lululemon athletica inc. (NASDAQ:LULU)

Net operating profit after taxes (NOPAT)

The net operating profit after taxes shows an overall upward trend from 711,860 thousand USD in 2020 to 1,928,398 thousand USD in 2025. There was a slight decline from 2020 to 2021, followed by a significant increase in 2022. In 2023, NOPAT decreased but then experienced strong growth in 2024 and continued rising into 2025, reaching the highest value in the observed period.

Cost of capital

The cost of capital remained relatively stable throughout the years, fluctuating mildly between 16.07% and 16.29%. There is no significant upward or downward trend, indicating consistent capital costs for the company during the period analyzed.

Invested capital

Invested capital increased steadily from 3,008,240 thousand USD in 2020 to 6,507,336 thousand USD in 2025. This demonstrates continuous growth in the company's investment base, with the most notable increase occurring between 2023 and 2024, where the invested capital rose by over 1.4 million thousand USD.

Economic profit

Economic profit exhibited volatility with initial values of 225,258 thousand USD in 2020 and a sharp decline to 81,770 thousand USD in 2021. Afterwards, it rebounded markedly in 2022 to 404,203 thousand USD before falling again in 2023 to 200,660 thousand USD. From 2024 onwards, economic profit showed a robust increase, peaking at 882,728 thousand USD in 2025, indicating improved value creation exceeding the cost of capital in the later years.

Net Income

The net income exhibited a fluctuating yet generally upward trend over the analyzed periods. Starting at 645,596 thousand US dollars in February 2020, it declined to 588,913 thousand US dollars by January 2021. Subsequently, there was a significant increase to 975,322 thousand US dollars in January 2022, followed by a decrease to 854,800 thousand US dollars in January 2023. However, the net income surged notably in the most recent periods, reaching 1,550,190 thousand US dollars in January 2024 and further increasing to 1,814,616 thousand US dollars by February 2025. This overall trend suggests growing profitability with some volatility.

Net Operating Profit After Taxes (NOPAT)

NOPAT followed a pattern similar to net income, indicating consistent operational performance trends. Beginning at 711,860 thousand US dollars in February 2020, it experienced a reduction to 680,052 thousand US dollars in January 2021. This was followed by a sharp increase to 1,040,291 thousand US dollars in January 2022 and a slight decline to 933,695 thousand US dollars in January 2023. The figure then escalated substantially in the subsequent years to 1,622,788 thousand US dollars in January 2024 and 1,928,398 thousand US dollars by February 2025. The increase in NOPAT over time reflects enhanced operating efficiency and profitability after accounting for taxes.

Summary Insights

Both net income and NOPAT demonstrate an overall upward trajectory despite short-term decreases around the early 2021 and 2023 periods. The strong rebound and substantial increases in the latest years highlight improved profitability and operational effectiveness. The parallel trends of net income and NOPAT suggest that the company's core operations are driving earnings growth, with effective cost management and tax impacts potentially influencing fluctuations. The data points to a positive financial health outlook with expanding profit-generating capabilities over the period analyzed.

Income Tax Expense

The income tax expense demonstrates a general increasing trend over the analyzed years. Starting at approximately $252 million in early 2020, it slightly decreased to around $230 million in early 2021. Following this period, a notable upward trajectory is observed, with values rising to approximately $359 million in early 2022, then increasing more pronouncedly to about $478 million in early 2023. This upward trend continues with values reaching approximately $626 million in early 2024 and further escalating to around $761 million by early 2025.

Cash Operating Taxes

Cash operating taxes show a somewhat similar pattern, albeit with more variation. Initially, the amount decreased from roughly $233 million in early 2020 to nearly $202 million in early 2021. Subsequently, there is a significant increase to about $371 million in early 2022 and a further rise to nearly $475 million in early 2023. From early 2023 to early 2024, there is a substantial increase to approximately $664 million, followed by a slight decrease to around $717 million in early 2025.

Comparative Insights

Both income tax expense and cash operating taxes exhibit upward trends over the observed period, with the most significant growth occurring after early 2021. The cash operating taxes display higher volatility with a notable spike followed by a minor decline in the last year, whereas income tax expense consistently increases year over year after an initial dip. The rise in these tax-related expenses may reflect growth in taxable income or changes in tax regulation impacting the financial charges of the company.

Total Reported Debt & Leases

The total reported debt and leases exhibit a consistent upward trend over the examined periods. Starting from approximately 740 million US dollars in early 2020, the debt level increased steadily each year, reaching over 1.57 billion US dollars by early 2025. The most significant incremental growth appears between the years 2023 and 2024, where the debt increased by more than 330 million US dollars, indicating a possible expansion phase or increased financial leverage.

