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1、Annual Report|2023We also accelerated our efforts to increase consideration for lululemon through global brand campaigns and activations.For example,in Los Angeles,we hosted a Dupe Swap event,where about 50%of the guests who traded in product dupes were new to our brand.And in China Mainland,our Wor

2、ld Mental Health Day activations brought in over 9,000 participants across six cities.We believe our community-building approach resonates across geographies,generations,and cultures,and led to gains in brand awareness throughout key growth markets around the world over the past year the US increase

3、d from 25%to 31%,and China Mainland increased from 9%to 14%.Relative to peers,our brand awareness globally represents an opportunity for lululemon.We believe our runway for growth is substantial,and I am optimistic about the future as we continue to expand our business.Our ImpactWe are committed to

4、advancing our Impact Agenda goals and multi-year strategies for the wellbeing of people and the planet.This work supports our growth strategy as a critical business function,as our company continues to grow and serve more guests and communities around the world.For our people,we are committed to our

5、 goals of supporting physical,mental,and social wellbeing for all,and creating environments that are equitable,inclusive,and welcoming for every person within our global collective.We continued to advance our Inclusion,Diversity,Equity,and Action(IDEA)commitments across our business and invest in th

6、e wellbeing of the people who make our products.We also released lululemons third annual Global Wellbeing Report uncovering the state of wellbeing around the world,and announced the formation of our Mental Wellbeing Global Advisory Board to help deepen the impact of wellbeing initiatives across our

7、industry.And,through our lululemon Centre for Social Impact,we expanded our partnerships with global and community-led wellbeing organizations to accelerate their work,investing a total of$44.8 million to date.1For our planet,we are on a journey to contribute to a climate-stable future through our p

8、roducts and actions.We believe sustainable innovation will play a critical role,and we continue to advance our material innovation through strategic industry partnerships,as we know collaboration is essential to achieving a circular ecosystem and helping to address global challenges.Looking to the f

9、uture,we remain focused on driving innovations across our business that contribute to supporting the health of our planet.In ClosingOn behalf of myself and the entire leadership team,I want to express our sincere gratitude to the people across lululemon who champion our brand every day and made our

10、strong results possible.To our shareholders,thank you for your continued support.As we drive the business forward,we will remain agile and continue to adapt to all that is around us.My confidence in our leadership and our people remains high,as we have consistently demonstrated the strength and resi

11、lience of our brand.We are pleased with our momentum and know that we remain in the early innings of our growth story.We recognize the significant opportunity in front of us to elevate lululemon to the next level around the world in 2024 and beyond,and I remain excited and energized for what lies ah

12、ead for our brand.Calvin McDonaldChief Executive OfficerIn 2023,we celebrated our 25th anniversary and our teams continued to deliver strong and balanced results.As our product innovations,guest experiences,and market expansions connected us with our guests and communities,we saw growth across each

13、of our categories,channels,and regions,and ended the year with$9.6 billion in net revenue,representing a year-over-year increase of 19%.I am grateful to our teams around the world for driving our performance and our goals to advance the wellbeing of people and the planet through our Impact Agenda.Co

14、mmunity has been at the core of lululemon since day one,and we believe the deep,genuine connections across our global collective are a true differentiator for our brand.Our Growth PillarsWe remain committed to our Power of Three 2 growth plan,which is grounded in our goals to double our mens busines

15、s,double our digital business,and quadruple our international business to ultimately double our revenue from 2021 levels to$12.5 billion by 2026.In 2023,we advanced our plan with progress across each of our three growth pillars,and I am proud of all that we achieved as we continued to navigate a dyn

16、amic consumer and macro environment.Within product innovation,we continued to put product at the center of everything we do,leveraging the latest research,technologies,and materials to solve for the unmet needs of our guests.We grew our mens business by 15%,our womens business by 17%,and net revenue

17、 from our other categories increased 36%.We believe one of our competitive advantages is our ability to consistently bring newness and innovation into our assortment,and that our proprietary fabrics,innovative designs,and functional technology set us apart.With our focus on feel,functionality,fit,an

18、d versatility,people of all ages and backgrounds can see themselves in lululemon.Our core and new product launches continued to resonate with guests.We saw strength in many of our key franchises including Align,Scuba,and ABC,and leveraged the versatility of our core assortment to expand our offering

19、s within our Play categories including golf and tennis.We also engineered new sensations within collections such as Wundermost bodywear for women,expanded our casual offerings for men with Steady State and Soft Jersey loungewear,and launched updated and enhanced versions of our Blissfeel and Chargef

20、eel footwear styles.Looking to 2024,I am excited by our impressive pipeline of product innovation,from our first-ever mens footwear collection to innovations created with and inspired by world-class athletes from Team Canada and our FURTHER womens ultramarathon.Within guest experience,our omni-opera

21、ting model continued to serve our guests both in-store and online.We saw strength across both channels,with company-operated store net revenue increasing 21%and e-commerce net revenue increasing 17%,as well as our single biggest day of traffic and revenue in company history on Black Friday.We contin

22、ued to leverage our successful grassroots approach to cultivating relationships with our guests at the local level.By creating connection points across both the physical and digital,we engage with guests in ways that go beyond a transaction,creating an ecosystem of connection that helps build our br

23、and awareness and drive loyalty.In-store and online,our Educators supported guests in learning about our products and innovations.In our communities,our teams created unforgettable experiences at the local and global level,from store events to larger-scale community activations such as 10K runs.Thro

24、ugh our membership program,which has grown to more than 17 million members in the first year,we gained deeper knowledge on what aspects of our brand are most meaningful to them.And we announced a multi-year strategic partnership between lululemon and Peloton,expanding our reach and awareness.Within

25、market expansion,our business remained strong across our global regions with 12%growth in the Americas,67%in China Mainland,and 43%in Rest of World.We entered new markets in EMEA and APAC,including our first store in Bangkok,Thailand.In China Mainland,we were proud to celebrate our 10-year anniversa

26、ry and end the year approaching$1 billion in revenue.In total,we opened 56 net new company-operated stores across the globe contributing to 15%square footage growth,ending 2023 with 711 company-operated stores worldwide.AR|2023To our shareholders1 Included within our Impact Agenda is a goal to inves

27、t a total of$75.0 million USD to advance equity in wellbeing by 2025.As of January 28,2024,we have contributed$44.8 million to lululemons Centre for Social Impact,$32.4 million of which has been contributed directly to social impact organizations.The remaining$12.4 million primarily consists of cont

28、ributions toward a donor-advised fund for future grant making.UNITEDSTATESSECURITIESANDEXCHANGECOMMISSIONWashington,D.C.20549_Form10-K_ANNUALREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934ForthefiscalyearendedJanuary28,2024ORTRANSITIONREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESE

29、XCHANGEACTOF1934ForthetransitionperiodfromtoCommissionfilenumber001-33608_lululemonathleticainc.(Exactnameofregistrantasspecifiedinitscharter)_Delaware20-3842867(Stateorotherjurisdictionofincorporationororganization)(I.R.S.EmployerIdentificationNumber)1818CornwallAvenue,Vancouver,BritishColumbiaV6J1

30、C7(Addressofprincipalexecutiveoffices)Registrantstelephonenumber,includingareacode:(604)732-6124SecuritiesregisteredpursuanttoSection12(b)oftheAct:TitleofeachclassTradingsymbol(s)NameofeachexchangeonwhichregisteredCommonStock,parvalue$0.005pershareLULUNasdaqGlobalSelectMarket_Indicatebycheckmarkifth

31、eregistrantisawell-knownseasonedissuer,asdefinedinRule405oftheSecuritiesAct.YesNoIndicatebycheckmarkiftheregistrantisnotrequiredtofilereportspursuanttoSection13orSection15(d)oftheAct.YesNoIndicatebycheckmarkwhethertheregistrant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesEx

32、changeActof1934duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtofilesuchreports),and(2)hasbeensubjecttosuchfilingrequirementsforthepast90days.YesNoIndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyeveryInteractiveDataFilerequiredtobesubmittedpursuanttoRul

33、e405ofRegulationS-Tduringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtosubmitsuchfiles).YesNoIndicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,asmallerreportingcompany,oranemerginggrowthcompany.Seethedefinitionsoflarge

34、acceleratedfiler,acceleratedfiler,smallerreportingcompany,andemerginggrowthcompanyinRule12b-2oftheExchangeAct.LargeAcceleratedFilerAcceleratedfilerNon-acceleratedfilerSmallerreportingcompanyEmerginggrowthcompanyIfanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextended

35、transitionperiodforcomplyingwithanyneworrevisedfinancialaccountingstandardsprovidedpursuanttoSection13(a)oftheExchangeAct.IndicatebycheckmarkwhethertheregistranthasfiledareportonandattestationtoitsmanagementsassessmentoftheeffectivenessofitsinternalcontroloverfinancialreportingunderSection404(b)ofth

36、eSarbanes-OxleyAct(15U.S.C.7262(b)bytheregisteredpublicaccountingfirmthatpreparedorissueditsauditreport.IfsecuritiesareregisteredpursuanttoSection12(b)oftheAct,indicatebycheckmarkwhetherthefinancialstatementsoftheregistrantincludedinthefilingreflectthecorrectionofanerrortopreviouslyissuedfinancialst

37、atements.Indicatebycheckmarkwhetheranyofthoseerrorcorrectionsarerestatementsthatrequiredarecoveryanalysisofincentive-basedcompensationreceivedbyanyoftheregistrantsexecutiveofficersduringtherelevantrecoveryperiodpursuantto240.10D-1(b).Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedin

38、rule12b-2oftheAct).YesNoTheaggregatemarketvalueofthevotingstockheldbynon-affiliatesoftheregistrantonJuly28,2023wasapproximately$40,905,000,000.SuchaggregatemarketvaluewascomputedbyreferencetotheclosingpriceofthecommonstockasreportedontheNasdaqGlobalSelectMarketonJuly28,2023.Forpurposesofdeterminingt

39、hisamountonly,theregistranthasdefinedaffiliatesasincludingtheexecutiveofficers,directors,andownersof10%ormoreoftheoutstandingvotingstockoftheregistrantonJuly28,2023.CommonStock:AtMarch15,2024therewere120,892,132sharesoftheregistrantscommonstock,parvalue$0.005pershare,outstanding.ExchangeableandSpeci

40、alVotingShares:AtMarch15,2024,therewereoutstanding5,115,961exchangeablesharesofLuluCanadianHolding,Inc.,awholly-ownedsubsidiaryoftheregistrant.Exchangeablesharesareexchangeableforanequalnumberofsharesoftheregistrantscommonstock.Inaddition,atMarch15,2024,theregistranthadoutstanding5,115,961sharesofsp

41、ecialvotingstock,throughwhichtheholdersofexchangeablesharesofLuluCanadianHolding,Inc.mayexercisetheirvotingrightswithrespecttotheregistrant.Thespecialvotingstockandtheregistrantscommonstockgenerallyvotetogetherasasingleclassonallmattersonwhichthecommonstockisentitledtovote._DOCUMENTSINCORPORATEDBYRE

42、FERENCEPortionsoftheProxyStatementforthe2024AnnualMeetingofStockholdershavebeenincorporatedbyreferenceintoPartIIIofthisAnnualReportonForm10-K.TABLEOFCONTENTSPagePARTIItem1.Business1Item1A.RiskFactors10Item1C.Cybersecurity22Item2.Properties24Item3.LegalProceedings24Item4.MineSafetyDisclosures24PARTII

43、Item5.MarketforRegistrantsCommonEquity,RelatedStockholderMattersandIssuerPurchasesofEquitySecurities25Item6.SelectedConsolidatedFinancialData26Item7.ManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperations27Item7A.QuantitativeandQualitativeDisclosuresAboutMarketRisk44Item8.Financia

44、lStatements46IndexforNotestotheConsolidatedFinancialStatements54Item9A.ControlsandProcedures79Item9B.OtherInformation80Item9C.DisclosureRegardingForeignJurisdictionsthatPreventInspections81PARTIIIItem10.Directors,ExecutiveOfficersandCorporateGovernance82Item11.ExecutiveCompensation82Item12.SecurityO

45、wnershipofCertainBeneficialOwnersandManagementandRelatedStockholderMatters82Item13.CertainRelationshipsandRelatedTransactions,andDirectorIndependence83Item14.PrincipalAccountantFeesandServices83PARTIVItem15.ExhibitsandFinancialStatementSchedule84Item16.Form10-KSummary86Signatures87This page intentio

46、nally left blank PARTISpecialNoteRegardingForward-LookingStatementsThisreportandsomedocumentsincorporatedhereinbyreferenceincludeestimates,projections,statementsrelatingtoourbusinessplans,objectives,andexpectedoperatingresultsthatareforward-lookingstatementswithinthemeaningofthePrivateSecuritiesLiti

47、gationReformActof1995,Section27AoftheSecuritiesActof1933andSection21EoftheSecuritiesExchangeActof1934.Weusewordssuchasanticipates,believes,estimates,may,intends,expects,andsimilarexpressionstoidentifyforward-lookingstatements.Discussionscontainingforward-lookingstatementsmaybefoundinthematerialsetfo

48、rthunderBusiness,ManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperations,andinothersectionsofthereport.Allforward-lookingstatementsareinherentlyuncertainastheyarebasedonourexpectationsandassumptionsconcerningfutureevents.Anyorallofourforward-lookingstatementsinthisreportmayturnout

