10-K 0001397187-26-000020 (2026-03-17) vs 10-K 0001397187-25-000013 (2025-03-27)
| Section | Compared text | Words now | Changed |
|---|
| Risk Factors | Item 1A | 10,404 |
32.8% |
| MD&A | Item 7 | 5,801 |
40.2% |
| Legal Proceedings | Item 3, via Note 22 – Commitments and Contingencies | 801 |
46.4% |
| Accounting Policies | Item 8, Note 2 – Summary of Significant Accounting Policies | 4,619 |
10.3% |
The redline: what was cut and what was added
In each section, the paragraph that changed most, marked against last year's 10-K:
cut words struck through, new words highlighted and underlined.
Legal Proceedings 337 words changed in this paragraph; it is 38% similar to last year's version.
On Since November 4, 2024, November 8, 2024, November 12, 2024, November 18, 2024, and November 20, 2024, six stockholder derivative complaints were have been 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: Bhavsar v. McDonald et al., No. 1:24-cv-08405 (the "Bhavsar Action"); 1:24-cv-08405; Muszynski v. McDonald et al., No. 1:24-cv-08507 (the "Muszynski Action"); 1:24-cv-08507; Holtz v. McDonald et al., No. 1:24-cv-08572 (the "Holtz Action"); 1:24-cv-08572; Wong v. McDonald et al., No. 1:24-cv-08752 (the "Wong Action"); and 1:24-cv-08752; Kanaly v. McDonald et al, al., No. 1:24-cv-08839 (the "Kanaly Action," 1:24-cv-08839; and collectively with the Bhavsar Action, the Muszynski Action, the Holtz Action, and the Wong Action, Wasserman v. McDonald et al., No. 1:25-cv-02793 (collectively, the "Derivative Actions."). The Kanaly Action additionally names 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 Company’s current and former directors. The Derivative Actions assert claims for (a) violating directors and officers for, among other things, alleged breaches of fiduciary duty and violations of Sections 10(b), 14(a) 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 Act. Certain of the Exchange Act. The Wong Action Derivative Actions 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 assert claims based on allegedly alleged false and misleading public statements and omissions during the period October 28, 2020 to March 21, April 25, 2024 relating to lululemon's the Company’s "IDEA" program. The complaints seek seek, among other things, monetary damages, damages and equitable relief, and attorneys' fees and costs relief on behalf of the Company, as well as an order directing certain governance reforms. 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. On August 1, 2025, the Derivative Actions were consolidated for all purposes under the caption In re lululemon athletica inc. Stockholder Derivative Litigation, Master File No. 1:24-cv-08507. The Derivative Actions are stayed pending a ruling on the motion to dismiss the securities class action.
Source: Item 3, via Note 22 – Commitments and Contingencies, 10-K 0001397187-26-000020 vs Item 3, via Note 21 – Commitments and Contingencies, 10-K 0001397187-25-000013
Risk Factors 220 words changed in this paragraph; it is 40% similar to last year's version.
Current economic and political conditions make tax rules in any jurisdiction, including the United States and Canada, jurisdiction subject to significant change. Changes in applicable U.S., Canadian, Chinese, or other international tax laws and regulations, or their interpretation and application, interpretation, including the possibility of retroactive effect, could affect our income tax expense and profitability, as they did in fiscal 2017 and fiscal 2018 upon passage profitability. On July 4, 2025, the U.S. passed the One Big Beautiful Bill Act ("OBBBA"), which includes the permanent extension of certain provisions of the U.S. Tax Cuts and Jobs Act, Act of 2017, the immediate expensing of domestic research and in 2020 with experimental expenditures, the passage reinstatement of accelerated depreciation for qualified property, and modifications to the Coronavirus Aid, Relief, international tax provisions including changes to the global intangible low-tax income ("GILTI"), the foreign-derived intangible income ("FDII") and Economic Security Act. Certain provisions of the Inflation Reduction Act passed in 2022, including a 15% corporate alternative minimum tax, as well as the similar 15% global minimum base erosion and anti-abuse tax under ("BEAT") provisions. On January 5, 2026, the Organization for Economic Cooperation and Development's Development ("OECD") released administrative guidance containing a Side-by-Side ("SbS") system which modifies the operation of the OECD's Pillar Two Global Anti-Base Erosion Rules, ("GloBE") Model Rules. The SbS system provides a safe harbor for multinational enterprise ("MNE") groups with an ultimate parent entity in the US, which will exempt a US headquartered MNE group from the application of two of the three Pillar Two top-up taxes. We are currently evaluating the impact of these tax law changes on our financial statements and they may impact our income tax expense, profitability, and capital allocation decisions in the future. decisions.
Source: Item 1A, 10-K 0001397187-26-000020 vs Item 1A, 10-K 0001397187-25-000013
MD&A 138 words changed in this paragraph; it is 40% similar to last year's version.
