 million, respectively, were outstanding under the SCF program and presented within accounts payable.

As of May 4, 2025 and February 2, 2025, $ 45.2 million and $ 36.3 million, respectively, were outstanding under the SCF program and presented within accounts payable.

Stock-Based Compensation and Benefit Plans

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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 $ 70.5 million and $ 69.5 million for the first three quarters of 2024 and 2023, respectively.

Total unrecognized compensation cost for all stock-based compensation plans was $ 156.8 million as of October 27, 2024, which is expected to be recognized over a weighted-average period of 2.1 years.

A summary of the balances of the Company's stock-based compensation plans as of October 27, 2024, and changes during the first three quarters then ended, is presented below:

Stock-based compensation expense charged to income for the plans was $ 23.0 million and $ 25.4 million for the first quarter of 2025 and 2024, respectively.

Total unrecognized compensation cost for all stock-based compensation plans was $ 208.8 million as of May 4, 2025, 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 May 4, 2025, and changes during the first quarter of 2025, is presented below:

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

1 unchanged sentence

(In thousands, except per share amounts)

Balance as of January 28, 2024 783 $ 285.69 175 $ 349.84 4 $ 370.85 223 $ 359.12

Balance as of February 2, 2025 849 $ 314.27 177 $ 371.83 5 $ 317.86 239 $ 371.09

Granted 291 283.06 158 311.57 — — 172 282.93

1 unchanged sentence

Forfeited/expired 11 358.69 3 365.02 — — 5 357.15

Balance as of October 27, 2024 910 $ 309.62 180 $ 371.76 5 $ 317.86 242 $ 370.02

Exercisable as of October 27, 2024 448 $ 249.06

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.

The fair value of performance-based restricted stock units is based on the closing price of the Company's common stock on the grant date.

Expense for performance-based restricted stock units is recognized when it is probable that the performance goal will be achieved.

Balance as of May 4, 2025 1,123 $ 306.87 232 $ 330.44 5 $ 317.86 317 $ 322.27

Exercisable as of May 4, 2025 546 $ 284.91

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

The fair value of PSU is based on the closing price of the Company's common stock on the grant date.

Expense for PSU is recognized when it is probable that the performance goal will be achieved.

The grant date fair value of the restricted shares and restricted stock units is based on the closing price of the Company's common stock on the grant date.

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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 2024:

First Three Quarters

The following are weighted averages of the assumptions that were used in calculating the fair value of stock options granted during the first quarter of 2025:

First Quarter

Expected term 4.00 years

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

During the third quarter of 2024, there were 39.7 thousand shares purchased.

As of October 27, 2024, 4.3 million shares remain authorized to be purchased under the ESPP.

During the first quarter of 2025, there were 35.2 thousand shares purchased.

As of May 4, 2025, 4.2 million shares remain authorized to be purchased under the ESPP.

Defined contribution pension plans

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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 $ 16.4 million and $ 14.6 million in the first three quarters of 2024 and 2023, respectively.

The Company's net expense for the defined contribution plans was $ 6.2 million and $ 5.8 million in the first quarter of 2025 and 2024, respectively.

Fair Value Measurement

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

As of October 27, 2024 and January 28, 2024, the Company held certain assets and liabilities that are required to be measured at fair value on a recurring basis:

As of May 4, 2025 and February 2, 2025, the Company held certain assets and liabilities that are required to be measured at fair value on a recurring basis:

2025 Level 1 Level 2 Level 3 Balance Sheet Classification

1 unchanged sentence

Money market funds $ 71,080 $ 71,080 $ — $ — Cash and cash equivalents

Term deposits 8 — 8 — Cash and cash equivalents

Forward currency contract assets 41,046 — 41,046 — Prepaid expenses and other current assets

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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 2024.

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 2025.

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

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

During the first three quarters of 2024, 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.

During the first quarter of 2025, 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.

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

As of October 27, 2024, there were derivative assets of $ 36.1 million and derivative liabilities of $ 33.8 million subject to enforceable netting arrangements.

As of May 4, 2025, there were derivative assets of $ 41.0 million and derivative liabilities of $ 42.1 million subject to enforceable netting arrangements.

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

October 27, 2024 January 28, 2024

May 4, 2025 February 2, 2025

Gross Notional Assets Liabilities Gross Notional Assets Liabilities

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Forward currency contracts $ 41,046 $ 42,126 $ 76,848 $ 74,638

The forward currency contracts designated as net investment hedges outstanding as of October 27, 2024 mature on different dates between October 2024 and May 2025.