49、tobeinaccurate.Wehavebasedtheseforward-lookingstatementslargelyonourcurrentexpectationsandprojectionsaboutfutureeventsandfinancialtrendsthatwebelievemayaffectourfinancialcondition,resultsofoperations,businessstrategy,andfinancialneeds.Theymaybeaffectedbyinaccurateassumptionswemightmakeorbyknownorunk

50、nownrisksanduncertainties,includingtherisks,uncertaintiesandassumptionsdescribedinthesectionentitledItem1A.RiskFactorsandelsewhereinthisreport.Inlightoftheserisks,uncertaintiesandassumptions,theforward-lookingeventsandcircumstancesdiscussedinthisreportmaynotoccurascontemplated,andouractualresultscou

51、lddiffermateriallyfromthoseanticipatedorimpliedbytheforward-lookingstatements.Allforward-lookingstatementsinthisreportaremadeasofthedatehereof,basedoninformationavailabletousasofthedatehereof,andweassumenoobligationtoupdateanyforward-lookingstatement.Thisannualreportincludeswebsiteaddressesandrefere

52、ncestoadditionalmaterialsfoundonthosewebsites.Thesewebsitesandinformationcontainedonoraccessiblethroughthesewebsitesarenotincorporatedbyreferenceinto,anddonotformapartof,thisAnnualReportoranyotherreportordocumentwefilewiththeSEC,andanyreferencestoanywebsitesareintendedtobeinactivetextualreferenceson

53、ly.ITEM1.BUSINESSGenerallululemonathleticainc.isprincipallyadesigner,distributor,andretaileroftechnicalathleticapparel,footwear,andaccessories.Wehaveavisiontocreatetransformativeproductsandexperiencesthatbuildmeaningfulconnections,unlockinggreaterpossibilityandwellbeingforall.Sinceourinception,wehav

54、efosteredadistinctivecorporateculture;wepromoteasetofcorevaluesinourbusinesswhichincludetakingpersonalresponsibility,actingwithcourage,valuingconnectionandinclusion,andchoosingtohavefun.Thesecorevaluesattractpassionateandmotivatedemployeeswhoaredriventoachievepersonalandprofessionalgoals,andshareour

55、purposetoelevatehumanpotentialbyhelpingpeoplefeeltheirbest.InthisAnnualReportonForm10-KforthefiscalyearendedJanuary28,2024,lululemonathleticainc.(togetherwithitssubsidiaries)isreferredtoaslululemon,theCompany,we,us,orour.WerefertothefiscalyearendedJanuary28,2024as2023,thefiscalyearendedJanuary29,202

56、3as2022,andthefiscalyearendedJanuary30,2022as2021.OurnextfiscalyearendsonFebruary2,2025andisreferredtoas2024.Componentsofthisdiscussionofourbusinessinclude:OurProductsOurMarketsandSegmentsIntegratedMarketingProductDesignandDevelopmentSourcingandManufacturingDistributionFacilitiesCompetitionSeasonali

57、tyHumanCapitalIntellectualPropertySecuritiesandExchangeCommissionFilingsOurProductsWeofferacomprehensivelineofperformanceapparel,footwear,andaccessoriesmarketedunderthelululemonbrand.Ourapparelassortmentincludesitemssuchaspants,shorts,tops,andjacketsdesignedforahealthylifestyleincluding1athleticacti

58、vitiessuchasyoga,running,training,andmostotheractivities.Wealsoofferappareldesignedforbeingonthemoveandfitness-inspiredaccessories.Weexpecttocontinuetobroadenourmerchandiseofferingsthroughexpansionacrosstheseproductareas.Ourdesignanddevelopmentteamcontinuestosourcetechnicallyadvancedfabrics,withnewf

59、eelandfit,andcraftinnovativefunctionalfeaturesforourproducts.Throughourverticalretailstrategyanddirectconnectionwithourcustomers,whomwerefertoasguests,weareabletocollectfeedbackandincorporateuniqueperformanceandfashionneedsintoourdesignprocess.Inthisway,webelievewearebetterpositionedtoaddresstheneed

60、sofourguests,helpingusadvanceourproductlinesanddifferentiateusfromourcompetitors.During2023,ourwomensrangerepresented64%ofnetrevenueandourmensrangerepresented23%ofnetrevenue.Ourcomprehensivemenslineisakeypillarofourstrategicgrowthplans.Webelievenetrevenuefromourmensrangeisgrowingasmoreguestsdiscover

61、thetechnicalrigorandpremiumqualityofourmensproducts,andareattractedbyourdistinctivebrand.Wecontinuetoinnovateandintroducenewproductsforourguests.Thisincludesintroducingnewproductcategoriesandexpandingouraccessoriesassortment.Webelievethisisanotherwayinwhichwecanattractnewguestsandenablethemtoexperie

62、nceourproducts.Netrevenuefromourotherproductcategoriesrepresented13%ofnetrevenuein2023.OurMarketsandSegmentsWeoperateinover25countriesaroundtheworldandorganizeouroperationsintofourregionalmarkets:Americas,ChinaMainland,AsiaPacific(APAC),andEuropeandtheMiddleEast(EMEA).Wereportthreesegments,Americas,

63、ChinaMainland,andRestofWorld,whichiscomprisedoftheAPACandEMEAregionsonacombinedbasis.2023NetRevenueAmericas79%ChinaMainland10%RestofWorld11%2022NetRevenueAmericas84%ChinaMainland7%RestofWorld9%2021NetRevenueAmericas85%ChinaMainland7%RestofWorld8%Duringthefourthquarterof2023,werevisedthefinancialinfo

64、rmationwhichourChiefExecutiveOfficer,whoisourchiefoperatingdecisionmaker(CODM),usestoevaluateperformanceandallocateresources.Thisresultedinachangeinouridentifiedoperatingsegments.Aswehavefurtherexecutedonouromni-channelretailstrategy,andcontinuedtoexpandouroperationsininternationalmarkets,ourperform

65、ancereviewsandresourceallocationdecisionshaveevolvedtobemadeonaregionalmarketbasis.Oursegmentresultshavebeenrecasttoreflectourregionalmarket-basedstructure.Historically,oursegmentswerebasedonsellingchannel.Wecontinuetomonitorourrevenueperformancebyoursellingchannelswhicharefurtherdescribedbelow.Weop

66、erateanomni-channelretailmodelandaimtoefficientlyandeffectivelyserveourguestsinthewaysmostconvenienttothem.Wecontinuetoevolveandintegrateourdigitalandphysicalchannelsinordertoenrichourinteractionswithourguests,andtoprovideaseamlessomni-channelexperience.Wehaveinvestedintechnologieswhichenableouromni

67、-channelretailingmodel.Ourcapabilitiesdifferbymarketandinclude:Buyonlinepick-upinstore-guestscanpurchaseourproductsviaourwebsiteordigitalappandthencollectthatproductfromaretaillocation;Back-backroom-ourstoreeducatorscanaccessinventorylocatedatourotherlocationsandhaveproductshippeddirectlytoaguestsad

68、dressorastore;2Shipfromstoreweareabletofulfille-commerceordersbyaccessinginventoryatbothourdistributioncentersandatourretaillocations,expandingthepoolofaccessibleinventory;Returnsprocessinge-commerceguestsareabletoreturnproductseitheronlineorin-store;andOneinventorypoolweareabletoviewandallocatethep

69、roductheldatourdistributioncenterstoeitherourphysicalretaillocations,ormakeitavailabletofulfillonlinedemand.Weoperateacombinationofphysicalretaillocationsande-commerceservicesviaourwebsites,otherregion-specificwebsites,digitalmarketplaces,andmobileapps.Ourphysicalretaillocationsremainakeypartofourgr

70、owthstrategyandweviewthemasavaluabletoolinhelpingusbuildourbrandandproductlineaswellasenablingouromni-channelcapabilities.Weplantocontinuetoexpandsquarefootageandopennewcompany-operatedstorestosupportourgrowthobjectives.AmericasWehaveoperatedintheAmericasforover25years.WeopenedourfirsteverstoreinVan

71、couver,Canadain1998.In2023,thenetrevenuewegeneratedintheAmericasrepresented79%ofourtotalnetrevenue.202320222021(Inthousands)Netrevenue$7,631,647$6,817,454$5,299,906Netrevenuegrowth 11.9%28.6%40.3%OuroperationsintheAmericasarecoretoourbusinessandweaimtocontinuetogrowournetrevenueinthismarketthroughon

72、goingproductinnovationandbybuildingbrandawareness.Wealsoplantocontinuetoinvestinouromni-channelcapabilities,toopennewretaillocations,andtorelocate,optimize,andrenovateourexistinglocationsasneeded.WegeneratenetrevenueintheAmericasthroughourlululemonbrandedretaillocationswhichincludedifferentsizesofco

73、mpany-operatedstores,outlets,pop-ups,othertemporarylocations,andstoresoperatedbyathird-partyunderasupplyandlicenseagreementinMexico.Wealsoserveourguestsviaoure-,ourmobileapp,our“LikeNew”re-commerceprogram,andthroughcertainwholesalearrangementsincludingcertainyogaandfitnessstudios,universitycampusret

74、ailers,andotherselectpartners.ChinaMainlandWeopenedourfirststoreinChinaMainlandinfiscal2014.In2023,thenetrevenuewegeneratedinChinaMainlandrepresented10%ofourtotalnetrevenue.202320222021(Inthousands)Netrevenue$963,760$576,503$434,261Netrevenuegrowth 67.2%32.8%80.3%Wehaveexperiencedsignificantnetreven

75、uegrowthinChinaMainlandandbelievethataswecontinuetoexpandouroperationsandbuildourbrandawareness,netrevenuewillcontinuetoincreaseinthismarket.WebelieveChinaMainlandnetrevenuegrowthwilldriveanincreaseinouroverallinternationalnetrevenue.WeplantocontinuetoinvestinChinaMainlandandexpectthatthemajorityofo

76、urcompany-operatedstoreopeningsin2024willbeinthismarket.WeoperatelululemonbrandedretaillocationsinChinaMainlandinavarietyofdifferentformatsincludingdifferentsizesofcompany-operatedstores,outlets,pop-ups,andothertemporarylocations.WealsoserveourguestsviaourWeChatstoreandonthirdpartymarketplacessuchas

77、T-MallandJD.com.3RestofWorldIn2023,thenetrevenuewegeneratedinAPACandEMEArepresented11%ofourtotalnetrevenue.202320222021(Inthousands)Netrevenue$1,023,871$716,561$522,450Netrevenuegrowth 42.9%37.2%36.3%WehaveexperiencedsignificantnetrevenuegrowthinAPACandEMEAandintendtocontinuetoinvestinthesemarketsto

78、buildbrandawareness.Whereweidentifygrowthopportunities,weplantoopennewretaillocations,includinginnewmarketsacrosstheEMEAandAPACregions.Weoperatelululemonbrandedretaillocationsinthesemarketsinavarietyofdifferentformatsincludingdifferentsizesofcompany-operatedstores,outlets,pop-ups,andstoresoperatedby

79、third-partiesundersupplyandlicenseagreementsintheMiddleEastandIsrael.Wealsoserveourguestsviaourcountryspecificwebsites,ourmobileapp,andthroughthirdpartyregionalmarketplaces,suchasZalando,Lazada,andSSG.OurSellingChannelsWeconductourbusinessthroughanumberofdifferentchannelsineachmarket:Company-operate

80、dstores:Inadditiontoservingasavenuetosellourproducts,ourstoresgiveusadirectconnectiontoourguests,whichweviewasavaluabletoolinhelpingusbuildourbrandandproductlinesaswellasenablingouromni-channelcapabilities.Ourretailstoresarelocatedprimarilyonstreetlocations,inlifestylecenters,andinmalls.Oursalespers

81、quarefootwas$1,609,$1,580,and$1,443for2023,2022,and2021respectively.UnitedStates367 350Canada71 69Americas438 419ChinaMainland127 99Australia33 32SouthKorea19 16HongKongSAR9 9Japan8 7NewZealand8 8Taiwan8 7Singapore7 8Malaysia3 2MacauSAR2 2Thailand1 APAC98 91Numberofcompany-operatedstoresbymarketJanu

82、ary28,2024January29,20234UnitedKingdom20 20Germany9 10France6 4Ireland4 4Spain3 3Netherlands2 1Sweden2 2Norway1 1Switzerland1 1EMEA48 46Totalcompany-operatedstores711 655Numberofcompany-operatedstoresbymarketJanuary28,2024January29,2023E-commerce:Webelievee-commerceisconvenientforourguestsandalsoall

83、owsustoreachandserveguestsinmarketsbeyondwhereourphysicalretaillocationsarebased.Webelievethischanneliseffectiveinbuildingbrandawareness,especiallyinnewmarkets.Weserveourguestsviaoure-commercewebsites,othercountryandregion-specificwebsites,digitalmarketplaces,andmobileapps.E-commercenetrevenueinclud

84、esourbuyonlinepick-upinstore,back-backroom,andshipfromstoreomni-channelretailingcapabilities.Otherchannels:Wealsousecertainotherdistributionchannels,generallywiththegoalofbuildingbrandawarenessandprovidingbroaderaccesstoourproducts.Theseotherchannelsinclude:Temporarylocations-Ourseasonalstoresandpop

85、-upsaretypicallyopenedforashortperiodoftimeenablingustoserveguestsduringpeakshoppingperiodsinmarketswherewedonotordinarilyhaveaphysicallocation,ortoexpandaccessinmarketswhereweseehighdemandatourexistinglocations.Wholesale-Weselltopartnersthatofferconvenientaccessforbothcoreandnewguests,includingyoga