Stockholders' Equity

Stockholders' equity also shows a steady and substantial growth throughout the periods. Beginning at roughly 1.95 billion US dollars in early 2020, equity rose consistently each year, culminating in approximately 4.32 billion US dollars by early 2025. The most pronounced growth in equity occurs between 2023 and 2024, with an increase of nearly 1.1 billion US dollars, suggesting enhanced retained earnings or additional equity financing.

Invested Capital

Invested capital reflects a continuous growth trajectory over the analyzed time frame. From about 3.01 billion US dollars in early 2020, invested capital climbs steadily, reaching approximately 6.51 billion US dollars by early 2025. The largest annual increase is observed between 2023 and 2024, mirroring the substantial growth seen in both debt and equity in the same period. This pattern indicates increased overall capital investment, potentially for business expansion or asset acquisition.

Overall Summary

The financial data collectively suggest that the company is in a phase of expansion, supported by increasing leverage and equity. Both liabilities and shareholders' funds have grown significantly, with invested capital nearly doubling over the five-year span. The pronounced increases between 2023 and 2024 across all key financial measures highlight a potentially strategic deployment of resources. This expansion could be reflective of investments aimed at enhancing the company's market position or operational capacity.

The data presents key financial metrics over a period of six years, with a focus on economic profit, invested capital, and the economic spread ratio.

Economic Profit

Economic profit exhibits notable fluctuations throughout the observed periods. Initially, it decreased sharply from approximately $225 million in early 2020 to around $82 million in early 2021. Following this decline, the metric increased significantly in early 2022 to over $404 million but then dropped again in early 2023 to about $201 million. From that point, economic profit demonstrated strong upward momentum, reaching approximately $651 million in early 2024 and further rising to nearly $883 million by early 2025. Overall, economic profit showed a pattern of volatility with a clear recovery and robust growth in the last two years.

Invested Capital

Invested capital consistently increased over the six-year timeframe. Starting at around $3.01 billion in early 2020, it grew steadily each year, reaching approximately $3.67 billion in early 2021, $3.91 billion in early 2022, and crossing $4.53 billion by early 2023. This upward trend accelerated in the last two years, with invested capital rising to about $5.98 billion in early 2024 and $6.51 billion in early 2025. The steady growth in invested capital reflects continuous investment in the company's assets.

Economic Spread Ratio

The economic spread ratio experienced variability but showed a general rising trend over the period. It began at 7.49% in early 2020, then dropped significantly to 2.23% in early 2021. The ratio rebounded sharply in early 2022 to 10.34%, but again decreased to 4.43% by early 2023. From then onward, the ratio improved markedly, rising to 10.89% in early 2024 and reaching its highest point at 13.57% in early 2025. This indicates increasing efficiency in generating returns above the cost of capital in recent years.

In summary, the company demonstrated a pattern of economic profit volatility initially, followed by strong recovery and growth. Invested capital showed consistent and accelerating expansion, while the economic spread ratio, despite fluctuations, improved significantly in the later years, reflecting enhanced value creation. Together, these trends suggest improving profitability and capital efficiency over the analyzed periods.

Economic Profit

The economic profit exhibits notable fluctuations over the periods analyzed. Initially, there is a decrease from 225,258 thousand US$ in early 2020 to 81,770 thousand US$ in early 2021. This is followed by a significant rise to 404,203 thousand US$ in early 2022, indicating a strong recovery. However, economic profit declines again to 200,660 thousand US$ by early 2023 before increasing substantially in the subsequent periods, reaching 651,322 thousand US$ in early 2024 and peaking at 882,728 thousand US$ in early 2025.

Adjusted Net Revenue

Adjusted net revenue shows a continuous upward trend throughout the timeframe. Starting at 4,000,297 thousand US$ in early 2020, there is steady growth each year, reaching 4,437,314 thousand US$ in early 2021, then surging to 6,308,964 thousand US$ in early 2022. Growth continues with 8,153,801 thousand US$ in early 2023, followed by 9,674,279 thousand US$ in early 2024, and finally attaining 10,589,999 thousand US$ in early 2025. This indicates robust and sustained revenue expansion over the periods.

Economic Profit Margin

The economic profit margin mirrors the volatility observed in economic profit but with an overall upward trajectory. Beginning at 5.63% in early 2020, it sharply declines to 1.84% in early 2021. It then rebounds to 6.41% in early 2022, decreases again to 2.46% by early 2023, and subsequently increases markedly to 6.73% in early 2024 and 8.34% in early 2025. This pattern suggests periods of fluctuating profitability relative to revenue, followed by significant improvement in margin efficiency towards the latter periods.