The increase in Americas net revenue was primarily due to a $263.5 $121.4 million increase in net revenue from new or expanded company-operated stores and our other channels. channels, including from an increased number of locations operated by third parties under license and supply arrangements. We added 24 have opened nine net new company-operated stores since 2024. The increase in the Americas since 2023, including 14 company-operated stores from the acquisition net revenue was also driven by an increase in comparable sales, which increased 9%, or 7% on a constant dollar basis. The increase in comparable sales was primarily a result of the Mexico operations. Americas net higher traffic, partially offset by lower conversion rates and a decrease in average order value. Net revenue during the 53rd week of 2024 was $118.0 $21.7 million, which contributed to partially offset the increase in Americas net revenue in 2024. Americas comparable sales, which excludes net revenue from the 53rd week of 2024, decreased 1%. The decrease in comparable sales was primarily a result of decreased conversion rates, partially offset by an increase in traffic and a higher dollar value per transaction. revenue.
Source: Item 7, 10-K 0001397187-26-000020 vs Item 7, 10-K 0001397187-25-000013
Accounting Policies 126 words changed in this paragraph; it is 32% similar to last year's version.
The grant date fair value of each stock option granted is estimated on the date of grant date using the Black-Scholes model. The grant date fair value of restricted shares, performance-based restricted stock units, and restricted stock units is based on the closing price of the Company's common stock on the grant date. date is used in the model. The assumptions used to calculate the fair value of the options granted are evaluated and revised, as necessary, to reflect market conditions and the Company's historical experience. The expected term of the options is based upon the historical experience of similar awards, giving consideration to expectations of future exercise behavior. Expected volatility is based upon the historical volatility of the Company's common stock for the period corresponding with the expected term of the options. The risk-free interest rate is based on the U.S. Treasury yield curve for the period corresponding with the expected term of the options.
Source: Item 8, Note 2 – Summary of Significant Accounting Policies, 10-K 0001397187-26-000020 vs Item 8, Note 2 – Summary of Significant Accounting Policies, 10-K 0001397187-25-000013
Every change, by type
Sentences and paragraphs of LULU's Risk Factors and MD&A, 10-K 2026-03-17 against 10-K 2025-03-27.
Each links to the text at sec.gov.
Quiet changes are sentences kept from last year with one to four words changed, at least one of them a hedge, a modal or a qualifier
(may, could, will, not, significant, material…). A year or date rolling forward is not counted.
The full word list
adverse, adversely, all, although, anticipate, anticipates, any, approximately, believe, believes, can, cannot, certain, could, expect, expects, generally, however, if, intend, intends, largely, likely, many, material, materially, may, might, most, must, never, no, not, possible, primarily, probable, should, significant, significantly, some, substantial, substantially, unlikely, will, would
AddedRisk Factors
Our Chief Executive Officer stepped down effective January 31, 2026, and we appointed interim co-Chief Executive Officers to lead during a transition period while we conduct a search for a permanent Chief Executive Officer. In addition, we have had other recent changes at the senior executive level. These changes may create uncertainty and divert management’s attention and resources. We may not identify or attract a permanent successor on a timely basis, and a prolonged search could extend uncertainty and heighten the risks described in this paragraph. Our interim leadership model may not align with expectations of employees, vendor partners, or other external stakeholders, and could negatively affect our operations, strategic initiatives, employee engagement, and retention. These changes may also lead to negative public perception, including among consumers and our brand community. Any resulting disruption could have a material adverse impact on our business, financial performance, or the market price of our stock.
Read it in 10-K 2026-03-17 at sec.gov ↗
AddedRisk Factors
Changes to U.S. tariff and customs policy, including the elimination of the de minimis exemption, have and may further materially increase product costs and negatively affect margins.
Read it in 10-K 2026-03-17 at sec.gov ↗
AddedRisk Factors
As a result of the increased tariffs since April 2025, the cost of inventory in the United States has increased. The United States also eliminated the de minimis duty-free exemption for certain shipments effective May 2, 2025, and an Executive Order extends this elimination globally beginning August 29, 2025, with legislation enacted to repeal the statutory exemption entirely by July 1, 2027. The countries from which we source the majority of our products are now subject to higher tariffs on imports into the United States. Further, the majority of our sales to U.S. e-commerce guests are currently fulfilled from distribution centers in Canada, and historically a significant proportion of these orders qualified for the de minimis exemption. The removal of this exemption increases the cost of fulfilling those orders. As a result, more shipments are now subject to duties, taxes, and customs procedures, which increased product costs during 2025, and which we expect to continue into 2026 and beyond. We are taking steps designed to mitigate some of the financial impact, although we expect the tariff and de minimis changes to adversely affect product costs, gross profit, and income from operations. On February 20, 2026, the U.S. Supreme Court invalidated tariffs imposed under the International Emergency Economic Power Act and immediately after, the U.S. Administration initiated new tariffs at different rates under alternative legislative powers, which increases the uncertainty around tariffs.