86、andfitnessstudios,universitycampusretailers,andotherselectpartners.Outlets-Weutilizeoutletstosellslowermovinginventoryandinventoryfrompriorseasonsatdiscountedprices.AsofJanuary28,2024,weoperated47outlets,themajorityofwhichwereintheAmericas.LikeNew-Ourre-commerceprogramallowsgueststoexchangetheirgent

87、lyusedlululemonproductsformerchandisecredit.T.Webelievethisprogramisasteptowardsacirculareco-systemandhelpsreduceourenvironmentalfootprint.Licenseandsupplyarrangements-Weenterintolicenseandsupplyarrangementswhenwebelieveitwillbetoouradvantagetopartnerwiththirdpartieswithsignificantexperienceandprove

88、nsuccessincertaintargetmarkets.Underthesearrangementswehavegrantedcertainthirdpartiestherighttooperatelululemonbrandedretaillocationsandtoselllululemonproductsonwebsitesinspecificcountries.NumberofretaillocationsoperatedbythirdpartiesbymarketJanuary28,2024January29,2023Mexico15 12UnitedArabEmirates8

89、 7SaudiArabia6 3Israel3 Kuwait3 1Qatar3 3Bahrain1 Totallocationsoperatedbythirdpartiesunderlicenseandsupplyarrangements39 265IntegratedMarketingWebelievethatourbrandawarenessisrelativelylow,especiallyoutsideoftheAmericas,andalsowithourmaleguests.Thisrepresentsanopportunityforusandwehaveamulti-facete

90、dstrategytobuildbrandawareness,affinity,andguestloyalty.Thisstrategyisdesignedtoleverageownedandpaidchannels,ourambassadornetwork,brandpartners,events,andcontenttodriveawareness,consideration,engagement,conversion,andultimatelyloyaltyandengagementattheglobal,regional,andlocallevels.ProductDesignandD

91、evelopmentOurproductdesignanddevelopmenteffortsareledbyateamofresearchers,scientists,engineers,anddesigners.Ourteamiscomprisedofathletesandusersofourproductswhoembodyourdesignphilosophyanddedicationtopremiumquality.Ourdesignanddevelopmentteamidentifiestrendsbasedonmarketintelligenceandresearch,proac

92、tivelyseekstheinputofourguestsandourambassadors,andbroadlyseeksinspirationconsistentwithourgoalsoffunction,style,andtechnicalsuperiority.Aswestrivetocontinuetoprovideourguestswithtechnicallyadvancedfabrics,ourteamworkscloselywithoursupplierstoincorporatethelatestintechnicalinnovation,bringingparticu

93、larspecificationstoourproducts.Wepartnerwithindependentinspection,verification,andtestingcompanies,whoconductavarietyoftestsonourfabrics,testingperformancecharacteristicsincludingpilling,shrinkage,abrasionresistance,andcolorfastness.Wedevelopproprietaryfabricsandcollaboratewithleadingfabricandtrimss

94、upplierstomanufacturefabricsandtrimsthatwegenerallyseektoprotectthroughagreements,trademarks,andastrade-secrets.SourcingandManufacturingWedonotownoroperateanymanufacturingfacilities.Werelyonalimitednumberofsupplierstoprovidefabricsfor,andtoproduce,ourproducts.Thefollowingstatisticsarebasedoncost.Wew

95、orkwithagroupofapproximately49vendorsthatmanufactureourproducts,fiveofwhichproduced55%ofourproductsin2023,withthelargestmanufacturerproducing17%.During2023,42%ofourproductsweremanufacturedinVietnam,16%inCambodia,11%inSriLanka,10%inIndonesia,and8%inBangladesh,andtheremainderinotherregions.Weworkwitha

96、groupofapproximately67supplierstoprovidethefabricsforourproducts.In2023,52%ofourfabricswereproducedbyourtopfivefabricsuppliers,withthelargestmanufacturerproducing19%.During2023,40%ofourfabricsoriginatedfromTaiwan,26%fromChinaMainland,and12%fromSriLanka,andtheremainderfromotherregions.Wealsosourceoth

97、errawmaterialswhichareusedinourproducts,includingitemssuchascontentlabels,elastics,buttons,clasps,anddrawcordsfromsupplierslocatedpredominantlyinAPACandChinaMainland.Wehavedevelopedlong-standingrelationshipswithanumberofourvendorsandtakecaretoensurethattheyshareourcommitmenttoqualityandethics.Wedono

98、t,however,haveanylong-termcontractswiththemajorityofoursuppliersormanufacturingsourcesfortheproductionandsupplyofourfabricsandgarments,andwecompetewithothercompaniesforfabrics,rawmaterials,andproduction.WerequirethatallofoursuppliersandmanufacturersadheretoourVendorCodeofEthicsregardingsocialandenvi

99、ronmentalsustainabilitypractices.OurproductqualityandsustainabilityteamscloselyassessandmonitoreachsupplierscompliancewithapplicablelawsandourVendorCodeofEthics,includingbypartneringwithleadinginspectionandverificationfirms.DistributionFacilitiesWeoperateanddistributefinishedproductsfromourdistribut

100、ionfacilitiesintheUnitedStates,Canada,andAustralia.WeownourdistributioncenterinGroveport,Ohio,andleaseourotherdistributionfacilities.Wealsoutilizethird-partylogisticsprovidersinanumberofcountriesinwhichweoperatetowarehouseanddistributefinishedproductsfromtheirwarehouselocations.Weregularlyevaluateou

101、rdistributioninfrastructureandconsolidateorexpandourdistributioncapacityaswebelieveappropriateforouroperationsandtomeetanticipatedneeds.CompetitionCompetitionintheathleticapparelindustryisbasedprincipallyonbrandimageandrecognitionaswellasproductquality,innovation,style,distribution,andprice.Webeliev

102、ewesuccessfullycompeteonthebasisofourpremiumbrandimageandourtechnicalproductinnovation.Wealsobelieveourabilitytointroducenewproductinnovations,combinefunctionandfashion,andconnectthroughin-store,online,andcommunityexperiencessetsusapartfromourcompetition.In6addition,webelieveourverticalretaildistrib

103、utionstrategyandcommunity-basedmarketingdifferentiatesusfurther,allowingustomoreeffectivelycontrolourbrandimageandconnectwithourguests.Themarketforathleticapparelishighlycompetitive.Itincludesincreasingcompetitionfromestablishedcompaniesthatareexpandingtheirproductionandmarketingofperformanceproduct

104、s,aswellasfromfrequentnewentrantstothemarket.Weareindirectcompetitionwithwholesalersanddirectsellersofathleticapparelandfootwear,suchasNike,Inc.,adidasAG,PUMA,UnderArmour,Inc.,andColumbiaSportswearCompany.WealsocompetewithretailerswhohaveexpandedtoincludewomensathleticapparelincludingTheGap,Inc.(inc

105、ludingtheAthletabrand),VictoriasSecretwithitssportandloungeoffering,andUrbanOutfitters,Inc.SeasonalityOurbusinessisaffectedbythegeneralseasonaltrendscommontotheretailapparelindustry.Ourannualnetrevenueistypicallyweightedmoreheavilytowardourfourthfiscalquarter,reflectingourhistoricalstrengthinsalesdu

106、ringtheholidayseasonintheAmericas,whileouroperatingexpensesaregenerallymoreequallydistributedthroughouttheyear.Asaresult,asubstantialportionofouroperatingprofitsaretypicallygeneratedinthefourthquarterofourfiscalyear.Forexample,wegeneratedapproximately43%ofourfullyearoperatingprofitduringthefourthqua

107、rterof2023.HumanCapitalOurImpactAgendasetsoutoursocialandenvironmentalgoalsandstrategyacrossthreepillars-BeHuman,BeWell,andBePlanet.DetailscanbefoundinourImpactReportonourwebsite(https:/ December2037Milton,ON,CanadaDistributionCenter255,000 May2031Mississauga,ON,CanadaDistributionCenter250,000 Septe

108、mber2033Ravenhall,VIC,AustraliaDistributionCenter250,000 September2033Delta,BC,CanadaDistributionCenter155,000 January2031Sumner,WA,UnitedStatesDistributionCenter150,000 July2025Vancouver,BC,CanadaExecutiveandAdministrativeOffices120,000 October2032During2021,weenteredintoanewleaseforaU.S.distributi

109、oncenterinOntario,Californiaofapproximately1,255,000squarefeetwhichexpiresin2039.Weexpectthisdistributioncentertobeoperationalinearlyfiscal2024.During2022,weenteredintoanewleaseforaCanadiandistributioncenterinBrampton,Ontarioofapproximately980,000squarefeetwhichexpiresin2041.Weexpectthisdistribution

110、centertobeoperationalinfiscal2026.ITEM3.LEGALPROCEEDINGSPleaseseethelegalproceedingsdescribedinNote21.CommitmentsandContingenciesincludedinItem8ofPartIIofthisreport.ITEM4.MINESAFETYDISCLOSURESNotapplicable.24PARTIIITEM5.MARKETFORREGISTRANTSCOMMONEQUITY,RELATEDSTOCKHOLDERMATTERSANDISSUERPURCHASESOFEQ

111、UITYSECURITIESMarketInformationandDividendsOurcommonstockisquotedontheNasdaqGlobalSelectMarketunderthesymbolLULU.AsofMarch15,2024,therewereapproximately1,300holdersofrecordofourcommonstock.Thisdoesnotincludepersonswhosestockisinnomineeorstreetnameaccountsthroughbrokers.Wedonotanticipatepayinganycash

112、dividendsonourcommonstockintheforeseeablefuture.Anyfuturedeterminationastothepaymentofcashdividendswillbeatthediscretionofourboardofdirectorsandwilldependonourfinancialcondition,operatingresults,currentandanticipatedcashneeds,plansforexpansion,andotherfactorsthatourboardofdirectorsconsiderstoberelev

113、ant.Inaddition,financialandothercovenantsinanyinstrumentsoragreementsthatweenterintointhefuturemayrestrictourabilitytopaycashdividendsonourcommonstock.StockPerformanceGraphThegraphsetforthbelowcomparesthecumulativetotalstockholderreturnonourcommonstockbetweenFebruary3,2019(thedateofourfiscalyearendf

114、iveyearsago)andJanuary28,2024,withthecumulativetotalreturnof(i)theS&P500Indexand(ii)S&P500Apparel,Accessories&LuxuryGoodsIndex,overthesameperiod.Thisgraphassumestheinvestmentof$100onFebruary3,2019attheclosingsalepriceofourcommonstock,theS&P500IndexandtheS&PApparel,Accessories&LuxuryGoodsIndexandassu

115、mesthereinvestmentofdividends,ifany.Thecomparisonsshowninthegraphbelowarebasedonhistoricaldata.Wecautionthatthestockpriceperformanceshowninthegraphbelowisnotnecessarilyindicativeof,norisitintendedtoforecast,thepotentialfutureperformanceofourcommonstock.InformationusedinthegraphwasobtainedfromBloombe

116、rg,asourcebelievedtobereliable,butwearenotresponsibleforanyerrorsoromissionsinsuchinformation.ComparisonofCumulativeTotalStockholderReturnlululemonathleticainc.S&P500IndexS&P500Apparel,Accessories&LuxuryGoodsIndex03-Feb-1902-Feb-2031-Jan-2130-Jan-2229-Jan-2328-Jan-24$0.00$100.00$200.00$300.00$400.00

117、03-Feb-1902-Feb-2031-Jan-2130-Jan-2229-Jan-2328-Jan-24lululemonathleticainc.$100.00$163.83$224.94$216.20$212.74$327.15S&P500Index$100.00$119.18$137.23$163.75$150.40$180.71S&P500Apparel,Accessories&LuxuryGoodsIndex$100.00$90.30$86.51$83.79$59.05$47.7725IssuerPurchaseofEquitySecuritiesThefollowingtabl

118、eprovidesinformationregardingourpurchasesofsharesofourcommonstockduringthefourthquarterof2023relatedtoourstockrepurchaseprograms:Period(1)TotalNumberofSharesPurchased(2)AveragePricePaidperShareTotalNumberofSharesPurchasedasPartofPubliclyAnnouncedPlansorPrograms(2)MaximumDollarValueofSharesthatMayYet

119、BePurchasedUnderthePlansorPrograms(2)October30,2023-November26,202350,619$400.10 50,619$222,941,393November27,2023-December31,202310,040 507.57 10,040 1,217,845,403January1,2024-January28,202459,180 483.73 59,180 1,189,218,138Total119,839119,839_(1)Monthlyinformationispresentedbyreferencetoourfiscal

120、periodsduringourfourthquarterof2023.(2)OnMarch23,2022andNovember29,2023,ourboardofdirectorsapprovedstockrepurchaseprograms,eachforupto$1.0billionofourcommonsharesontheopenmarketorinprivatelynegotiatedtransactions.Therepurchaseplanshavenotimelimitanddonotrequiretherepurchaseofaminimumnumberofshares.C

121、ommonsharesrepurchasedontheopenmarketareatprevailingmarketprices,includingunderplanscomplyingwiththeprovisionsofRule10b5-1andRule10b-18oftheSecuritiesExchangeActof1934.Thetimingandactualnumberofcommonsharestoberepurchasedwilldependuponmarketconditions,eligibilitytotrade,andotherfactors.Theauthorized