The forward currency contracts not designated in a hedging relationship outstanding as of October 27, 2024 mature on different dates between October 2024 and May 2025.

The forward currency contracts designated as net investment hedges outstanding as of May 4, 2025 mature on different dates between May 2025 and November 2025.

The forward currency contracts not designated in a hedging relationship outstanding as of May 4, 2025 mature on different dates between May 2025 and November 2025.

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

2024 2023 2024 2023

First Quarter

(In thousands)

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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

2024 2023 2024 2023

First Quarter

(In thousands)

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

Third Quarter First Three Quarters

2024 2023 2024 2023

First Quarter

(In thousands, except per share amounts)

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

For the first three quarters of 2024 and 2023, 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 March 23, 2022, the Company's board of directors approved a stock repurchase program for up to $ 1.0 billion of the Company's common shares on the open market or in privately negotiated transactions.

During the first quarter of 2024, the Company completed the remaining stock repurchases under this program.

On November 29, 2023, the Company's board of directors approved an additional stock repurchase program for up to $ 1.0 billion of the Company's common shares on the open market or in privately negotiated transactions.

On May 29, 2024, the Company's board of directors approved a $ 1.0 billion increase to the existing stock repurchase program.

The repurchase plan has no time limit and does not require the repurchase of a minimum number of shares.

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.

The authorized value of shares available to be repurchased under this program excludes the cost of commissions and excise taxes and as of October 27, 2024, the remaining authorized value was $ 900.1 million.

During the first three quarters of 2024 and 2023, 4.2 million and 1.4 million shares, respectively, were repurchased at a total cost including commissions and excise taxes of $ 1.3 billion and $ 504.6 million, respectively.

Subsequent to October 27, 2024, and up to November 29, 2024, 0.4 million shares were repurchased at a total cost including commissions and excise taxes of $ 120.6 million.

For the first quarter of 2025 and 2024, 0.2 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 March 23, 2022, the Company's board of directors approved a stock repurchase program authorizing up to $ 1.0 billion of common shares, which was fully utilized during the first quarter of 2024.

Subsequently, the board of directors approved a new repurchase program authorizing up to $ 3.0 billion in aggregate, including $ 1.0 billion initially authorized on November 29, 2023, and additional $ 1.0 billion increases on May 29, 2024 and December 3, 2024.

This program does not have an expiration date or require a minimum number of shares to be repurchased.

Repurchases may be made on the open market at prevailing prices or through privately negotiated transactions, including under plans pursuant to Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934.

The timing and amount of

repurchases will depend on market conditions, trading eligibility, and other factors.

As of May 4, 2025, the remaining authorized amount available under the program, excluding commissions and excise taxes was $ 1.1 billion.

During the first quarter of 2025 and 2024, 1.4 million and 0.8 million shares, respectively, were repurchased at a total cost including commissions and excise taxes of $ 434.4 million and $ 299.5 million, respectively.

Subsequent to May 4, 2025, and up to May 30, 2025, 0.2 million shares were repurchased at a total cost including commissions and excise taxes of $ 55.7 million.

Supplementary Financial Information

A summary of certain consolidated balance sheet accounts is as follows:

2024 January 28,

2025 February 2,

(In thousands)

24 unchanged sentences

$ 256,417 $ 237,841

2024 January 28,

2025 February 2,

(In thousands)

1 unchanged sentence

Accrued operating expenses $ 163,315 $ 166,745

Forward currency contract liabilities 42,126 74,638

Sales return allowances 61,574 73,892

Accrued freight 47,909 53,121

Accrued capital expenditures 31,497 31,936

Accrued duty 70,097 45,400

Accrued digital marketing 28,147 45,392

Accrued capital expenditures 26,264 36,690

Accrued rent 18,803 17,962

Accrued inventory liabilities 10,093 4,783

Sales tax collected 22,033 16,967

Forward currency contract liabilities 33,768 2,872

Other 26,728 28,656

1 unchanged sentence

Segmented Information

The Company's operating segments are based on the financial information the CODM, who is the Chief Executive Officer, uses to evaluate performance and allocate resources.

During the fourth quarter of 2023, the financial information the CODM regularly uses to evaluate performance and allocate resources was revised.

As the Company further executed on its omni-channel retail strategy, and with the continued expansion of its international operations, the CODM has shifted resource allocation decisions to be focused by regional market, rather than by selling channel.

This resulted in a change in the Company's operating segments.

Since January 28, 2024, the Company has reported three segments:

Americas, China Mainland, and Rest of World, which is APAC and EMEA on a combined basis.

