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LULU, lululemon athletica inc.

Our design and development team continues to source technically advanced fabrics, with new feel and fit, and craft innovative functional features for our products.

Through our vertical retail strategy and direct connection with our customers, whom we refer to as guests, we are able to collect feedback and incorporate unique performance and fashion needs into our design process.

Latest annual: FY2026 10-K

LULU · lululemon athletica inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2026

$11.1B

+4.9% YoY · 20% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $11.2B 5-yr avg $9.1B

Gross margin 56% 5-yr avg 57%

Operating margin 18.3% 5-yr avg 20.7%

ROIC 44% 5-yr avg 62%

Owner-earnings margin 13% 5-yr avg 15%

Free cash flow margin 11% 5-yr avg 12%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: Revenue is Women's apparel (63%), Men's apparel (24%) and Accessories and other categories (13%).
What moves the needle: Gross margin has run about 56% and operating margin about 20% through the cycle, a wide spread between price and the cost of what it sells — whether that advantage is durable pricing power or a margin that can erode is the question the record is for. That margin has stayed fairly steady relative to where it runs (16%–24% over the years), so unit growth and cost discipline, not a moving line, are the lever. Inventory runs near 14% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has run high across the record (median 58%, above 15% in 10 of 10 years), though buybacks and expensed R&D and brands shrink the capital base, so the figure overstates the underlying economics. The steadier read is owner earnings: roughly 14% of revenue reaches owners as cash, consistently. Whether these returns reflect real pricing power or an accounting artifact is the judgment the 10-K is for.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

Women's apparel is 63% of revenue, with Men's apparel the other meaningful line at 24%.

Revenue by product line, FY2026

Women's apparel63%$7.0B
Men's apparel24%$2.7B
Accessories and other categories13%$1.4B