122、valueofsharesavailabletoberepurchasedundertheseprogramsexcludesthecostofcommissionsandexcisetaxes.Thefollowingtablesummarizespurchasesofsharesofourcommonstockduringthefourthquarterof2023relatedtoourEmployeeSharePurchasePlan(ESPP):Period(1)TotalNumberofSharesPurchased(2)AveragePricePaidperShareTotalN

123、umberofSharesPurchasedasPartofPubliclyAnnouncedPlansorPrograms(2)MaximumNumberofSharesthatMayYetBePurchasedUnderthePlansorPrograms(2)October30,2023-November26,20237,367$418.18 7,367 4,415,983November27,2023-December31,20237,331 491.70 7,331 4,408,652January1,2024-January28,20245,954 482.84 5,954 4,4

124、02,698Total20,65220,652_(1)Monthlyinformationispresentedbyreferencetoourfiscalperiodsduringourfourthquarterof2023.(2)TheESPPwasapprovedbyourboardofdirectorsandstockholdersinSeptember2007.AllsharespurchasedundertheESPParepurchasedontheNasdaqGlobalSelectMarket(orsuchotherstockexchangeaswemaydesignate)

125、.UnlessourboardterminatestheESPPearlier,itwillcontinueuntilallsharesauthorizedforpurchasehavebeenpurchased.ThemaximumnumberofsharesauthorizedtobepurchasedundertheESPPwas6,000,000.Excludedfromthisdisclosurearesharesrepurchasedtosettlestatutoryemployeetaxwithholdingrelatedtothevestingofstock-basedcomp

126、ensationawards.ITEM6.SELECTEDCONSOLIDATEDFINANCIALDATANotapplicable.26ITEM7.MANAGEMENTSDISCUSSIONANDANALYSISOFFINANCIALCONDITIONANDRESULTSOFOPERATIONSManagementsdiscussionandanalysisoffinancialconditionandresultsofoperationsisprovidedasasupplementto,andshouldbereadinconjunctionwith,ourconsolidatedfi

127、nancialstatementsandtherelatednotesincludedelsewhereinthisAnnualReportonForm10-K.Componentsofmanagementsdiscussionandanalysisoffinancialconditionandresultsofoperationsinclude:OverviewFinancialHighlightsandMarketConditionsandTrendsResultsofOperationsComparisonof2023to2022Comparisonof2022to2021Compara

128、bleSalesandSalesPerSquareFootNon-GAAPFinancialMeasuresLiquidityandCapitalResourcesLiquidityOutlookContractualObligationsandCommitmentsCriticalAccountingPoliciesandEstimatesOurfiscalyearendsontheSundayclosesttoJanuary31ofthefollowingyear,typicallyresultingina52-weekyear,butoccasionallygivingrisetoana

129、dditionalweek,resultingina53-weekyear.Fiscal2023,2022,and2021wereeach52-weekyears.Fiscal2024willbea53-weekyear.Thisdiscussionandanalysiscontainsforward-lookingstatementsbasedoncurrentexpectationsthatinvolverisks,uncertaintiesandassumptions,suchasourplans,objectives,expectations,andintentionsincluded

130、intheSpecialNoteRegardingForward-LookingStatements.Ouractualresultsandthetimingofeventsmaydiffermateriallyfromthoseanticipatedintheseforward-lookingstatementsasaresultofvariousfactors,includingthosedescribedintheItem1A.RiskFactorssectionandelsewhereinthisAnnualReportonForm10-K.Weusecomparablesalesas

131、ametrictoevaluatetheperformanceofourbusiness.RefertotheComparableSalesandSalesPerSquareFootsectionofthismanagementsdiscussionandanalysisoffinancialconditionandresultsofoperationsforfurtherinformation.Weprovideconstantdollarchangesandadjustedfinancialresults,whicharenon-GAAPfinancialmeasures,assupple

132、mentalinformationthatenableevaluationoftheunderlyingtrendinouroperatingperformance,andenableacomparisontoourhistoricalfinancialinformation.RefertotheNon-GAAPFinancialMeasuressectionofthismanagementsdiscussionandanalysisoffinancialconditionandresultsofoperationsforreconciliationsbetweentheadjustednon

133、-GAAPfinancialmeasuresandthemostdirectlycomparablemeasurescalculatedinaccordancewithGAAP.Wedisclosematerialnon-publicinformationthroughoneormoreofthefollowingchannels:ourinvestorrelationswebsite(http:/ 100.0%100.0%100.0%Costofgoodssold4,009,873 3,618,178 2,648,052 41.7 44.6 42.3Grossprofit5,609,405

134、4,492,340 3,608,565 58.3 55.4 57.7Selling,generalandadministrativeexpenses3,397,218 2,757,447 2,225,034 35.3 34.0 35.6Impairmentofgoodwillandotherassets,restructuringcosts74,501 407,913 0.8 5.0 Amortizationofintangibleassets5,010 8,752 8,782 0.1 0.1 0.1Acquisition-relatedexpenses 41,394 0.7Gainondis

135、posalofassets(10,180)(0.1)Incomefromoperations2,132,676 1,328,408 1,333,355 22.2 16.4 21.3Otherincome(expense),net43,059 4,163 514 0.4 0.1 Incomebeforeincometaxexpense2,175,735 1,332,571 1,333,869 22.6 16.4 21.3Incometaxexpense625,545 477,771 358,547 6.5 5.9 5.7Netincome$1,550,190$854,800$975,322 16

136、.1%10.5%15.6%29Comparisonof2023to2022NetRevenueNetrevenueincreased$1.5billion,or19%,to$9.6billionin2023from$8.1billionin2022.Onaconstantdollarbasis,netrevenueincreased20%.Comparablesalesincreased13%,or14%onaconstantdollarbasis.TheincreaseinnetrevenuewasprimarilyduetoincreasedAmericasnetrevenue.China

137、MainlandandRestofWorldnetrevenuealsoincreased.Netrevenuefor2023and2022issummarizedbelow,andreflectsourupdatedsegments,includingcomparatives.2023202220232022Yearoveryearchange(Inthousands)(Percentageofnetrevenue)(Inthousands)(Percentage)(Constantdollarchange)Americas$7,631,647$6,817,454 79.3%84.1%$81

138、4,193 11.9%12.0%ChinaMainland963,760 576,503 10.0 7.1387,257 67.2 75.0RestofWorld1,023,871 716,561 10.6 8.8307,310 42.9 44.0Netrevenue$9,619,278$8,110,518 100.0%100.0%$1,508,760 18.6%20.0%Americas.TheincreaseinAmericasnetrevenuewasprimarilyduetoanincreaseincomparablesales,whichincreased8%,or9%onacon

139、stantdollarbasis.Theincreaseincomparablesaleswasprimarilyaresultofincreasedtraffic,partiallyoffsetbyalowerdollarvaluepertransactionandadecreaseinconversionrates.TheincreaseinAmericasnetrevenuewasalsodrivenbya$327.6millionincreaseinnon-comparablesales,primarilyfromourcompany-operatedstoresthatwereope

140、nedorsignificantlyexpandedsince2022aswellasincreasedoutlet,wholesale,andlicenseandsupplyarrangementnetrevenue,partiallyoffsetbyfewertemporarylocationsandlowerlululemonStudionetrevenue.ChinaMainland.TheincreaseinChinaMainlandnetrevenuewasprimarilyduetoanincreaseincomparablesales,whichincreased39%,or4

141、6%onaconstantdollarbasis.Theincreaseincomparablesaleswasprimarilyaresultofincreasedtraffic,partiallyoffsetbyadecreaseinconversionratesandalowerdollarvaluepertransaction.TheincreaseinChinaMainlandnetrevenuewasalsodrivenbya$180.6millionincreaseinnon-comparablesales,primarilyfromourcompany-operatedstor

142、esthatwereopenedorsignificantlyexpandedsince2022aswellasincreasednetrevenuefromoutlets.RestofWorld.TheincreaseinRestofWorldnetrevenuewasprimarilyduetoanincreaseincomparablesales,whichincreased32%,or33%onaconstantdollarbasis.Theincreaseincomparablesaleswasprimarilyaresultofincreasedtraffic,partiallyo

143、ffsetbyadecreaseinconversionrates.TheincreaseinRestofWorldnetrevenuewasalsodrivenbya$118.9millionincreaseinnon-comparablesales,primarilyfromourcompany-operatedstoresthatwereopenedorsignificantlyexpandedsince2022aswellasincreasedlicenseandsupplyarrangementsandoutletsnetrevenue.GrossProfit20232022Year

144、overyearchange(Inthousands)(Inthousands)(Percentage)Grossprofit$5,609,405$4,492,340$1,117,065 24.9%Grossmargin 58.3%55.4%290basispointsDuring2022,wedecidedtoshiftourlululemonStudiostrategytofocusonprovidingdigitalapp-basedservices.Whilewecontinuedtosellat-homehardwarein2023,wereachedthedecisiontocea

145、sesellingthelululemonStudioMirrorduringthethirdquarterof2023.Thesestrategyshiftsresultedintherecognitionofaninventoryobsolescenceprovisionof$62.9millionin2022andafurtherprovisionof$23.7millionin2023.Theseprovisionsreducedgrossmarginby80basispointsand30basispointsin2022and2023respectively.Pleaserefer

146、toNote8.ImpairmentofGoodwillandOtherAssets,RestructuringCostsincludedinItem8ofPartIIofthisreport.30Grossmarginincreased290basispoints,orexcludingtheimpactofthelululemonStudioobsolescenceprovisionsdetailedabove,increased240basispoints.This240basispointnetincreasewasprimarilyaresultof:anetincreaseinpr

147、oductmarginof290basispoints,primarilyduetolowerfreightcostsfromratereductionsandreducedairfreight,aswellaslowerdutycosts,modestlyoffsetbyhigherinventoryprovisionsandshrinkinthecurrentyear;anunfavorableimpactofforeigncurrencyexchangeratesof20basispoints;anddeleverageonoccupancycostsof20basispointsand

148、anincreaseincostsrelatedtoourdistributioncentersasapercentageofnetrevenueof10basispoints.Selling,GeneralandAdministrativeExpenses20232022Yearoveryearchange(Inthousands)(Inthousands)(Percentage)Selling,generalandadministrativeexpenses$3,397,218$2,757,447$639,771 23.2%Selling,generalandadministrativee

149、xpensesasapercentageofnetrevenue 35.3%34.0%130basispointsTheincreaseinselling,generalandadministrativeexpenseswasprimarilydueto:anincreaseinheadofficecostsof$327.7million,comprisedof:anincreaseinemployeecostsof$108.8millionprimarilyduetoincreasedsalariesandwagesexpenseaswellasincreasedstock-basedcom

150、pensationandincentivecompensation,primarilyasaresultofheadcountgrowthandincreasedwagerates;anincreaseinbrandandcommunitycostsof$95.4millionprimarilyduetoincreasedmarketingexpenses;anincreaseindepreciationof$46.0million;anincreaseinotherheadofficecostsof$40.4million,primarilyduetoincreasedprofessiona

151、lfees;andanincreaseintechnologycosts,includingcloudcomputingamortization,of$37.1million.anincreaseincostsrelatedtoouroperatingchannelsof$319.1million,comprisedof:anincreaseinemployeecostsof$145.1millionprimarilyduetoincreasedsalariesandwagesexpense,incentivecompensation,andbenefitcostsforretailemplo

152、yees,primarilyfromthegrowthinourbusinessandincreasedwagerates;anincreaseinotheroperatingcostsof$67.7millionprimarilyduetoincreaseddepreciationcosts,technologycosts,andrepairsandmaintenancecosts;anincreaseinvariablecostsof$66.8millionprimarilyduetoincreasedcreditcardfees,distributioncosts,andpackagin

153、gcosts,primarilyasaresultofincreasednetrevenue;andanincreaseinbrandandcommunitycostsof$39.5millionprimarilyduetoincreaseddigitalmarketingexpenses.Theincreaseinselling,generalandadministrativeexpenseswaspartiallyoffsetbyadecreaseinnetforeigncurrencyexchangeandderivativerevaluationlossesof$7.0million.