Read it in 10-K 2026-03-17 at sec.gov ↗
AddedRisk Factors
There has been significant volatility in U.S. tariff and customs policy recently, with frequent changes in rates, sudden elimination or reinstatement of exemptions, shifts in implementation dates, and reversals of prior actions. In addition, there is uncertainty around how tariff rules will be applied to goods routed through third countries (transshipment) and potential changes to the valuation methodology used to calculate duty, including the first sale declaration program in the United States. Changes in tariff and customs policy and legislation could affect the level of duties imposed and our overall product costs. This volatility makes it more difficult to forecast costs, plan our global supply chain, and provide reliable financial guidance. Policy changes often require rapid operational adjustments that can increase costs and reduce efficiency. Announcements of tariff and custom changes, as well as our disclosures of their potential impacts, have at times contributed to fluctuations in our stock price. We expect such volatility and uncertainty to continue, posing ongoing challenges to our operations, financial planning, and investor communications.
Read it in 10-K 2026-03-17 at sec.gov ↗
AddedRisk Factors
Macroeconomic volatility, inflationary pressures, and shifts in consumer sentiment may reduce demand for our products.
Read it in 10-K 2026-03-17 at sec.gov ↗
AddedRisk Factors
Our performance depends on consumers’ willingness and ability to purchase discretionary products. That willingness can be affected by general economic conditions and uncertainty regarding the overall future environment, tariffs, inflation, changes in interest rates, foreign exchange fluctuations, energy and fuel costs, employment levels, consumer debt, housing market trends, commodity price volatility, and tax policy changes. Geopolitical instability, public health crises, and other macroeconomic events can also weaken consumer confidence. In 2025, we experienced lower store traffic in the Americas, partially reflective of inflationary pressures and economic uncertainty weighing on discretionary spending. Prolonged or worsening macroeconomic volatility could reduce demand, impair our ability to achieve growth targets, and materially impact our net revenue, margins, and cash flows.
Read it in 10-K 2026-03-17 at sec.gov ↗
AddedRisk Factors
Global political and economic instability, including geopolitical conflicts and political polarization, could disrupt our operations and increase costs.
Read it in 10-K 2026-03-17 at sec.gov ↗
AddedRisk Factors
We operate and source products across multiple international markets, and our ability to manage a global supply chain depends on stable economic and political conditions. Global instability, trade disputes, changes in customs treatment including de minimis thresholds, alterations in duty or tariff levels, sanctions, embargoes, or other governmental actions may increase costs, lengthen lead times, or require us to adjust sourcing or distribution strategies. Legislation such as the Uyghur Forced Labor Prevention Act, and similar measures in other jurisdictions, increases compliance obligations, supply chain due diligence requirements, and the risk of shipment delays or detentions. If additional trade restrictions or compliance requirements are enacted, or enforcement becomes more stringent, our sourcing, importation, and delivery capabilities could
Read it in 10-K 2026-03-17 at sec.gov ↗
AddedRisk Factors
be materially affected, resulting in increased costs and operational disruptions. In addition, heightened geopolitical tensions, including potential conflicts involving Taiwan or other regions where our suppliers are concentrated, could disrupt our supply of raw materials and finished goods. A significant portion of our technical fabrics originates from Taiwan, and any military conflict, trade embargo, or disruption affecting that region could materially impact our ability to source materials and fulfill customer orders. Political polarization in the United States has also led to increased consumer activism, brand boycotts, and public pressure campaigns targeting companies based on their perceived political or social positions. Whether or not we take public positions on social or political issues, we could face reputational harm, reduced consumer demand, or employee relations challenges if we are perceived as aligned or misaligned with particular viewpoints. These dynamics could adversely affect our brand, guest relationships, and results of operations.
Read it in 10-K 2026-03-17 at sec.gov ↗
AddedRisk Factors
Trade restrictions, tariffs, and customs changes could disrupt our supply chain and compress margins.
Read it in 10-K 2026-03-17 at sec.gov ↗
AddedRisk Factors
Our business depends on the efficient, predictable, and cost-effective movement of goods across borders. Governments may impose new tariffs, duties, quotas, customs regulations, or other trade restrictions, or modify the application of existing measures, including reductions in de minimis thresholds, new compliance requirements, or changes in enforcement priorities. These developments can increase product costs, delay shipments, disrupt sourcing, or require changes to our supply chain. If we are unable to offset these impacts through pricing, sourcing adjustments, or other measures, our margins, operational efficiency, and customer satisfaction could be adversely affected. Any price increases intended to offset these added costs could reduce consumer demand and negatively impact net revenue. Trade policy volatility, including frequent changes in rates, sudden elimination or reinstatement of exemptions, shifts in implementation dates, and uncertainty around transshipment rules, makes it more difficult to forecast costs, plan our global supply chain, and provide reliable financial guidance.