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2017–2026

realized figures from each filing · older years to the left

2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	2026’26	TTMTTMMay 2026
											Income statement
$2.3B	$2.6B	$3.3B	$4.0B	$4.4B	$6.3B	$8.1B	$9.6B	$10.6B	$11.1B	$11.2B	RevenueRevenue
51%	53%	55%	56%	56%	58%	55%	58%	59%	57%	56%	Gross marginGross mgn
33%	34%	34%	34%	37%	36%	34%	35%	36%	37%	37%	SG&A / revenueSG&A/rev
$421M	$456M	$706M	$889M	$820M	$1.3B	$1.3B	$2.1B	$2.5B	$2.2B	$2.0B	Operating incomeOp. inc.
18.0%	17.2%	21.5%	22.3%	18.6%	21.3%	16.4%	22.2%	23.7%	19.9%	18.3%	Operating marginOp. mgn
$303M	$259M	$484M	$646M	$589M	$975M	$855M	$1.6B	$1.8B	$1.6B	$1.5B	Net incomeNet inc.
28%	44%	32%	28%	28%	27%	36%	29%	30%	29%	30%	Effective tax rateTax rate
											Cash flow & returns
$386M	$489M	$743M	$669M	$803M	$1.4B	$966M	$2.3B	$2.3B	$1.6B	$1.9B	Operating cash flowOp. cash
$88M	$108M	$122M	$162M	$185M	$224M	$292M	$379M	$447M	$496M	$517M	DepreciationDeprec.
($22M)	$105M	$108M	($184M)	($22M)	$120M	($258M)	$273M	($78M)	($535M)	($109M)	Working capital & otherWC & other
$150M	$158M	$226M	$283M	$229M	$395M	$639M	$652M	$689M	$681M	$656M	CapexCapex
6.4%	6.0%	6.9%	7.1%	5.2%	6.3%	7.9%	6.8%	6.5%	6.1%	5.9%	Capex / revenueCapex/rev
$299M	$381M	$620M	$507M	$574M	$1.2B	$675M	$1.9B	$1.8B	$1.1B	$1.4B	Owner earningsOwner earn.
12.7%	14.4%	18.9%	12.8%	13.0%	18.6%	8.3%	19.9%	17.2%	10.0%	12.7%	Owner earnings marginOE mgn
$237M	$331M	$517M	$386M	$574M	$995M	$328M	$1.6B	$1.6B	$922M	$1.3B	Free cash flowFCF
10.1%	12.5%	15.7%	9.7%	13.0%	15.9%	4.0%	17.1%	15.0%	8.3%	11.4%	Free cash flow marginFCF mgn
—	—	$0	$0	$453M	$0	$0	$0	$154M	$0	$0	AcquisitionsAcquis.
$29M	$100M	$598M	$173M	$64M	$813M	$444M	$559M	$1.6B	$1.2B	—	BuybacksBuybacks
48%	42%	85%	74%	42%	66%	43%	76%	75%	49%	44%	ROICROIC
22%	16%	33%	33%	23%	36%	27%	37%	42%	32%	30%	Return on equityROE
22%	16%	33%	33%	23%	36%	27%	37%	42%	32%	30%	Retained to equityRetained/eq
											Balance sheet
$735M	$991M	$881M	$1.1B	$1.2B	$1.3B	$1.2B	$2.2B	$2.0B	$1.8B	$1.5B	Cash & investmentsCash+inv
$9M	$19M	$36M	$40M	$62M	$77M	$133M	$125M	$120M	$191M	$165M	ReceivablesReceiv.
$298M	$330M	$405M	$519M	$647M	$966M	$1.4B	$1.3B	$1.4B	$1.7B	$1.7B	InventoryInvent.
$25M	$25M	$96M	$80M	$172M	$290M	$173M	$348M	$271M	$331M	$294M	Accounts payablePayables
$283M	$324M	$345M	$479M	$537M	$754M	$1.4B	$1.1B	$1.3B	$1.6B	$1.6B	Operating working capitalOper. WC
$1.2B	$1.4B	$1.4B	$1.8B	$2.1B	$2.6B	$3.2B	$4.1B	$4.0B	$4.3B	$4.0B	Current assetsCur. assets
$242M	$293M	$500M	$620M	$883M	$1.4B	$1.5B	$1.6B	$1.8B	$1.9B	$1.8B	Current liabilitiesCur. liab.
4.8×	4.9×	2.9×	2.9×	2.4×	1.9×	2.1×	2.5×	2.2×	2.3×	2.2×	Current ratioCurr. ratio
—	—	—	$24M	$387M	$387M	$24M	$24M	$160M	$185M	$185M	GoodwillGoodwill
$1.7B	$2.0B	$2.1B	$3.3B	$4.2B	$4.9B	$5.6B	$7.1B	$7.6B	$8.5B	$8.5B	Total assetsAssets
($735M)	($991M)	($881M)	($1.1B)	($1.2B)	($1.3B)	($1.2B)	($2.2B)	($2.0B)	($1.8B)	($1.5B)	Net debt / (cash)Net debt
$1.4B	$1.6B	$1.4B	$2.0B	$2.6B	$2.7B	$3.1B	$4.2B	$4.3B	$5.0B	$4.8B	Shareholders’ equityEquity
0.7%	0.7%	0.9%	1.1%	1.2%	1.1%	1.0%	1.0%	0.9%	0.6%	0.6%	Stock comp / revenueSBC/rev
											Per share
137M	136M	134M	131M	131M	130M	128M	127M	124M	119M	115M	Shares out (diluted)Shares
$17.07	$19.45	$24.55	$30.39	$33.64	$48.02	$63.36	$75.71	$85.43	$93.25	$97.02	Revenue / shareRev/sh
$2.21	$1.90	$3.61	$4.93	$4.50	$7.49	$6.68	$12.20	$14.64	$13.26	$12.64	EPS (diluted)EPS
$2.18	$2.80	$4.63	$3.87	$4.39	$8.94	$5.27	$15.09	$14.74	$9.29	$12.29	Owner earnings / shareOE/sh
$1.73	$2.43	$3.86	$2.95	$4.39	$7.63	$2.56	$12.94	$12.78	$7.74	$11.08	Free cash flow / shareFCF/sh
$1.09	$1.16	$1.69	$2.16	$1.75	$3.03	$4.99	$5.13	$5.56	$5.72	$5.68	Cap. spending / shareCapex/sh
$9.90	$11.73	$10.79	$14.91	$19.55	$21.03	$24.60	$33.31	$34.89	$41.67	$41.79	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+20.8%/yr	+22.6%/yr
Owner earnings / share	+17.5%/yr	+16.2%/yr
EPS	+22.0%/yr	+24.1%/yr
Capital spending / share	+20.2%/yr	+26.7%/yr
Book value / share	+17.3%/yr	+16.3%/yr

The record, charted

FY2017–2026

Each measure over its full record; the current point and the worst year marked.