The Company's segments are based on the financial information the CODM, who is the Chief Executive Officer, uses to evaluate performance and allocate resources.

The CODM approves the annual budget on a segment level, and regularly assesses the performance of the Company's segments using key financial metrics, including net revenue and segmented income from operations.

The Company reports three segments:

Americas, China Mainland, and Rest of World, which is comprised of its non-significant operating segments APAC and EMEA reported on a combined basis.

The Company does not report capital expenditures and assets by segment as that information is not reviewed by the CODM.

Previously, the Company's operating segments were comprised of company-operated stores, direct to consumer (or "e-commerce"), and other.

The Company has recast the prior period information to reflect its new operating segments.

Third Quarter First Three Quarters

2024 2023 2024 2023

(In thousands)

Americas $ 1,770,382 $ 1,732,398 $ 5,134,079 $ 5,019,909

First Quarter 2025

China Mainland

Rest of World

Total Segments

Corporate (1)

(In thousands)

Net revenue $ 1,674,558 $ 368,101 $ 328,001 $ 2,370,660 $ — $ 2,370,660

Product costs (2)

480,820 81,815 90,264 652,899 — 652,899

Segmented income from operations:

Americas $ 654,939 $ 636,714 $ 1,889,206 $ 1,878,506

China Mainland 110,600 76,792 349,463 234,158

Rest of World 68,762 45,552 209,443 140,638

Other cost of sales (2)

156,647 50,273 58,471 265,391 69,244 334,635

General corporate expense 342,522 321,480 983,465 931,296

lululemon Studio obsolescence provision — 23,709 — 23,709

Impairment of assets and restructuring costs — 74,501 — 74,501

Selling, general and administrative expenses 447,760 82,378 106,410 636,548 306,323 942,871

Amortization of intangible assets — — — — 1,630 1,630

2 unchanged sentences

Income before income tax expense $ 450,411

Supplemental information:

Depreciation and amortization (3)

Americas $ 51,726 $ 45,074 $ 143,876 $ 124,724

$ 51,441 $ 8,576 $ 8,712 $ 68,729 $ 45,800 $ 114,529

First Quarter 2024

China Mainland

Rest of World

Total Segments

Corporate (1)

(In thousands)

Net revenue $ 1,622,264 $ 303,786 $ 282,841 $ 2,208,891 $ — $ 2,208,891

Product costs (2)

482,295 68,675 80,074 631,044 — 631,044

Other cost of sales (2)

147,177 47,508 47,742 242,427 60,352 302,779

Selling, general and administrative expenses 427,952 67,825 88,344 584,121 258,305 842,426

Income from operations $ 564,840 $ 119,778 $ 66,681 $ 751,299 $ ( 318,657 ) $ 432,642

Other income (expense), net 23,283

Income before income tax expense $ 455,925

Supplemental information:

Depreciation and amortization (3)

$ 44,326 $ 8,025 $ 6,506 $ 58,857 $ 36,902 $ 95,759

(1) Corporate includes centrally managed support functions including product design, raw material development, product innovation, sourcing, supply chain, and global merchandising which are included in other cost of sales.

Administrative corporate expenses include technology, brand and marketing, finance, human resources, legal, and other head office costs.

(2) Cost of goods sold is made up of product costs and other cost of sales.

Product costs include the cost of purchased merchandise, costs incurred to deliver inventory to the Company's distribution centers, shrink and inventory provision expenses, the cost of digital content subscription services, and hemming costs.

Other cost of sales includes occupancy and depreciation expense for company-operated stores, distribution center costs, and product department costs.

(3) The amounts of depreciation and amortization disclosed by reportable segment are included within other cost of sales and selling, general and administrative expenses.

Disaggregated Net Revenue

3 unchanged sentences

were disclosed as net revenue recognized within Canada.

Third Quarter First Three Quarters

2024 2023 2024 2023

First Quarter

(In thousands)

10 unchanged sentences

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

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

Third Quarter First Three Quarters

2024 2023 2024 2023

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

First Quarter

(In thousands)

Women's product $ 1,555,686 $ 1,433,927 $ 4,467,048 $ 4,139,082

Men's product 551,430 504,828 1,644,653 1,473,716

Other categories 289,544 265,463 864,928 801,377

Women's apparel $ 1,535,172 $ 1,435,241

Men's apparel 544,788 505,698

Accessories and other categories 290,700 267,952

$ 2,370,660 $ 2,208,891

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

Third Quarter First Three Quarters

2024 2023 2024 2023

First Quarter

(In thousands)

8 unchanged sentences

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

On July 12, 2024, lululemon and its subsidiary, lululemon usa inc., were named as defendants in a putative consumer class action ( Gyani v.