Read it in 10-K 2026-03-17 at sec.gov ↗
AddedRisk Factors
negatively affect employee availability. Health events may also cause long-term changes to consumer shopping behavior, preferences, and demand for our products.
Read it in 10-K 2026-03-17 at sec.gov ↗
RemovedRisk Factors
are injured. Even if injuries are not the result of any defects, if they are perceived to be, we may incur expenses to defend or settle any claims and our brand and reputation may be harmed.
Read it in 10-K 2025-03-27 at sec.gov ↗
RemovedRisk Factors
We also lease the majority of our distribution centers and our inability to secure appropriate real estate or lease terms could impact our ability to deliver our products to the market.
Read it in 10-K 2025-03-27 at sec.gov ↗
RemovedRisk Factors
In addition, the increased use of employee-owned devices for communications as well as work-from-home arrangements present additional operational risks to our technology systems, including increased risks of cyber-attacks. Further, like other companies in the retail industry, we have in the past experienced, and we expect to continue to experience, cyber-attacks, including phishing, and other attempts to breach, or gain unauthorized access to, our systems. To date, these attacks have not had a material impact on our operations, but they may have a material impact in the future.
Read it in 10-K 2025-03-27 at sec.gov ↗
RemovedRisk Factors
We rely on international suppliers and any significant disruption to our supply chain could impair our ability to procure or distribute our products.
Read it in 10-K 2025-03-27 at sec.gov ↗
RemovedRisk Factors
for silver and our cotton yarn and cotton-based textiles, could have a material adverse effect on our cost of goods sold, results of operations, financial condition, and cash flows.
Read it in 10-K 2025-03-27 at sec.gov ↗
RemovedRisk Factors
Increasing labor costs and other factors associated with the production of our products in South Asia and South East Asia could increase the costs to produce our products.
Read it in 10-K 2025-03-27 at sec.gov ↗
RemovedRisk Factors
There is increasing concern that a gradual rise in global average temperatures due to increased concentration of carbon dioxide and other greenhouse gases in the atmosphere will cause significant changes in weather patterns around the globe, an increase in the frequency, severity, and duration of extreme weather conditions and natural disasters, and water scarcity and poor water quality. These events could adversely impact the cultivation of cotton, which is a key resource in the production of our products, disrupt the operation of our supply chain and the productivity of our contract manufacturers, increase our production costs, impose capacity restraints and impact the types of apparel products that consumers purchase. These events could also compound adverse economic conditions and impact consumer confidence and discretionary spending. As a result, the effects of climate change could have a long-term adverse impact on our business and results of operations. In many countries, governmental bodies are enacting new or additional legislation and regulations to reduce or mitigate the potential impacts of climate change. If we, our suppliers, or our contract manufacturers are required to comply with these laws and regulations, or if we choose to take voluntary steps to reduce or mitigate our impact on climate change, we may experience increased costs for energy, production, transportation, and raw materials, increased capital expenditures, or increased insurance premiums and deductibles, which could adversely impact our operations. Inconsistency of legislation and regulations among jurisdictions may also affect the costs of compliance with such laws and regulations. Any assessment of the potential impact of future climate change legislation, regulations or industry standards, as well as any international treaties and accords, is uncertain given the wide scope of potential regulatory change in the countries in which we operate.
Read it in 10-K 2025-03-27 at sec.gov ↗
RemovedRisk Factors
Increased scrutiny from investors and others regarding our environmental, social, governance, or sustainability responsibilities could result in additional costs or risks and adversely impact our reputation, employee retention, and willingness of customers and suppliers to do business with us.
Read it in 10-K 2025-03-27 at sec.gov ↗
RemovedRisk Factors
Investor and political advocacy groups, certain institutional investors, investment funds, other market participants, stockholders, and customers have focused increasingly on the environmental, social and governance ("ESG") practices of companies, including those associated with climate change and social responsibility. These parties have placed increased importance on the implications of the social cost of their investments and disclosure of their ESG practices. If our ESG practices do not meet customer, investor, employee, or other stakeholder expectations or do not align with their opinions or values, our brand, reputation, employee retention, and business may be negatively impacted. Any sustainability or impact report that we publish or other ESG disclosures we make may include our policies, practices, goals, and targets on a variety of social and ethical matters, including corporate governance, environmental compliance, employee health and safety practices,
Read it in 10-K 2025-03-27 at sec.gov ↗
RemovedRisk Factors
human capital management, product quality, supply chain management, and workforce inclusion and composition. It is possible that stakeholders may not be satisfied with our ESG policies, practices, goals, or targets, including how we describe and report our ESG goals, efforts, and practices, and this could reduce demand for our products or lead to regulatory enforcement that could restrict our ability to market and sell our products. We could also incur additional costs and require additional resources to monitor, report, and comply with various ESG practices. Also, our failure, or perceived failure, to meet the goals or targets included in any sustainability disclosure could negatively impact our reputation, employee retention, and the willingness of our customers and suppliers to do business with us.