Share count

119Mpeak FY2017

ROIC

49%low FY2021

Gross margin

57%low FY2017

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$1.1Bowner earningsvs.$1.6Bnet incomelow FY2017

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2017FY2026

Owner-earnings bridge

FY2022–FY2026cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2026 the business earned $1.1B of owner earnings, the operating cash left after the $496M it takes just to hold its position. It put $185M more into growth; free cash flow, after that spending, was $922M.

Reported net income$1.6B

Owner earnings$1.1B · 10% of revenue

	FY2026	FY2025	FY2024	FY2023	FY2022
Reported net income	$1.6B	$1.8B	$1.6B	$855M	$975M
Depreciation & amortizationnon-cash charge added back	+$496M	+$447M	+$379M	+$292M	+$224M
Stock-based compensationreal costnon-cash, but a real cost	+$62M	+$90M	+$94M	+$78M	+$69M
Working capital & othertiming of cash in and out, other non-cash items	−$535M	−$78M	+$273M	−$258M	+$120M
Cash from operations	$1.6B	$2.3B	$2.3B	$966M	$1.4B
Maintenance capital expenditurethe spending needed just to hold position and volume	−$496M	−$447M	−$379M	−$292M	−$224M
Owner earnings	$1.1B	$1.8B	$1.9B	$675M	$1.2B
Growth capital expenditurediscretionary; spent to get bigger, not to stand still	−$185M	−$243M	−$272M	−$347M	−$170M
Free cash flow	$922M	$1.6B	$1.6B	$328M	$995M
Owner-earnings marginowner earnings ÷ revenue	10%	17%	20%	8%	19%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the maintenance capital it must spend to hold its position (here about $496M, roughly its depreciation, the rate its assets wear out). The other $185M of its capital spending is growth it chose, not upkeep it owed; charged only with the maintenance it must do, the business earns well more than the year's free cash flow shows. The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $62M), owner earnings is nearer $1.0B.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2026 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? —

No meaningful interest burden

Little or no interest expense reported

What this means
Little or no interest expense reported, the business isn't leaning on lenders to operate.
How heavy is the debt, net of cash? +$1.8B

Net cash, debt-free

Cash $1.8B − debt $0

What this means
Cash and short-term investments exceed every dollar of debt by $1.8B, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 110d

Long (60+ days)

DSO 6 + DIO 129 − DPO 25 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital —

Not enough data

Industry peers: median 18%

What this means
The filing data didn't include the inputs for this check.
Owner-earnings margin 13%

Solid through the cycle

10-yr median margin, range 8%–20%; latest $1.1B = operating cash $1.6B − maintenance capex $496M

Industry peers: median 7%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 10% of revenue this year, a 13% median across 10 years. It chose to put $185M more into growth, so free cash flow this year was $922M — the gap is investment, not weakness. Treating stock comp as the real expense it is (less $62M of SBC) leaves $1.0B.
Are earnings backed by cash? 1.01×

Cash-backed

Cash from ops $1.6B ÷ net income $1.6B

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 107%

Returned more than it generated

Dividends + buybacks $1.2B ÷ Owner Earnings $1.1B

What this means
The company returned more than it generated: against $1.1B of Owner Earnings, $1.2B (107%) went back to shareholders, $0 dividends, $1.2B buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Net of $62M stock comp, the real buyback was about $1.1B. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands.
Investing or harvesting? 1.37×

Expanding

Capex $681M ÷ depreciation $496M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 4 of 5 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $11.1B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Pass

Current ratio ≥ 2× · 2.26×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Earnings stability Pass

A profit every year (10-yr record) · no losses

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Pass

Earnings +33% over the record · +373%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $15.20/share (latest year $14.56), the averaged base the calculator's gate runs on, and book value is $45.76/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2017–2026

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 10 of 10

What this means
Never lost money over the record, the earnings stability Graham insisted on.
Operating margin 19% → 22% (3-yr avg ends)

In the filing’s words The record and the words agree: the margin widened and the filing attributes the gain to its own pricing, not volume alone.