Lululemon Athletica Inc., et al., No.

1:24-cv-22651-BB) in the United States District Court for the Southern District of Florida.

The complaint asserts claims under the Florida Deceptive and Unfair Trade Practices Act and for unjust enrichment based on statements by the Company relating to the sustainability and environmental impact of the Company's products and actions during the period October 28, 2020 to present.

The complaint seeks monetary damages, as well as non-monetary relief such as an injunction to end the alleged unlawful practices.

The Company intends to defend the action vigorously.

On August 8, 2024, lululemon athletica inc.

2 unchanged sentences

1:24-cv-06033) in the United States District Court for the Southern District of New York.

The complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegedly false and misleading public statements and omissions by Defendants during the period December 7, 2023 to July 24, 2024 relating to lululemon's business, product offerings, and inventory allocation that Plaintiff alleges artificially inflated the Company’s stock price.

The complaint currently seeks unspecified monetary damages.

On March 10, 2025, plaintiffs filed an amended complaint, asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegedly false and misleading public statements and omissions by defendants during the period December 8, 2023 to July 24, 2024 relating to lululemon's business, product offerings, and inventory allocation that plaintiffs allege artificially inflated the Company’s stock price.

The amended complaint currently seeks unspecified monetary damages.

On May 19, 2025, defendants moved to dismiss the amended complaint.

The Company intends to defend the action vigorously.

On November 4, 2024, November 8, 2024, November 12, 2024, November 18, 2024, and November 20, 2024, stockholder derivative complaints were filed against certain of the Company's officers, and all of the Company's directors as of that date in the United States Court for the Southern District of New York:

Since November 4, 2024, six stockholder derivative complaints have been filed in the United States Court for the Southern District of New York:

McDonald et al.

1:24-cv-08405 (the " Bhavsar Action");

1:24-cv-08405;

McDonald et al.

1:24-cv-08507 (the " Muszynski Action");

1:24-cv-08507;

McDonald et al.

1:24-cv-08572 (the " Holtz Action");

1:24-cv-08572;

McDonald et al.

1:24-cv-08752 (the " Wong Action");

and Kanaly v.

McDonald et al , No.

1:24-cv-08839 (the " Kanaly Action," and collectively with the Bhavsar Action, the Muszynski Action, the Holtz Action, and the Wong Action, the "Derivative Actions.").

The Kanaly Action additionally names certain of the Company's former directors.

The Derivative Actions assert claims for (a) violating Sections 10(b), 14(a) and 20(a) of the Exchange Act, (b) breach of fiduciary duties, and (c) unjust enrichment and waste of corporate assets on allegations substantially similar to the allegations in the securities action complaint.

The Bhavsar Action further asserts claims for abuse of control, gross mismanagement, and contribution under Sections 10(b) and 21D of the Exchange Act.

The Wong Action also asserts a claim for contribution under Sections 10(b) and 21D of the Exchange Act.

The Kanaly Action also asserts claims for gross mismanagement and aiding and abetting breach of fiduciary duty.

The Wong Action and the Kanaly Action further bring claims based on allegedly false and misleading public statements and omissions during the period October 28, 2020 to March 21, 2024 relating to lululemon's "Inclusion, Diversity, Equity, and Action" program.

The complaints seek monetary damages, equitable relief, and attorneys' fees and costs on behalf of the company, as well as an order directing certain governance reforms.

1:24-cv-08752;

McDonald et al.

1:24-cv-08839;

and Wasserman v.

McDonald et al.

1:25-cv-02793 (collectively, the "Derivative Actions.").

The complaints in the Derivative Actions are generally based on the same allegations alleged in the securities action complaint and assert claims against certain of the Company’s current and former directors and officers for, among other things, alleged breaches of fiduciary duty and violations of Sections 10(b), 14(a), and 20(a) of the Exchange Act.

Certain of the Derivative Actions also assert claims based on alleged false and misleading statements during the period October 28, 2020 to April 25, 2024 relating to the Company’s "IDEA" program.

The complaints seek, among other things, monetary damages and equitable relief on behalf of the Company, as well as an award of attorneys’ fees and costs.

On May 15, 2025, plaintiff in Bhavsar v.

McDonald et al.

voluntarily dismissed the complaint and that action has been terminated.

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