Read it in 10-K 2025-03-27 at sec.gov ↗
RemovedRisk Factors
An economic recession, depression, downturn, periods of inflation, or economic uncertainty in our key markets may adversely affect consumer discretionary spending and demand for our products.
Read it in 10-K 2025-03-27 at sec.gov ↗
RemovedRisk Factors
Many of our products may be considered discretionary items for consumers. Some of the factors that may influence consumer spending on discretionary items include general economic conditions, high levels of unemployment, pandemics, higher consumer debt levels, reductions in net worth based on market declines and uncertainty, home foreclosures and reductions in home values, fluctuating interest and foreign currency exchange rates and credit availability, government austerity measures, fluctuating fuel and other energy costs, fluctuating commodity prices, inflationary pressure, tax rates and general uncertainty regarding the overall future economic environment. Global economic conditions are uncertain and volatile, due in part to the potential impacts of increasing inflation, the potential impacts of geopolitical uncertainties, and any potential sanctions, restrictions or responses to those conditions. For example, the PRC market presents a number of risks, including changes in laws and regulations, currency fluctuations, increased competition, and changes in economic conditions, including the risk of an economic downturn or recession, trade embargoes, restrictions or other barriers, as well as other conditions that may adversely impact consumer spending, any of which could cause us to fail to achieve anticipated growth. As global economic conditions continue to be volatile or economic uncertainty remains, trends in consumer discretionary spending also remain unpredictable and subject to reductions due to credit constraints and uncertainties about the future. Unfavorable economic conditions may lead consumers to delay or reduce purchases of our products. Consumer demand for our products may not reach our targets, or may decline, when there is an economic downturn or economic uncertainty in our key markets. Our sensitivity to economic cycles and any related fluctuation in consumer demand may have a material adverse effect on our financial condition.
Read it in 10-K 2025-03-27 at sec.gov ↗
RewordedRisk Factors
Our brand and reputation could be adversely affected if we fail to achieve these objectives, if our public image was to be tarnished by negative publicity, which could be amplified by social media, if we fail to deliver innovative and high quality high-quality products acceptable to our guests, or if we face or mishandle a product recall. recall, which could be amplified by social media.
Read it in 10-K 2026-03-17 at sec.gov ↗
RewordedRisk Factors
We are increasingly using Many of our customers shop through our e-commerce websites and mobile apps and we use social media in addition to these websites and proprietary mobile apps to interact with our customers and as a means to enhance their shopping experience.
Read it in 10-K 2026-03-17 at sec.gov ↗
RewordedRisk Factors
Also, the loss of services of any of these key individuals, or any negative public perception with respect to these individuals, may be disruptive to, or cause uncertainty in, our business and could have a negative impact on our ability to manage and grow our business effectively.
Read it in 10-K 2026-03-17 at sec.gov ↗
RewordedRisk Factors
The occurrence or resurgence of global or regional public health events crises, such as the COVID-19 pandemic, pandemics or epidemics, and the related governmental, governmental and private sector and individual consumer responses, could contribute to a recession, depression, or global economic downturn, reduce store traffic and consumer spending, result in temporary or permanent closures of retail locations, offices, and factories, and could negatively impact the flow of goods.
Read it in 10-K 2026-03-17 at sec.gov ↗
RewordedRisk Factors
Data and security breaches can also occur as a result of non-technical issues including intentional or inadvertent breach breach, including by misusing AI, by employees or persons with whom we have commercial relationships that result in the unauthorized release or use of personal or confidential information. information, and we may in some cases be held responsible for such incidents under evolving privacy laws.
Read it in 10-K 2026-03-17 at sec.gov ↗
RewordedRisk Factors
A significant privacy breach or failure or perceived failure by us or our third-party service providers to comply with privacy or data protection these laws, regulations, policies or regulatory guidance might have a materially adverse impact on our reputation, business operations and our financial condition or results of operations. may
Read it in 10-K 2026-03-17 at sec.gov ↗
RewordedRisk Factors
Any defects could make our products and services unsafe and create a risk of environmental or property damage or personal injury and we may become subject to the hazards and uncertainties of product liability claims and related litigation. injury.
Read it in 10-K 2026-03-17 at sec.gov ↗
RewordedRisk Factors
Changes in applicable U.S., Canadian, Chinese, or other international tax laws and regulations, or their interpretation and application, interpretation, including the possibility of retroactive effect, could affect our income tax expense and profitability, as they did in fiscal 2017 and fiscal 2018 upon passage of the U.S. profitability.