154、31ImpairmentofGoodwillandOtherAssets,RestructuringCosts20232022Yearoveryearchange(Inthousands)(Inthousands)(Percentage)Impairmentofgoodwillandotherassets,restructuringcosts$74,501$407,913$(333,412)(81.7)%During2023,werecognizedcertainassetimpairmentsandrestructuringcosts,andduring2022,werecognizedim

155、pairmentofgoodwillandotherassets,eachinrelationtolululemonStudio.PleaserefertoNote8.ImpairmentofGoodwillandOtherAssets,RestructuringCostsincludedinItem8ofPartIIofthisreportforfurtherinformation.AmortizationofIntangibleAssets20232022Yearoveryearchange(Inthousands)(Inthousands)(Percentage)Amortization

156、ofintangibleassets$5,010$8,752$(3,742)(42.8)%TheamortizationofintangibleassetswasprimarilytheresultoftheamortizationofintangibleassetsrecognizedupontheacquisitionofMIRROR,whichwerebrandedaslululemonStudio.GainonDisposalofAssets20232022Yearoveryearchange(Inthousands)(Inthousands)(Percentage)Gainondis

157、posalofassets$(10,180)$10,180(100.0)%Duringthesecondquarterof2022,wecompletedthesaleofanadministrativeofficebuilding,whichresultedinapre-taxgainof$10.2million.IncomefromOperationsOnasegmentbasis,wedetermineincomefromoperationswithouttakingintoaccountourgeneralcorporateexpensesandcertainotherexpenses

158、.Segmentedincomefromoperationsissummarizedbelow.Ourprioryearsegmentresultshavebeenrecasttoreflectournewsegmentreportingstructure.2023202220232022Yearoveryearchange(Inthousands)(Percentageofnetrevenueofrespectiveoperatingsegment)(Inthousands)(Percentage)Segmentedincomefromoperations:Americas$2,937,18

159、4$2,503,740 38.5%36.7%$433,444 17.3%ChinaMainland337,316196,865 35.0 34.1140,451 71.3RestofWorld201,832103,204 19.7 14.498,628 95.6$3,476,332$2,803,809$672,523 24.0%Generalcorporateexpenses 1,240,436 1,005,988234,448 23.3lululemonStudioobsolescenceprovision23,70962,928(39,219)(62.3)Impairmentofgoodw

160、illandotherassets,restructuringcosts74,501407,913(333,412)(81.7)Amortizationofintangibleassets5,0108,752(3,742)(42.8)Gainondisposalofassets(10,180)10,180(100.0)Incomefromoperations$2,132,676$1,328,408$804,268 60.5%Operatingmargin 22.2%16.4%580basispointsAmericas.TheincreaseinAmericasincomefromoperat

161、ionswasprimarilytheresultofincreasedgrossprofitof$691.7million,drivenbyincreasednetrevenueandhighergrossmargin.Theincreaseingrossmarginwasprimarilyduetohigherproductmargin,partiallyoffsetbydeleverageondistributioncentercosts.Theincreaseingrossprofitwaspartiallyoffsetbyanincreaseinselling,generalanda

162、dministrativeexpenses,primarilyduetohigheremployeecosts,increaseddigitalmarketingexpenses,increasedcreditcardfees,packagingcosts,anddistributioncostsdrivenbyhighernetrevenue,and32increaseddepreciation,andtechnologycosts.IncomefromoperationsasapercentageofAmericasnetrevenueincreasedduetohighergrossma

163、rgin,partiallyoffsetbydeleverageonselling,generalandadministrativeexpenses.ChinaMainland.TheincreaseinChinaMainlandincomefromoperationswasprimarilytheresultofincreasedgrossprofitof$228.1million,drivenbyincreasednetrevenue.Grossmarginwasconsistentyearoveryear,primarilyduetoleverageonoccupancyandother

164、costs,partiallyoffsetbyunfavorableforeigncurrencyexchangeratesandlowerproductmargin.Theincreaseingrossprofitwaspartiallyoffsetbyanincreaseinselling,generalandadministrativeexpensesprimarilyduetohigheremployeecosts,aswellasincreaseddigitalmarketingexpenses,increasedpackagingcosts,distributioncosts,an

165、dcreditcardfeesdrivenbyhighernetrevenue,andincreasedtechnologycosts.IncomefromoperationsasapercentageofChinaMainlandnetrevenueincreasedduetoleverageonselling,generalandadministrativeexpenses.RestofWorld.TheincreaseinRestofWorldincomefromoperationswasprimarilytheresultofincreasedgrossprofitof$190.2mi

166、llion,drivenbyincreasednetrevenueandhighergrossmargin.Theincreaseingrossmarginwasprimarilyduetohigherproductmarginaswellasleverageonoccupancyandothercosts,partiallyoffsetbyunfavorableforeigncurrencyexchangerates.Theincreaseingrossprofitwaspartiallyoffsetbyanincreaseinselling,generalandadministrative

167、expensesprimarilyduetohigheremployeecosts,aswellasincreaseddigitalmarketingexpenses,increaseddistributioncosts,creditcardfees,andpackagingcostsdrivenbyhighernetrevenue,andincreasedtechnologycosts.IncomefromoperationsasapercentageofRestofWorldnetrevenueincreasedduetohighergrossmarginandleverageonsell

168、ing,generalandadministrativeexpenses.GeneralCorporateExpenses.Theincreaseingeneralcorporateexpenseswasprimarilyduetoincreasedemployeecosts,aswellasincreasedbrandandcommunitycosts,depreciation,technologycosts,professionalfees,andproductteamcosts.Theincreaseingeneralcorporateexpenseswaspartiallyoffset

169、byadecreaseinnetforeigncurrencyexchangeandderivativelossesof$7.0million.OtherIncome(Expense),Net20232022Yearoveryearchange(Inthousands)(Inthousands)(Percentage)Otherincome(expense),net$43,059$4,163$38,896 934.3%Theincreaseinotherincome,netwasprimarilyduetoanincreaseininterestincomeasaresultofhigherc

170、ashbalancesandhigherinterestrates.IncomeTaxExpense20232022Yearoveryearchange(Inthousands)(Inthousands)(Percentage)Incometaxexpense$625,545$477,771$147,774 30.9%Effectivetaxrate 28.8%35.9%(710)basispointsThedecreaseintheeffectivetaxratewasprimarilyduetheincometaximpactofcertainnon-deductibleimpairmen

171、tandotherchargesrecognizedin2022and2023relatedtolululemonStudio,partiallyoffsetbyalowertaxrateonthegainonthesaleofanadministrativebuildingin2022.Theseitemsincreasedtheeffectivetaxrateby780basispointsand10basispointsin2022and2023,respectively.Excludingtheincometaxeffectsoftheimpairmentandothercharges

172、recognizedin2022and2023inrelationtolululemonStudio,andexcludingthetaxeffectofthegainonthesaleoftheadministrativebuildingin2022,theadjustedeffectivetaxrateincreasedto28.7%in2023from28.1%in2022.Theincreaseintheadjustedeffectivetaxratewasprimarilyduetowithholdingtaxesonunremittedearningswhicharenotcons

173、ideredtobepermanentlyreinvested,partiallyoffsetbyadjustmentsuponthefilingofcertainincometaxreturns,andadecreaseinU.S.statetaxes.NetIncome20232022Yearoveryearchange(Inthousands)(Inthousands)(Percentage)Netincome$1,550,190$854,800$695,390 81.4%33Theincreaseinnetincomein2023wasprimarilyduetoanincreasei

174、ngrossprofitof$1.1billion,anincreaseinotherincome(expense),netof$38.9million,andimpairmentandrestructuringchargesrecognizedin2023of$74.5millioncomparedtoimpairmentchargesof$407.9millionrecognizedin2022,partiallyoffsetbyanincreaseinselling,generalandadministrativeexpensesof$639.8million,anincreaseini

175、ncometaxexpenseof$147.8million,andagainondisposalofassetsof$10.2millionintheprioryear.Excludingcertaininventoryprovisions,goodwillandotherassetimpairments,andrestructuringcostsrecognizedinrelationtolululemonStudioin2023and2022andthegainonsaleofanadministrativebuildingin2022,andtheirtaxeffects,adjust

176、ednetincomeincreased$333.4millionor26%.Comparisonof2022to2021NetRevenueNetrevenueincreased$1.9billion,or30%,to$8.1billionin2022from$6.3billionin2021.Onaconstantdollarbasis,netrevenueincreased32%.Comparablesalesincreased25%,or28%onaconstantdollarbasis.Theincreaseinnetrevenuewasprimarilyduetoincreased

177、Americasnetrevenue.ChinaMainlandandRestofWorldnetrevenuealsoincreased.Netrevenuefor2022and2021issummarizedbelow,andreflectsourupdatedsegments,includingcomparatives.2022202120222021Yearoveryearchange(Inthousands)(Percentageofnetrevenue)(Inthousands)(Percentage)(Constantdollarchange)Americas$6,817,454

178、$5,299,906 84.1%84.7%$1,517,548 28.6%30.0%ChinaMainland576,503 434,261 7.1 6.9142,242 32.8 40.0RestofWorld716,561 522,450 8.8 8.4194,111 37.2 49.0Netrevenue$8,110,518$6,256,617 100.0%100.0%$1,853,901 29.6%32.0%Americas.TheincreaseinAmericasnetrevenuewasprimarilyduetoanincreaseincomparablesales,which

179、increased28%,or29%onaconstantdollarbasis.Theincreaseincomparablesaleswasprimarilyaresultofincreasedtraffic,partiallyoffsetbyadecreaseinconversionrates.Americasnetrevenuealsoincreasedduetoa$296.9millionincreaseinnon-comparablesales,primarilyfromourcompany-operatedstoresthatwereopenedorsignificantlyex

180、pandedsince2021aswellasincreasedoutlet,wholesale,andre-commercenetrevenue,partiallyoffsetbylowerlicenseandsupplyarrangementandlululemonStudionetrevenue.ChinaMainland.TheincreaseinChinaMainlandnetrevenuewasprimarilyduetoanincreaseincomparablesales,whichincreased17%,or23%onaconstantdollarbasis.Theincr

181、easeincomparablesaleswasprimarilyaresultofincreasedtraffic,partiallyoffsetbyadecreaseinconversionrates.TheincreaseinChinaMainlandnetrevenuewasalsodrivenbya$77.5millionincreaseinnon-comparablesales,primarilyfromourcompany-operatedstoresthatwereopenedorsignificantlyexpandedsince2021.RestofWorld.Theinc

182、reaseinRestofWorldnetrevenuewasprimarilyduetoa$151.5millionincreaseinnon-comparablesales,primarilyfromourcompany-operatedstoresthatwereopenedorsignificantlyexpandedsince2021aswellasincreasedlicenseandsupplyarrangements,outlets,andwholesalenetrevenue.TheincreaseinRestofWorldnetrevenuewasalsodrivenbya

183、nincreaseincomparablesales,whichincreased10%,or19%onaconstantdollarbasis.Theincreaseincomparablesaleswasprimarilyaresultofincreasedtraffic,partiallyoffsetbyadecreaseinconversionrates.GrossProfit20222021Yearoveryearchange(Inthousands)(Inthousands)(Percentage)Grossprofit$4,492,340$3,608,565$883,775 24

184、.5%Grossmargin 55.4%57.7%(230)basispoints34During2022,weupdatedourlululemonStudiostrategytofocusondigitalapp-basedservices,whichmeantwenolongerexpectedtobeabletosellallofthein-homehardwareinventoryabovecost.Werecognizedaprovisionof$62.9millionagainsthardwareinventoryduring2022.Thisreduced2022grossma

185、rginby80basispoints.PleaserefertoNote8.ImpairmentofGoodwillandOtherAssets,RestructuringCostsincludedinItem8ofPartIIofthisreport.Theremaining150basispointdecreaseingrossmarginwasprimarilytheresultof:adecreaseinproductmarginof100basispointsprimarilyduetohighermarkdowns,salesmix,andincreaseddamagesands

186、hrink,partiallyoffsetbylowerairfreightcosts;anincreaseincostsrelatedtoourproductdepartmentsanddistributioncentersasapercentageofnetrevenueof60basispoints;andanunfavorableimpactofforeigncurrencyexchangeratesof40basispoints.Thedecreaseingrossmarginwaspartiallyoffsetbyleverageonoccupancyanddepreciation

187、costsof50basispoints,drivenprimarilybytheincreaseinnetrevenue.Selling,GeneralandAdministrativeExpenses20222021Yearoveryearchange(Inthousands)(Inthousands)(Percentage)Selling,generalandadministrativeexpenses$2,757,447$2,225,034$532,413 23.9%Selling,generalandadministrativeexpensesasapercentageofnetre

188、venue 34.0%35.6%(160)basispointsTheincreaseinselling,generalandadministrativeexpenseswasprimarilydueto:anincreaseinheadofficecostsof$283.7million,comprisedof:anincreaseincostsof$142.2millionprimarilyduetoincreaseddepreciationof$43.5millionandincreasedtechnologycosts,includingcloudcomputingamortizati

189、on,of$35.7million,aswellasincreasedbrandandcommunitycostsandprofessionalfees;andanincreaseinemployeecostsof$141.5millionprimarilyduetoanincreaseinsalariesandwagesexpenseof$76.5millionandincentivecompensationof$34.8million,aswellasincreasedstock-basedcompensationexpenseandtravelcosts,primarilyasaresu

190、ltofheadcountgrowthandincreasedwagerates.anincreaseincostsrelatedtoouroperatingchannelsof$249.5million,comprisedof:anincreaseinvariablecostsof$127.6millionprimarilyduetoanincreaseindistributioncostsandcreditcardfees,primarilyasaresultofincreasednetrevenue;anincreaseinemployeecostsof$104.2millionprim

191、arilyduetoanincreaseinsalariesandwagesexpenseandincentivecompensationinourcompany-operatedstoreande-commercechannels,primarilyduetogrowthinourbusinessandincreasedwagerates;anincreaseinothercostsof$15.3millionprimarilyduetoanincreaseinrepairsandmaintenancecosts,depreciation,andtechnologycosts,partial

192、lyoffsetbyadecreaseinprofessionalfees;andanincreaseinbrandandcommunitycostsof$2.4millionprimarilyduetoanincreaseindigitalmarketingexpensesrelatedtooure-commercechannel,partiallyoffsetbyadecreaseinmarketingexpensesrelatedtolululemonStudio.Theincreaseinselling,generalandadministrativeexpenseswaspartia

193、llyoffsetbyadecreaseinnetforeignexchangeandderivativerevaluationlossesof$0.8million.35ImpairmentofGoodwillandOtherAssets,RestructuringCosts20222021Yearoveryearchange(Inthousands)(Inthousands)(Percentage)Impairmentofgoodwillandotherassets,restructuringcosts$407,913$407,913n/aDuring2022,werecognizedan