What this means
Through the cycle the operating margin widened — about 19% early to 22% lately, median 20% — pricing power intact or improving.
Owner earnings growth +18%/yr

What this means
Owner earnings grew about 18% a year over the record.
Worst year 2023 · 16.4% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Share count −1.6%/yr

What this means
The share count is shrinking, buybacks are quietly growing your slice of the business.

Does AI threaten the moat?

Moderate contestability

AI is likely to reshape costs and some products here without clearly contesting or sparing the core moat; how the company itself frames it is the tell.

In its own filing A competitive risk, new this year

Its FY2026 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.

“We may not efficiently and effectively implement and leverage technological advancements such as AI to support these interactions, which could have an adverse impact on our results of operations if our competitors are more effective than us, if this disrupts our operations, or if this leads to increased operating costs…”

The question is whether a moat the record shows as durable outlasts a technology that lowers the cost of part of what the firm sells. The durability is read in the record above, the filing's own framing of AI beside it; the industry label decides nothing on its own.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, May 3, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$4.0B

Cash & short-term investments$1.5B
Receivables$165M
Inventory$1.7B
Other current assets$628M

Current liabilities$1.8B

Accounts payable$294M
Other current liabilities$1.5B

Current ratio2.23×all current assets ÷ what's due · Graham looked for 2×

Quick ratio1.29×stricter: inventory excluded

Cash ratio0.84×strictest: cash alone against what's due

Working capital$2.2Bthe cushion left after near-term bills

Revenue, latest quarter vs. a year ago+4.3%the freshest read on whether the business is still growing

Current ratio, recent quarters2.4× → 2.2×

Deeper floors

Tangible book value$4.6Bequity stripped of goodwill & intangibles

Net current asset value$289MGraham's net-net: current assets less all liabilities

Debt incl. operating leases$2.1B$2.1B of it operating leases; with finance leases, “total fixed claims” below reaches $1.8B (annual-report basis)

Deferred revenue$28Mcustomer cash collected before delivery; operating float

From the company's latest filing.

Lease obligations

the lease note, SEC EDGAR →

Debt by another name. What the business owes on the property, aircraft, stores and equipment it rents rather than owns is a fixed claim due on a schedule; added back to the debt, it is the true leverage. That ladder, and what it adds to the debt on the page above.

'26$371M

'27$392M

'28$334M

'29$287M

'30$182M

later$538M

Lease payments by year, scaled to the largest; “later” is everything beyond year five, shown apart. These are the contractual cash payments, before the interest the filing imputes back out to the balance-sheet liability.

Due in the next 12 months$371Ma fixed cash payment, owed whether or not the business has a good year

Total lease payments$2.1Bevery year plus the tail, undiscounted: the full cash the leases will take

On the balance sheet$1.8Bthe present value of those payments, the recognised lease liability

True leverage: debt plus leases

On-balance-sheet debt$0

Lease obligations (present value)$1.8B

Total fixed claims on the business$1.8B

Counting the leases the way Buffett does, the fixed claims on this business come to $1.8B, of which the leases are 100%, more than the debt itself. The lease wall above and the debt schedule together are the calendar of what must be paid, and when.

Lease ladder read from the ASC 842 tags in the company’s Feb 1, 2026 annual report and reconciled: the yearly buckets sum to the undiscounted total, which less the imputed interest equals the balance-sheet liability; a ladder that doesn’t tie out is withheld.

How the cash was used, 2017–2026

Over the record, the business generated $11.6B of operating cash; how management split it reads as a balanced allocator, splitting cash between the business, owners, and the balance sheet.