Read it in 10-K 2026-03-17 at sec.gov ↗
RewordedRisk Factors
If we are unable to introduce new products or novel technologies in on a timely manner basis, or if our new products or technologies offerings are not accepted by our guests, our competitors may introduce similar products in a more timely fashion, quickly, which could hurt undermine our goal to be viewed as a leader in technical athletic apparel innovation.
Read it in 10-K 2026-03-17 at sec.gov ↗
RewordedRisk Factors
Our business is subject to significant pressure on costs and pricing caused by many factors, including tariffs, intense competition, constrained sourcing capacity and related capacity, inflationary pressure, the availability of qualified labor and wage inflation, pricing pressure from consumers to reduce the prices we charge for our products, consumers, and changes in consumer demand.
Read it in 10-K 2026-03-17 at sec.gov ↗
RewordedRisk Factors
We lease the majority of our stores under operating leases and many of our distribution centers, and our inability to secure appropriate real estate or lease terms could impact our operations or ability to grow. deliver our products to the market.
Read it in 10-K 2026-03-17 at sec.gov ↗
RewordedRisk Factors
At the end of 2020, our Our bilateral Advance Pricing Arrangement ("APA") with the Internal Revenue Service ("IRS") and the Canada Revenue Agency expired. ("CRA") expired at the end of 2020.
Read it in 10-K 2026-03-17 at sec.gov ↗
Quiet changesRisk Factors
Our future success is substantially dependent on the service of our senior management and our ability to maintain our culture and to attract, manage, and retain highly qualified individuals.
Read it in 10-K 2026-03-17 at sec.gov ↗
Quiet changesRisk Factors
These difficulties could result in the erosion of our brand image which could have and a material adverse effect on our financial condition.
Read it in 10-K 2026-03-17 at sec.gov ↗
Quiet changesRisk Factors
We rely on our distribution facilities for substantially all of our product distribution.
Read it in 10-K 2026-03-17 at sec.gov ↗
AddedMD&A
In 2025, we delivered net revenue growth of 5%, with a 22% increase in our international regions offsetting a decrease of 1% in the Americas. Our international revenue growth was driven by a 29% increase in China Mainland, and a 16% increase in Rest of World.
Read it in 10-K 2026-03-17 at sec.gov ↗
AddedMD&A
Operating margin decreased 380 basis points and diluted earnings per share decreased by 9%, mainly due to the impact from increased tariff rates in the United States, and the removal of the de minimis provision. We have taken mitigating actions, including selective price increases and vendor negotiations; however, we do not expect these actions to fully offset these incremental costs, and we believe tariffs and de minimis changes will continue to adversely affect gross margin and income from operations in 2026. See "Import Tariffs" below for additional information.
Read it in 10-K 2026-03-17 at sec.gov ↗
AddedMD&A
We have experienced declining revenue trends in North America and have developed an action plan to drive improvement in this region, while maintaining revenue growth in our international businesses. Our action plan is structured around three strategic pillars: product creation, product activation, and enterprise efficiency.
Read it in 10-K 2026-03-17 at sec.gov ↗
AddedMD&A
The goal of our Product Creation pillar is to ensure we deliver the product that our guests expect from lululemon. We are leveraging our Science of Feel principles across our performance and lifestyle assortments. Work streams within this pillar include:
Read it in 10-K 2026-03-17 at sec.gov ↗
AddedMD&A
•Increasing the frequency and breadth of new styles. In 2025 new styles included Daydrift, Be Calm, Big Cozy, and Mile Maker. We are working to reinvigorate several of our key franchises including Scuba, Dance Studio, and ABC, while also maintaining a strong pipeline of new innovations across our performance offering.
Read it in 10-K 2026-03-17 at sec.gov ↗
AddedMD&A
•Improving our speed to market. We are executing initiatives intended to reduce our product development timelines, which we believe may support more timely introduction of new styles and innovation. In addition, we have been enhancing our chase capabilities, with the objective of enabling more responsive replenishment of select strong‑performing styles.
Read it in 10-K 2026-03-17 at sec.gov ↗
AddedMD&A
The aim of the Product Activation pillar is to ensure we are bringing our product to life for our guest in new and compelling ways across all channels. Work streams within this pillar include:
Read it in 10-K 2026-03-17 at sec.gov ↗
AddedMD&A
•Improving the in-store experience by maximizing the impact of our assortments through individual item count reduction, improving in-store storytelling by shifting product adjacencies, and enhancing visual merchandising.
Read it in 10-K 2026-03-17 at sec.gov ↗
AddedMD&A
•Improving the digital experience through continued enhancements to our website to elevate the guest experience and improve storytelling with the goal to increase conversion.