194、impairmentofgoodwillandotherlong-livedassetsinrelationtoourlululemonStudiobusinessunit.PleaserefertoNote8.ImpairmentofGoodwillandOtherAssets,RestructuringCostsincludedinItem8ofPartIIofthisreport.AmortizationofIntangibleAssets20222021Yearoveryearchange(Inthousands)(Inthousands)(Percentage)Amortizatio

195、nofintangibleassets$8,752$8,782$(30)(0.3)%TheamortizationofintangibleassetswasprimarilytheresultoftheamortizationofintangibleassetsrecognizedupontheacquisitionofMIRROR,whichwerebrandedaslululemonStudio.Acquisition-RelatedExpenses20222021Yearoveryearchange(Inthousands)(Inthousands)(Percentage)Acquisi

196、tion-relatedexpenses$41,394$(41,394)(100.0)%InconnectionwithouracquisitionofMIRROR,werecognizedacquisition-relatedcompensationexpensesof$38.4millionandtransactionandintegrationrelatedcostsof$3.0millionin2021.Therewerenoacquisition-relatedexpensesin2022.PleaserefertoNote9.Acquisition-RelatedExpensesi

197、ncludedinItem8ofPartIIofthisreportforfurtherinformation.GainonDisposalofAssets20222021Yearoveryearchange(Inthousands)(Inthousands)(Percentage)Gainondisposalofassets$(10,180)$(10,180)n/aDuringthesecondquarterof2022,wecompletedthesaleofanadministrativeofficebuilding,whichresultedinapre-taxgainof$10.2m

198、illion.36IncomefromOperationsOnasegmentbasis,wedetermineincomefromoperationswithouttakingintoaccountourgeneralcorporateexpensesandcertainotherexpenses.Segmentedincomefromoperationsissummarizedbelow.Ourpriorsegmentresultshavebeenrecasttoreflectournewsegmentreportingstructure.2022202120222021Yearovery

199、earchange(Inthousands)(Percentageofnetrevenueofrespectiveoperatingsegment)(Inthousands)(Percentage)Segmentedincomefromoperations:Americas$2,503,740$1,867,016 36.7%35.2%$636,724 34.1%ChinaMainland196,865167,318 34.1 38.529,547 17.7RestofWorld103,20467,674 14.4 13.035,530 52.5$2,803,809$2,102,008$701,

200、801 33.4%Generalcorporateexpenses 1,005,988718,477287,511 40.0lululemonStudioobsolescenceprovision62,92862,928n/aImpairmentofgoodwillandotherassets,restructuringcosts407,913407,913n/aAmortizationofintangibleassets8,7528,782(30)(0.3)Acquisition-relatedexpenses41,394(41,394)(100.0)Gainondisposalofasse

201、ts(10,180)(10,180)n/aIncomefromoperations$1,328,408$1,333,355$(4,947)(0.4)%Operatingmargin 16.4%21.3%(490)basispointsAmericas.TheincreaseinAmericasincomefromoperationswasprimarilytheresultofincreasedgrossprofitof$855.2million,drivenbyincreasednetrevenue,partiallyoffsetbylowergrossmargin.Thedecreasei

202、ngrossmarginwasprimarilyduetolowerproductmargin,partiallyoffsetbyleverageonoccupancyandothercosts.Theincreaseingrossprofitwaspartiallyoffsetbyanincreaseinselling,generalandadministrativeexpenses,primarilyduetohigheremployeecosts,aswellasincreaseddistributioncostsandcreditcardfeesdrivenbyhighernetrev

203、enue,andincreasedtechnologycosts.IncomefromoperationsasapercentageofAmericasnetrevenueincreasedduetoleverageonselling,generalandadministrativeexpenses.ChinaMainland.TheincreaseinChinaMainlandincomefromoperationswasprimarilytheresultofincreasedgrossprofitof$70.4million,drivenbyincreasednetrevenue,par

204、tiallyoffsetbylowergrossmargin.Thedecreaseingrossmarginwasprimarilyduetounfavorableforeigncurrencyexchangeratesaswellasdeleverageondistributioncenterandothercosts.Theincreaseingrossprofitwaspartiallyoffsetbyanincreaseinselling,generalandadministrativeexpensesprimarilyduetohigheremployeecosts,aswella

205、sincreaseddigitalmarketingexpenses,increasedpackaginganddistributioncostsdrivenbyhighernetrevenue,andincreasedtechnologycosts.IncomefromoperationsasapercentageofChinaMainlandnetrevenuedecreasedprimarilyduetolowergrossmargin.RestofWorld.TheincreaseinRestofWorldincomefromoperationswasprimarilytheresul

206、tofincreasedgrossprofitof$80.9million,drivenbyincreasednetrevenue,partiallyoffsetbylowergrossmargin.Thedecreaseingrossmarginwasprimarilyduetounfavorableforeigncurrencyexchangeratesaswellaslowerproductmargin,partiallyoffsetbyleverageonoccupancyandothercosts.Theincreaseingrossprofitwaspartiallyoffsetb

207、yanincreaseinselling,generalandadministrativeexpensesprimarilyduetohigheremployeecosts,aswellasincreaseddistributioncosts,creditcardfees,andpackagingcostsdrivenbyhighernetrevenue,andincreaseddigitalmarketingexpenses.IncomefromoperationsasapercentageofRestofWorldnetrevenueincreasedduetoleverageonsell

208、ing,generalandadministrativeexpenses.GeneralCorporateExpenses.Theincreaseingeneralcorporateexpenseswasprimarilyduetohigheremployeecosts,aswellasincreaseddepreciation,brandandcommunitycosts,technologycosts,professionalfees,andproductteamcosts.Theincreaseingeneralcorporateexpenseswaspartiallyoffsetbya

209、decreaseinnetforeignexchangeandderivativelossesof$0.8million.37OtherIncome(Expense),Net20222021Yearoveryearchange(Inthousands)(Inthousands)(Percentage)Otherincome(expense),net$4,163$514$3,649 709.9%Theincreaseinotherincome,netwasprimarilyduetoanincreaseininterestincomefromhigherinterestrates,partial

210、lyoffsetbyanincreaseinotherexpenses.IncomeTaxExpense20222021Yearoveryearchange(Inthousands)(Inthousands)(Percentage)Incometaxexpense$477,771$358,547$119,224 33.3%Effectivetaxrate 35.9%26.9%900basispointsTheincreaseintheeffectivetaxratewasprimarilyduetocertainnon-deductibleexpensesrelatedtotheimpairm

211、entofgoodwillandotherassetsrecognizedinrelationtoourlululemonStudiobusinessunit(formerlyMIRROR)partiallyoffsetbythegainonsaleofanadministrativebuildingin2022whichincreasedtheeffectivetaxrateby780basispoints.Certainnon-deductibleexpensesrelatedtotheMIRRORacquisitionincreasedtheeffectivetaxrateby70bas

212、ispointsin2021.TheincreaseintheeffectivetaxratewasalsoduetotheaccrualofU.S.statetaxandCanadianwithholdingtaxesonunremittedearningswhicharenotconsideredtobepermanentlyreinvested,adjustmentsuponfilingofcertainincometaxreturns,andadecreaseindeductionsforstock-basedcompensation,partiallyoffsetbyadecreas

213、einnon-deductibleexpensesininternationaljurisdictions.ExcludingtheimpairmentofgoodwillandotherassetsrecognizedinrelationtoourlululemonStudiobusinessunit(formerlyMIRROR)andthegainonsaleofanadministrativebuildingin2022,andtheMIRRORacquisition-relatedexpensesin2021,andtheirtaxeffects,ouradjustedeffecti

214、vetaxrateswere28.1%and26.2%for2022and2021,respectively.NetIncome20222021Yearoveryearchange(Inthousands)(Inthousands)(Percentage)Netincome$854,800$975,322$(120,522)(12.4)%Thedecreaseinnetincomein2022wasprimarilyduetoanincreaseinselling,generalandadministrativeexpensesof$532.4million,animpairmentcharg

215、erecognizedin2022of$407.9million,anincreaseinincometaxexpenseof$119.2million,partiallyoffsetbyanincreaseingrossprofitof$883.8million,adecreaseinacquisition-relatedexpensesof$41.4million,againondisposalofassetsof$10.2million,andanincreaseinotherincome(expense),netof$3.6million.Excludingtheimpairmento

216、fgoodwillandotherassetsrecognizedinrelationtoourlululemonStudiobusinessunit(formerlyMIRROR)andthegainonsaleofanadministrativebuildingin2022,andtheMIRRORacquisition-relatedexpensesin2021,andtheirtaxeffects,adjustednetincomeincreased$273.7millionor27.0%.ComparableSalesandSalesPerSquareFootComparableSa

217、lesWeusecomparablesalestoevaluatetheperformanceofourcompany-operatedstoreande-commercebusinessesfromanomni-channelperspective.Itallowsustomonitortheperformanceofourbusinesswithouttheimpactofrecentlyopenedorexpandedstores.Webelieveinvestorswouldsimilarlyfindthesemetricsusefulinassessingtheperformance

218、ofourbusiness.Comparablesalesincludescomparablecompany-operatedstoreandalle-commercenetrevenue.E-commercenetrevenueincludesourbuyonlinepick-upinstore,back-backroom,andshipfromstoreomni-channelretailingcapabilitiesinadditiontoourwebsites,otherregion-specificwebsites,digitalmarketplaces,andmobileapps.

219、Comparablecompany-operatedstoreshavebeenopen,oropenafterbeingsignificantlyexpanded,foratleast12fullfiscalmonths.Netrevenuefromacompany-operatedstoreisincludedincomparablesalesbeginningwiththefirstfiscalmonthforwhichthestorehasafullfiscalmonthofsalesintheprioryear.Comparablesalesexcludessalesfromnews

220、toresthathavenotbeenopenforatleast12fullfiscalmonths,fromstoreswhichhavenotbeenintheirsignificantlyexpandedspaceforatleast12fullfiscalmonths,fromstoreswhichhavebeentemporarilyrelocatedforrenovationsortemporarilyclosed,andsalesfromcompany-38operatedstoresthathaveclosed.Comparablesalesalsoexcludessale

221、sfromoursellingchannelsotherthancompany-operatedstoresande-commerce.Thecomparablesalesmeasureswereportmaynotbeequivalenttosimilarlytitledmeasuresreportedbyothercompanies.Infiscalyearswith53weeks,the53rdweekofnetrevenueisexcludedfromthecalculationofcomparablesales.Intheyearfollowinga53-weekyear,thepr

222、ioryearperiodisshiftedbyoneweektocomparesimilarcalendarweeks.Non-comparablesalesincludesallnetrevenueotherthancomparablesales.SalesPerSquareFootWeusesalespersquarefoottoassesstheperformanceofourcompany-operatedstoresrelativetotheirsquarefootage.Webelievethatsalespersquarefootisusefulinevaluatingthep

223、erformanceofourcompany-operatedstores.Salespersquarefootiscalculatedusingtotalnetrevenuefromallcompany-operatedstoresdividedbytheaverageendingsquarefootageofthestoresforeachperiodduringtheyear.Infiscalyearswith53weeks,the53rdweekofnetrevenueisexcludedfromthecalculationofsalespersquarefoot.Thesquaref

224、ootageofourcompany-operatedstoresincludesallretailrelatedspace,includingsellingspaceaswellasstorageandback-officeareas.Thesalespersquarefootmetricwereportmaynotbeequivalenttosimilarlytitledmetricsreportedbyothercompanies.Non-GAAPFinancialMeasuresConstantdollarchangesandadjustedfinancialresultsarenon

225、-GAAPfinancialmeasures.Aconstantdollarbasisassumestheaverageforeigncurrencyexchangeratesfortheperiodremainedconstantwiththeaverageforeigncurrencyexchangeratesforthesameperiodoftheprioryear.Weprovideconstantdollarchangesinourresultstohelpinvestorsunderstandtheunderlyinggrowthrateofnetrevenueexcluding

226、theimpactofchangesinforeigncurrencyexchangerates.Adjustedgrossprofit,grossmargin,incomefromoperations,operatingmargin,incometaxexpense,effectivetaxrates,netincome,anddilutedearningspershareexcludecertaininventoryprovisions,goodwillandotherassetimpairments,andrestructuringcostsrecognizedinrelationtol

227、ululemonStudio,thegainondisposalofassetsforthesaleofanadministrativeofficebuilding,theMIRRORacquisition-relatedexpenses,andtherelatedincometaxeffectsoftheseitems.Webelievetheseadjustedfinancialmeasuresareusefultoinvestorsastheyprovidesupplementalinformationthatenableevaluationoftheunderlyingtrendino

228、uroperatingperformance,andenableacomparisontoourhistoricalfinancialinformation.Further,duetothefiniteanddiscretenatureoftheseitems,wedonotconsiderthemtobenormaloperatingexpensesthatarenecessarytorunourbusiness,orimpairmentsordisposalgainsthatareexpectedtoariseinthenormalcourseofouroperations.Managem

229、entusestheseadjustedfinancialmeasuresandconstantcurrencymetricsinternallywhenreviewingandassessingfinancialperformance.Thepresentationofthisfinancialinformationisnotintendedtobeconsideredinisolationorasasubstitutefor,orwithgreaterprominenceto,thefinancialinformationpreparedandpresentedinaccordancewi

230、thGAAP.Areconciliationofthenon-GAAPfinancialmeasuresfollows,whichincludesmoredetailontheGAAPfinancialmeasurethatismostdirectlycomparabletoeachnon-GAAPfinancialmeasure,andtherelatedreconciliationsbetweenthesefinancialmeasures.Ournon-GAAPfinancialmeasuresmaybecalculateddifferentlyfrom,andthereforemayn