Reinvested$4.1B · 35%
Buybacks$5.6B · 48%
Retained (debt / cash)$1.9B · 17%

Returned to owners$5.6B
62% of the owner earnings the business produced over the span, $0 as dividends and $5.6B as buybacks.
Average price paid for buybacks$233.14
Across the years where the filing reports a share count, 24M shares were bought for $5.6B, about $233.14 each. Year to year the price paid ranged from $52.77 (2018) to $372.43 (2024); its heaviest year, 2025, paid $320.96 ($1.6B).
Net change in share count−15.9%
The diluted count fell from 137M to 115M, so the buybacks outran the stock issued to staff.
Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.
Return on what it retained34%
Of the earnings it kept rather than paid out ($3.5B over the span), annual owner earnings (first three years vs last three) grew $1.2B, so each retained $1 added about 0.34 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$191M2% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity4%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$607Mover 10 years buying other businesses, against $4.1B of capital spent building

$362M written down across 1 year (2023): goodwill the company has already conceded it overpaid for, charged against earnings. That is roughly 60% of the cash it put into acquisitions over the span. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Calvin McDonald	$10.6M	$39.3M	$574M
2022	Calvin McDonald	$13.3M	$18.8M	$1.2B
2023	Calvin McDonald	$15.7M	$18.3M	$675M
2024	Calvin McDonald	$16.5M	$46.8M	$1.9B
2025	Calvin McDonald	$14.6M	$2.2M	$1.8B

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership<1%
The stake all directors and executive officers hold together, per the 2025 proxy: skin in the game, the first thing Munger reads.
CEO pay ratio709:1
What the chief earns for every dollar the median employee makes, per the 2025 proxy. A high ratio alone settles nothing; some businesses are genuinely top-heavy in scarce skill. A runaway figure is where Buffett starts asking whether the board is doing its job.
Stock-based compensation$62M
The slice of the business handed to employees in shares this year, 1% of revenue, equal to 3% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why lululemon athletica inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2017–2026.

1 of the 5 tests turned up something to look into; the other 4 came back clean.

Look hereDid receivables and inventory outpace sales?13% → 17% of sales
Receivables and inventory grew from $308M to $1.9B while revenue grew 378%: working capital is climbing faster than sales (13% of revenue then, 17% now). That can mean customers paying slower, stock building up, or revenue pulled forward. The filing's cash-flow and receivables notes say which.

And these came back clean

Is it less profitable than it was?
Did the share count rise anyway?
Did reported profit become cash?
Are "one-time" charges a yearly habit?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2026

read the 10-K →

Which reported numbers are a judgment call?
Management names Income taxes, Inventory as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Textiles & Apparel

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
LULUlululemon athletica inc.	$11.1B	56%	20.6%	58%	14%
CTASCintas	$10.3B	49%	18.0%	20%	15%
VFCVF Corp.	$9.6B	54%	8.9%	13%	7%
LEVILevi Strauss & Co	$6.3B	58%	9.8%	23%	5%
UAUnder Armour Inc.	$5.0B	46%	2.3%	4%	2%
COLMColumbia Sportswear	$3.4B	50%	10.7%	18%	10%
GIIIG-III Apparel	$3.0B	36%	6.3%	9%	4%
CRICarter's	$2.9B	43%	11.0%	24%	9%
Group median	—	49%	10.3%	19%	8%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what lululemon athletica inc. has delivered.

Today’s price $

Through the cycle, lululemon athletica inc. earns about $1.5B on its 13.7% median owner-earnings margin. This year’s 10.0% margin runs below that; the reported figure may understate a lean year. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($1.5B) Net of stock comp (−$68M) Steady-state · maintenance capex ($1.4B)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’22→’26+12%/yr

Owner-earnings growth · ’17→’26+18%/yr

Owner-earnings yield—

P/E (3-yr earnings ’24–’26)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow $1.3B on 108M shares outstanding, per the 10-Q cover, as of 2026-05-29; net cash $1.5B. The if-converted diluted count is 115M, 6% above the shares outstanding: the dilution overhang (convertibles, options) a buyer inherits. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. Capex ($656M) runs well above depreciation ($517M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $1.4B, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh LULU against another business →

The owners of LULU: the meeting and the votes →

Cite: Owner Scorecard, "lululemon athletica inc. (LULU), the owner's record," https://ownerscorecard.com/c/LULU, data as of 2026-07-09.

Manual order: ← LUCK its page in the Manual LUMN →

Industry order: ← LEVI the Textiles & Apparel chapter NCI →