Read it in 10-K 2026-03-17 at sec.gov ↗
AddedMD&A
•Continued investment in integrated marketing with a plan focused on driving awareness and excitement for product newness and innovation across our performance and lifestyle assortments. We are leveraging our ambassadors as well as carefully sourced creators, with a focus on engaging guests through social channels and community activations.
Read it in 10-K 2026-03-17 at sec.gov ↗
AddedMD&A
We continue to take actions in both the near and longer term to ensure we are operating as efficiently as possible. These actions help mitigate the cost of increased tariffs and current revenue trends in the Americas. These include enterprise-wide operating efficiency and cost-saving initiatives, selective price increases, and supply chain initiatives.
Read it in 10-K 2026-03-17 at sec.gov ↗
AddedMD&A
Net revenue in the Americas decreased 1% and comparable sales in the Americas decreased 3%. We experienced lower conversion rates, store traffic, and average order value in the Americas, partially reflective of certain product categories, including core categories, experiencing lower demand. The decline in Americas comparable sales also contributed to a decline in global sales per square foot. We experienced a decrease in product margin in the Americas segment of 340 basis points, primarily reflective of the impact of tariffs and increased markdowns. We have initiated an action plan to drive sustainable net revenue growth in the Americas, as outlined in the overview section, which includes a plan to reduce the percentage of markdowns on our products.
Read it in 10-K 2026-03-17 at sec.gov ↗
RemovedMD&A
Fiscal 2024 was another year of growth for lululemon. Net revenue increased 10%, operating margin expanded 150 basis points, or 50 basis points on an adjusted basis, and diluted earnings per share grew 20%, or 15% on an adjusted basis. Our teams continued to execute against our Power of Three ×2 growth plan and the compound annual growth rate in net revenue was 19% between fiscal 2021 and 2024.
Read it in 10-K 2025-03-27 at sec.gov ↗
RemovedMD&A
supply partner in September 2024. Company-operated store net revenue increased 14% and e-commerce net revenue increased 6%.
Read it in 10-K 2025-03-27 at sec.gov ↗
RemovedMD&A
Deepening our relationship with existing guests while also bringing new guests into the lululemon brand remains an important priority for us. We believe our unaided brand awareness is relatively low across most of the regions where we operate. In 2024, we brought several activations to life aimed at increasing loyalty with existing guests while, at the same time, attracting new guests into our brand.
Read it in 10-K 2025-03-27 at sec.gov ↗
RemovedMD&A
Our partnership with the Canadian Olympic Committee and Canadian Paralympic Committee was on full display during the Paris Olympics, as we outfitted the athletes for their off-field activities. In the Americas, we continued to grow our membership program and began offering new benefits including our Partner Perks program which provides members with exclusive experiences and perks from select partner brands.
Read it in 10-K 2025-03-27 at sec.gov ↗
RemovedMD&A
In China Mainland, we expanded our Summer Sweat Games to over 70 stores across nearly 40 cities and for World Mental Health Day, we hosted activities in nine cities across China Mainland, anchored by our event along the West Bund in Shanghai. We also extended our World Mental Health Day activations to additional countries, including South Korea, Germany, the United Kingdom, and the United States.
Read it in 10-K 2025-03-27 at sec.gov ↗
RemovedMD&A
In 2024, we also welcomed additional new ambassadors to the brand, including six-time PGA tour winner Max Homa, Chinese director, actress, and screenwriter Jia Ling, and Frances Tiafoe our newest tennis ambassador.
Read it in 10-K 2025-03-27 at sec.gov ↗
RemovedMD&A
We continue to seek to create product that solves the unmet needs of our guests. We believe our technical product is a key competitive advantage for us, and our positioning as a premium athletic brand, with high style and high performance product, helps differentiate us from our peers.
Read it in 10-K 2025-03-27 at sec.gov ↗
RemovedMD&A
In 2024, we remained focused on our core activities of yoga, run, and train and also our newer "play" activities including golf and tennis. In women's, Align, Define, and Scuba continued to be key product franchises for us, and towards the end of the year, we launched our Daydrift trouser; a refined, casual pant to be worn all day into night. For men, guests continued to respond to our lounge franchises including Steady State, Soft Jersey, and Smooth Spacer, and our performance franchises including Pacebreaker and Zeroed In. In footwear, we expanded our offering with new casual and performance styles including our first collection for men. And in accessories, we continued to bring innovation across our offering of bags, which drove good response from our guests.
Read it in 10-K 2025-03-27 at sec.gov ↗
RemovedMD&A
The summary below compares 2024 to 2023 and provides both GAAP and non-GAAP financial measures. The adjusted financial measures for 2023 exclude $72.1 million of post-tax asset impairment and other charges recognized in relation to lululemon Studio. There were no adjusted financial measures for 2024.
Read it in 10-K 2025-03-27 at sec.gov ↗
RemovedMD&A
•Net revenue increased 10% to $10.6 billion. On a constant dollar basis, net revenue increased 11%.