231、otbedirectlycomparableto,similarlytitledmeasuresreportedbyothercompanies.39ConstantDollarChangesThebelowchangesinnetrevenueandcomparablesalesshowthechangecomparedtothecorrespondingperiodintheprioryear.2023Comparedto20222022Comparedto2021ChangeForeignexchangechangesChangeinconstantdollarsChangeForeig

232、nexchangechangesChangeinconstantdollarsNetRevenueAmericas 12%12%29%1%30%ChinaMainland 67 8 75 33 7 40RestofWorld 43 1 44 37 12 49Totalnetrevenue 19%1%20%30%2%32%Comparablesales(1)Americas 8%1%9%28%1%29%ChinaMainland 39 7 46 17 6 23RestofWorld 32 1 33 10 9 19Totalcomparablesales 13%1%14%25%3%28%_(1)C

233、omparablesalesincludescomparablecompany-operatedstoreande-commercenetrevenue.AdjustedFinancialMeasuresThefollowingtablesreconcilethemostdirectlycomparablemeasurescalculatedinaccordancewithGAAPwiththeadjustedfinancialmeasures.The2023and2022adjustmentsrelatetocertaininventoryprovisions,goodwillandothe

234、rassetimpairments,andrestructuringcostsrecognizedinrelationtolululemonStudio,andtheirrelatedtaxeffects.The2022adjustmentsalsorelatetothegainonsaleofanadministrativeofficebuilding,andtheirrelatedtaxeffects.The2021adjustmentsrelatetoMIRRORacquisition-relatedexpenses,andtheirrelatedtaxeffects.Pleaseref

235、ertoNote5.PropertyandEquipment,Note8.ImpairmentofGoodwillandOtherAssets,RestructuringCosts,andNote9.Acquisition-RelatedExpensesincludedinItem8ofPartIIofthisreportforfurtherinformationonthenatureoftheseamounts.2023GrossProfitGrossMarginIncomefromOperationsOperatingMarginIncomeTaxExpenseEffectiveTaxRa

236、teNetIncomeDilutedEarningsPerShare(Inthousands,exceptpershareamounts)GAAPresults$5,609,405 58.3%$2,132,676 22.2%$625,545 28.8%$1,550,190$12.20lululemonStudiocharges:lululemonStudioobsolescenceprovision23,709 0.323,709 0.223,709 0.19Impairmentofassets44,186 0.544,186 0.35Restructuringcosts30,315 0.33

237、0,315 0.24Taxeffectoftheabove26,085(0.1)(26,085)(0.21)23,709 0.398,210 1.026,085(0.1)72,125 0.57Adjustedresults(non-GAAP)$5,633,114 58.6%$2,230,886 23.2%$651,630 28.7%$1,622,315$12.77402022GrossProfitGrossMarginIncomefromOperationsOperatingMarginIncomeTaxExpenseEffectiveTaxRateNetIncomeDilutedEarnin

238、gsPerShare(Inthousands,exceptpershareamounts)GAAPresults$4,492,340 55.4%$1,328,408 16.4%$477,771 35.9%$854,800$6.68lululemonStudiocharges:lululemonStudioobsolescenceprovision62,928 0.862,928 0.862,928 0.49Impairmentofgoodwillandotherassets407,913 5.0407,913 3.19Taxeffectoftheabove28,171(7.8)(28,171)

239、(0.22)62,928 0.8470,841 5.828,171(7.8)442,670 3.46Gainondisposalofassets(10,180)(0.1)(10,180)(0.08)Taxeffectoftheabove(1,661)1,661 0.01Adjustedresults(non-GAAP)$4,555,268 56.2%$1,789,069 22.1%$504,281 28.1%$1,288,951$10.072021IncomefromOperationsOperatingMarginIncomeTaxExpenseEffectiveTaxRateNetInco

240、meDilutedEarningsPerShare(Inthousands,exceptpershareamounts)GAAPresults$1,333,355 21.3%$358,547 26.9%$975,322$7.49Transactionandintegrationcosts2,989 2,989 0.02Acquisition-relatedcompensation38,405 0.738,405 0.29Taxeffectoftheabove1,417(0.7)(1,417)(0.01)Adjustedresults(non-GAAP)$1,374,749 22.0%$359,

241、964 26.2%$1,015,299$7.79LiquidityandCapitalResourcesOurprimarysourcesofliquidityareourcurrentbalancesofcashandcashequivalents,cashflowsfromoperations,andcapacityunderourcommittedrevolvingcreditfacility,includingtofundshort-termworkingcapitalrequirements.Ourprimarycashneedsarecapitalexpendituresforop

242、eningnewstoresandremodelingorrelocatingexistingstores,investinginourdistributioncenters,investingintechnologyandmakingsystemenhancements,fundingworkingcapitalrequirements,andmakingotherstrategiccapitalinvestments.Wemayalsousecashtorepurchasesharesofourcommonstock.Cashandcashequivalentsinexcessofourn

243、eedsareheldininterestbearingaccountswithfinancialinstitutions,aswellasinmoneymarketfundsandtermdeposits.Thefollowingtablesummarizesournetcashflowsprovidedbyandusedinoperating,investing,andfinancingactivitiesfortheperiodsindicated:20232022Yearoveryearchange(Inthousands)Totalcashprovidedby(usedin):Ope

244、ratingactivities$2,296,164$966,463$1,329,701Investingactivities(654,132)(569,937)(84,195)Financingactivities(548,828)(467,487)(81,341)Effectofforeigncurrencyexchangeratechangesoncashandcashequivalents(4,100)(34,043)29,943Increase(decrease)incashandcashequivalents$1,089,104$(105,004)$1,194,10841Opera

245、tingActivitiesTheincreaseincashprovidedbyoperatingactivitieswasprimarilyasaresultof:anincreaseincashflowsfromchangesinoperatingassetsandliabilitiesof$859.1million,primarilydrivenbychangesininventories,accountspayable,andprepaidexpensesandothercurrentassets,partiallyoffsetbychangesinincometaxesandacc

246、ruedliabilities;andincreasednetincomeof$695.4million.Theincreaseincashprovidedbyoperatingactivitieswaspartiallyoffsetbychangesinadjustingitemsof$224.8million,primarilydrivenbygoodwillandotherassetimpairmentsandrestructuringcostsrecognizedinrelationtolululemonStudio,aswellasincreaseddepreciationandhi

247、ghercashinflowsrelatedtoderivatives.InvestingActivitiesTheincreaseincashusedininvestingactivitieswasprimarilyduetothesettlementofnetinvestmenthedgesandincreasedcapitalexpenditures.Theincreaseincapitalexpenditureswasprimarilyduetoinvestmentinourdistributioncentersaswellasothertechnologyinfrastructure

248、andsysteminitiatives,partiallyoffsetbyadecreaseincompany-operatedstoreandcorporatecapitalexpenditures.FinancingActivitiesTheincreaseincashusedinfinancingactivitieswasprimarilytheresultofanincreaseinourstockrepurchases.During2023,1.5millionshareswererepurchasedatatotalcostincludingcommissionsandexcis

249、etaxesof$558.7million.During2022,1.4millionshareswererepurchasedatatotalcostincludingcommissionsandexcisetaxesof$444.0million.Thecommonstockwasrepurchasedintheopenmarketatprevailingmarketprices,includingunderplanscomplyingwiththeprovisionsofRule10b5-1andRule10b-18oftheSecuritiesExchangeActof1934,wit

250、hthetimingandactualnumberofsharesrepurchaseddependinguponmarketconditions,eligibilitytotrade,andotherfactors.LiquidityOutlookWebelieveourcashandcashequivalentbalances,cashgeneratedfromoperations,andborrowingsavailabletousunderourcommittedrevolvingcreditfacilitywillbeadequatetomeetourliquidityneedsan

251、dcapitalexpenditurerequirementsforatleastthenext12months.OurcashfromoperationsmaybenegativelyimpactedbyadecreaseindemandforourproductsaswellastheotherfactorsdescribedinItem1A.RiskFactors.Inaddition,wemaymakediscretionarycapitalimprovementswithrespecttoourstores,distributionfacilities,headquarters,or

252、systems,orwemayrepurchasesharesunderanapprovedstockrepurchaseprogram,whichwewouldexpecttofundthroughtheuseofcash,issuanceofdebtorequitysecuritiesorotherexternalfinancingsourcestotheextentwewereunabletofundsuchexpendituresoutofourcashandcashequivalentsandcashgeneratedfromoperations.Thefollowingtablei

253、ncludescertainmeasuresofourliquidity:January28,2024(Inthousands)Cashandcashequivalents$2,243,971Workingcapitalexcludingcashandcashequivalents(1)185,345Capacityundercommittedrevolvingcreditfacility393,661_(1)Workingcapitaliscalculatedascurrentassetsof$4.1billionlesscurrentliabilitiesof$1.6billion.Cap

254、italexpendituresareexpectedtorangebetween$690.0millionand$710.0millionin2024.Ourcurrentcommitmentswithrespecttoinventorypurchasesareincludedwithinourpurchaseobligationsoutlinedbelow.Thetimingandcostofourinventorypurchaseswillvarydependingonavarietyoffactorssuchasrevenuegrowth,assortmentandpurchasing

255、decisions,productcostsincludingfreightandduty,andtheavailabilityofproductioncapacityandspeed.OurinventorybalanceasofJanuary28,2024was$1.3billion,adecreaseof9%fromJanuary29,2023.Weexpectourinventoriestodecreaseduringthefirsthalfof2024comparedtothefirsthalfof2023,andthenincreaseinthesecondhalfof2024co

256、mparedtothesecondhalfof2023.42OurexistingAmericascreditfacilityprovidesfor$400.0millionincommitmentsunderanunsecuredfive-yearrevolvingcreditfacility.ThecreditfacilityhasamaturitydateofDecember14,2026,subjecttoextensionundercertaincircumstances.AsofJanuary28,2024,asidefromlettersofcreditof$6.3million

257、,wehadnootherborrowingsoutstandingunderthiscreditfacility.FurtherinformationregardingourcreditfacilitiesandassociatedcovenantsisoutlinedinNote12.RevolvingCreditFacilitiesincludedinItem8ofPartIIofthisreport.ContractualObligationsandCommitmentsLeases.Weleasecertainstoreandotherretaillocations,distribu

258、tioncenters,offices,andequipmentundernon-cancellableoperatingleases.Ourleasesgenerallyhaveinitialtermsofbetweentwoand15years,andgenerallycanbeextendedinincrementsbetweentwoandfiveyears,ifatall.Thefollowingtabledetailsourfutureminimumleasepayments.Minimumleasecommitmentsexcludevariableleaseexpensesin

259、cludingcontingentrentpayments,commonareamaintenance,propertytaxes,andlandlordsinsurance.Purchaseobligations.Theamountslistedforpurchaseobligationsinthetablebelowrepresentagreements(includingopenpurchaseorders)topurchaseproductsandforotherexpendituresintheordinarycourseofbusinessthatareenforceableand

260、legallybindingandthatspecifyallsignificantterms.Insomecases,valuesaresubjecttochange,suchasforproductpurchasesthroughouttheproductionprocess.ThereportedamountsexcludeliabilitiesincludedinourconsolidatedbalancesheetsasofJanuary28,2024.One-timetransitiontaxpayable.TheU.S.taxreformsenactedinDecember201

261、7imposedamandatorytransitiontaxonaccumulatedforeignsubsidiaryearningswhichhavenotpreviouslybeensubjecttoU.S.incometax.Theone-timetransitiontaxispayableovereightyearsbeginninginfiscal2018.Theone-timetransitiontaxpayableisnetofforeigntaxcredits,andthetablebelowoutlinestheexpectedpaymentsduebyfiscalyea

262、r.ThefollowingtablesummarizesourcontractualarrangementsduebyfiscalyearasofJanuary28,2024,andthetimingandeffectthatsuchcommitmentsareexpectedtohaveonourliquidityandcashflowsinfutureperiods:Total20242025202620272028Thereafter(Inthousands)Operatingleases(minimumrent)$1,645,318$300,379$287,224$232,510$2

263、14,519$158,252$452,434Purchaseobligations688,934 656,376 5,566 10,506 2,899 13,587 One-timetransitiontaxpayable28,555 12,691 15,864 AsofJanuary28,2024,ouroperatingleasecommitmentsfordistributioncenteroperatingleaseswhichhavebeencommittedto,butnotyetcommenced,was$299.6million,whichisnotreflectedinthe

264、tableabove.Weenterintostandbylettersofcredittosecurecertainofourobligations,includingleases,taxes,andduties.AsofJanuary28,2024,lettersofcreditandlettersofguaranteetotaling$10.2millionhadbeenissued,including$6.3millionunderourcommittedrevolvingcreditfacility.CriticalAccountingPoliciesandEstimatesThep

265、reparationoffinancialstatementsinconformitywithU.S.generallyacceptedaccountingprinciplesrequiresmanagementtomakeestimatesandassumptions.Predictingfutureeventsisinherentlyanimpreciseactivityand,assuch,requirestheuseofsignificantjudgment.Actualresultsmayvaryfromourestimatesinamountsthatmaybematerialto

266、thefinancialstatements.Anaccountingpolicyisdeemedtobecriticalifitrequiresanaccountingestimatetobemadebasedonassumptionsaboutmattersthatarehighlyuncertainatthetimetheestimateismade,andifdifferentestimatesthatreasonablycouldhavebeenusedorchangesintheaccountingestimatesthatarereasonablylikelytooccurper