Read it in 10-K 2025-03-27 at sec.gov ↗
RemovedMD&A
•Comparable sales, which excludes net revenue from the 53rd week of 2024, increased 4%.
Read it in 10-K 2025-03-27 at sec.gov ↗
RemovedMD&A
•Gross profit increased 12% to $6.3 billion. Adjusted gross profit increased 11%.
Read it in 10-K 2025-03-27 at sec.gov ↗
RewordedMD&A
The increase decrease in cash used in investing activities was also due to increased decreased capital expenditures primarily due to an increase in supply chain infrastructure, company-operated stores expenditures, and system initiatives, partially offset by a decrease in corporate and supply chain related infrastructure capital expenditures. expenditures, partially offset by an increase in capital expenditures for opening, remodeling, and relocating company-operated stores, primarily in the Americas and China Mainland.
Read it in 10-K 2026-03-17 at sec.gov ↗
RewordedMD&A
The decrease in cash provided by operating activities was also a result of changes in impairment and other charges recognized in relation to lululemon Studio in 2023, decreased deferred income taxes and lower stock-based compensation expense, partially offset by increased depreciation and higher cash inflows related to derivatives, partially offset by increased deferred incomes taxes and depreciation. derivatives.
Read it in 10-K 2026-03-17 at sec.gov ↗
RewordedMD&A
The decrease in cash provided by operating activities was primarily as a result of a decrease in cash flows from changes in operating assets and liabilities of $251.1 $357.5 million, primarily driven by changes in the timing of income tax payments due to timing of foreign tax installment payments, accounts payable, inventories, accrued compensation, receivable, and other assets, inventory purchases, partially offset by the timing of accounts payable and changes in income taxes and accrued liabilities. compensation.
Read it in 10-K 2026-03-17 at sec.gov ↗
RewordedMD&A
We Over the course of 2025, we repurchased 5.1 5.0 million shares for $1.6 billion $1.2 billion, and in 2024, and December 2025, our board of directors approved increases in a $1.0 billion increase to our stock repurchase authorization totaling $2.0 billion during 2024. authorization.
Read it in 10-K 2026-03-17 at sec.gov ↗
RewordedMD&A
The increase in China Mainland net revenue was also driven by primarily due to a $156.5 $121.4 million increase in in net revenue from new or expanded company-operated stores and our other channels. channels, including from an increased number of locations operated by third parties under license and supply arrangements.
Read it in 10-K 2026-03-17 at sec.gov ↗
RewordedMD&A
Corporate The increase in corporate expenses also decreased is primarily due to an increase in net foreign currency exchange and derivative gains revaluation losses of $9.9 million, $32.1 million and higher technology costs, as well as a decrease in employee higher depreciation costs.
Read it in 10-K 2026-03-17 at sec.gov ↗
RewordedMD&A
The increase decrease in gross margin was primarily due to higher lower product margin driven by higher tariffs and increased markdowns, as well as leverage on higher occupancy and other costs. costs as a percentage of net revenue.
Read it in 10-K 2026-03-17 at sec.gov ↗
RewordedMD&A
The decrease in gross margin was primarily due to deleverage on lower product margin and higher distribution center and occupancy costs, partially offset by higher product margin. costs as a percentage of net revenue.
Read it in 10-K 2026-03-17 at sec.gov ↗
RewordedMD&A
The increase in selling, general and administrative expenses was primarily due to higher employee costs and increased marketing expenses, costs, as well as increased distribution costs higher marketing expenses and packaging costs driven by higher net revenue. variable costs.
Read it in 10-K 2026-03-17 at sec.gov ↗
RewordedMD&A
Such These factors have had varying effects across our markets and are expected to continue to impact our business throughout 2025, with the impact varying by market. 2026 and beyond.
Read it in 10-K 2026-03-17 at sec.gov ↗
RewordedMD&A
We provide use constant dollar changes in our results metrics to help investors understand the facilitate comparison of underlying growth rate of net revenue performance excluding the impact of changes in foreign currency exchange rates.
Read it in 10-K 2026-03-17 at sec.gov ↗
RewordedMD&A
The increase in gross margin was primarily due to higher product margin as well as leverage on lower occupancy and other costs. depreciation costs as a percentage of net revenue.
Read it in 10-K 2026-03-17 at sec.gov ↗
Quiet changesMD&A
On a segment basis, we determine income from operations without taking into account corporate expenses and certain other expenses.
Read it in 10-K 2026-03-17 at sec.gov ↗
Quiet changesMD&A
Company-operated stores acquired as a result of the acquisition of the Mexico operations will be were considered comparable beginning October 2025, after 12 full fiscal months of sales from the date of acquisition.
Read it in 10-K 2026-03-17 at sec.gov ↗