267、iodically,couldmateriallyimpactourconsolidatedfinancialstatements.Ourcriticalaccountingpolicies,estimates,andjudgementsareasfollows,andseeNote2.SummaryofSignificantAccountingPoliciesincludedinItem8ofPartIIforadditionalinformation:InventoryprovisionInventoryisvaluedatthelowerofcostandnetrealizableval

268、ue.Weperiodicallyreviewourinventoriesandmakeaprovisionforobsolescenceandgoodsthathavequalityissuesorthataredamaged.Werecordaprovisionatanamountthatisequaltothedifferencebetweentheinventorycostanditsnetrealizablevalue.AsofJanuary28,2024thenetcarryingvalueofourinventorieswas$1.3billion,whichincludedpr

269、ovisionsforobsoleteanddamagedinventoryof$139.7million.The43provisionisdeterminedbaseduponassumptionsaboutproductquality,damages,futuredemand,sellingprices,andmarketconditions,andincludesaprovisionof$63.0millionagainstlululemonStudioMirrorinventory.Deferredtaxesonundistributednetinvestmentofforeignsu

270、bsidiaries.WehavenotrecognizedU.S.stateincometaxesandforeignwithholdingtaxesonthenetinvestmentinoursubsidiarieswhichwehavedeterminedtobeindefinitelyreinvested.Thisdeterminationisbasedonthecashflowprojectionsandoperationalandfiscalobjectivesofeachofourforeignsubsidiaries.Suchestimatesareinherentlyimp

271、recisesincemanyassumptionsutilizedintheprojectionsaresubjecttorevisioninthefuture.FortheportionofournetinvestmentinourCanadiansubsidiariesthatisnotindefinitelyreinvested,wehaverecordedadeferredtaxliabilityforthetaxeswhichwouldbedueuponrepatriation.FordistributionsmadebyourCanadiansubsidiaries,theamo

272、untoftaxpayableispartiallydependentonhowtherepatriationtransactionsaremade.Thedeferredtaxliabilityhasbeenrecordedonthebasisthatwewouldchoosetomaketherepatriationtransactionsinthemosttaxefficientmanner.Specifically,totheextentthattheCanadiansubsidiarieshavesufficientpaid-up-capital,anysuchdistributio

273、nswouldbemadeasareturnofcapital,ratherthanasadividend,andthereforewouldnotbesubjecttoCanadianwithholdingtax.AsofJanuary28,2024,thenetinvestmentinourCanadiansubsidiarieswas$2.5billion,ofwhich$1.6billionwasdeterminedtobeindefinitelyreinvested.Thepaid-up-capitalbalanceoftheCanadiansubsidiarieswasapprox

274、imately$140.0million.Wehaverecognizedadeferredtaxliabilityof$41.2millionasofJanuary28,2024whichrepresentstheCanadianwithholdingtaxespayableontheportionofourCanadianearningsthatarenotindefinitelyreinvestedandcannotberepatriatedasareturnofcapital,andU.S.stateincometaxespayableuponrepatriationoftheamou

275、ntswhicharenotindefinitelyreinvested.Infutureperiods,ifthenetinvestmentinourCanadiansubsidiariescontinuestogrow,whetherduetotheaccumulationofprofitsbythesesubsidiariesorduetoachangeintheamountthatisindefinitelyreinvested,wewillrecordadditionaldeferredtaxliabilities,includingbothCanadianwithholdingta

276、xesfortheamountinexcessofthepaid-upcapitalbalanceandU.S.stateincometaxes.ContingenciesWeareinvolvedinlegalproceedingsregardingcontractualandemploymentrelationshipsandavarietyofothermatters.Werecordcontingentliabilitieswhenalossisassessedtobeprobableanditsamountisreasonablyestimable.Ifitisreasonablyp

277、ossiblethatamateriallosscouldoccurthroughongoinglitigation,weprovidedisclosureinthefootnotestoourfinancialstatements.Assessingprobabilityoflossandestimatingtheamountofprobablelossesrequiresanalysisofmultiplefactors,includinginsomecasesjudgmentsaboutthepotentialactionsofthird-partyclaimantsandcourts.

278、Shouldweexperienceadversecourtjudgmentsorshouldnegotiatedoutcomesdiffertoourexpectationswithrespecttosuchongoinglitigationitcouldhaveamaterialadverseeffectonourresultsofoperations,financialposition,andcashflows.ITEM7A.QUANTITATIVEANDQUALITATIVEDISCLOSURESABOUTMARKETRISKForeignCurrencyExchangeRiskTra

279、nslationRisk.Thefunctionalcurrencyofourinternationalsubsidiariesisgenerallytheapplicablelocalcurrency.OurconsolidatedfinancialstatementsarepresentedinU.S.dollars.Therefore,thenetrevenue,expenses,assets,andliabilitiesofourinternationalsubsidiariesaretranslatedfromtheirfunctionalcurrenciesintoU.S.doll

280、ars.FluctuationsinthevalueoftheU.S.dollaraffectthereportedamountsofnetrevenue,expenses,assets,andliabilities.AsaresultofthefluctuationinexchangeratescomparedtotheU.S.dollarourrevenuewas$89.8millionlowerin2023incomparisonto2022.Foreigncurrencyexchangedifferenceswhichariseontranslationofourinternation

281、alsubsidiariesbalancesheetsintoU.S.dollarsarerecordedasothercomprehensiveincome(loss),netoftaxinaccumulatedothercomprehensiveincome(loss)withinstockholdersequity.AsignificantportionofournetassetsareheldbyourCanadiandollarsubsidiary.Weenterintoforwardcurrencycontractsinordertohedgeaportionoftheforeig

282、ncurrencyexposureassociatedwiththetranslationofournetinvestmentinourCanadiansubsidiary.TheimpacttoothercomprehensivelossoftranslationofourCanadiansubsidiarieswasanincreaseinthelossof$9.0million,inclusiveofnetinvestmenthedgegains.TransactionRisk.Wealsohaveexposuretochangesinforeigncurrencyexchangerat

283、esassociatedwithtransactionswhichareundertakenbyoursubsidiariesincurrenciesotherthantheirfunctionalcurrency.Suchtransactionsincludeintercompanytransactionsandinventorypurchasesdenominatedincurrenciesotherthanthefunctionalcurrencyofthe44purchasingentity.Wealsoholdcashandcashequivalentsandothermonetar

284、yassetsincurrenciesthataredifferenttothefunctionalcurrencyofoursubsidiaries.AsofJanuary28,2024,wehadcertainforwardcurrencycontractsoutstandinginordertoeconomicallyhedgetheforeigncurrencyrevaluationgainsandlossesrecognizedbyourforeignsubsidiaries,includingourCanadianandChinesesubsidiaries,ontheirmone

285、taryassetsandliabilitiesdenominatedincurrenciesotherthantheirfunctionalcurrency.Weperformasensitivityanalysistodeterminethemarketriskexposureassociatedwiththefairvaluesofourforwardcurrencycontracts.ThenetfairvalueofoutstandingderivativesasofJanuary28,2024wasaliabilityof$2.2million.AsofJanuary28,2024

286、,a10%depreciationintheU.S.dollaragainstthehedgedcurrencieswouldhaveresultedinthenetfairvalueofoutstandingderivativesdepreciatingby$29.8million.Thehypotheticalchangeinthefairvalueoftheforwardcurrencycontractswouldhavebeensubstantiallyoffsetbyacorrespondingbutdirectionallyoppositechangeintheunderlying

287、hedgeditems.Inthefuture,inanefforttoreduceforeigncurrencyexchangerisks,wemayenterintofurtherderivativefinancialinstrumentsincludinghedgingadditionalcurrencypairs.Wedonot,anddonotintendto,engageinthepracticeoftradingderivativesecuritiesforprofit.PleaserefertoNote17.DerivativeFinancialInstrumentsinclu

288、dedinItem8ofPartIIofthisreportforfurtherdetailsonthenatureofourfinancialinstruments.InterestRateRiskOurcommittedrevolvingcreditfacilityprovidesuswithavailableborrowingsinanamountupto$400.0million.Becauseourrevolvingcreditfacilitiesbearinterestatavariablerate,wewillbeexposedtomarketrisksrelatingtocha

289、ngesininterestrates,ifwehaveameaningfuloutstandingbalance.AsofJanuary28,2024,asidefromlettersofcreditof$6.3million,therewerenoborrowingsoutstandingunderthesecreditfacilities.Wecurrentlydonotengageinanyinterestratehedgingactivityandcurrentlyhavenointentiontodoso.However,inthefuture,ifwehaveameaningfu

290、loutstandingbalanceunderourrevolvingfacility,inanefforttomitigatelossesassociatedwiththeserisks,wemayattimesenterintoderivativefinancialinstruments,althoughwehavenothistoricallydoneso.Thesemaytaketheformofforwardcontracts,optioncontracts,orinterestrateswaps.Wedonot,anddonotintendto,engageinthepracti

291、ceoftradingderivativesecuritiesforprofit.Ourcashandcashequivalentbalancesareheldintheformofcashonhand,bankbalances,andshort-termdepositswithoriginalmaturitiesofthreemonthsorless,andinmoneymarketfunds.AsofJanuary28,2024,weheldcashandcashequivalentsof$2.2billion.Interestgeneratedoncashbalancesissubjec

292、ttovariabilityasinterestratesincreaseordecrease.CreditRisk.Wehavecashondepositwithvariouslarge,reputablefinancialinstitutionsandhaveinvestedinAAA-ratedmoneymarketfunds.Theamountofcashandcashequivalentsheldwithcertainfinancialinstitutionsexceedsgovernment-insuredlimits.Wearealsoexposedtocredit-relate

293、dlossesintheeventofnonperformancebythefinancialinstitutionsthatarecounterpartiestoourforwardcurrencycontracts.Thecreditriskamountisourunrealizedgainsonourderivativeinstruments,basedonforeigncurrencyratesatthetimeofnonperformance.Wehavenotexperiencedanylossesrelatedtotheseitems,andwebelievecreditrisk

294、tobeminimal.Weseektominimizeourcreditriskbyenteringintotransactionswithinvestmentgradecreditworthyandreputablefinancialinstitutionsandbymonitoringthecreditstandingofthefinancialinstitutionswithwhomwetransact.Weseektolimittheamountofexposurewithanyonecounterparty.InflationInflationaryfactorssuchasinc

295、reasesinthecostofourproduct,aswellasoverheadcostsandcapitalexpendituresmayadverselyaffectouroperatingresults.During2022and2023,ouroperatingmarginwasimpactedbyincreasedwagerates.During2022,ourgrossmarginwasimpactedbyhigherairfreightcostsasaresultofglobalsupplychaindisruption.Sustainedincreasesintrans

296、portationcosts,wages,andrawmaterialcosts,orotherinflationarypressuresinthefuturemayhaveanadverseeffectonourabilitytomaintaincurrentlevelsofoperatingmarginifthesellingpricesofourproductsdonotincreasewiththeseincreasedcosts,orwecannotidentifycostefficiencies.45ITEM8.FINANCIALSTATEMENTSlululemonathleti

297、cainc.INDEXTOCONSOLIDATEDFINANCIALSTATEMENTSReportofIndependentRegisteredPublicAccountingFirm(PCAOBID271)47ConsolidatedBalanceSheets49ConsolidatedStatementsofOperationsandComprehensiveIncome50ConsolidatedStatementsofStockholdersEquity51ConsolidatedStatementsofCashFlows53IndexforNotestotheConsolidate

298、dFinancialStatements5446REPORTOFINDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRMTotheStockholdersandBoardofDirectorsoflululemonathleticainc.OpinionsontheFinancialStatementsandInternalControloverFinancialReportingWehaveauditedtheaccompanyingconsolidatedbalancesheetsoflululemonathleticainc.anditssubsidiaries

299、(together,theCompany)asofJanuary28,2024andJanuary29,2023,andtherelatedconsolidatedstatementsofoperationsandcomprehensiveincome,ofstockholdersequityandofcashflowsforeachofthe52-weekyearsendedJanuary28,2024,January29,2023,andJanuary30,2022,includingtherelatednotes(collectivelyreferredtoastheconsolidat

300、edfinancialstatements).WealsohaveauditedtheCompanysinternalcontroloverfinancialreportingasofJanuary28,2024,basedoncriteriaestablishedinInternalControlIntegratedFramework(2013)issuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission(COSO).Inouropinion,theconsolidatedfinancialstatementsref

301、erredtoabovepresentfairly,inallmaterialrespects,thefinancialpositionoftheCompanyasofJanuary28,2024andJanuary29,2023,andtheresultsofitsoperationsanditscashflowsforeachofthe52-weekyearsendedJanuary28,2024,January29,2023,andJanuary30,2022inconformitywithaccountingprinciplesgenerallyacceptedintheUnitedS

302、tatesofAmerica.Alsoinouropinion,theCompanymaintained,inallmaterialrespects,effectiveinternalcontroloverfinancialreportingasofJanuary28,2024,basedoncriteriaestablishedinInternalControlIntegratedFramework(2013)issuedbytheCOSO.BasisforOpinionsTheCompanysmanagementisresponsiblefortheseconsolidatedfinanc

303、ialstatements,formaintainingeffectiveinternalcontroloverfinancialreporting,andforitsassessmentoftheeffectivenessofinternalcontroloverfinancialreporting,includedinManagementsAnnualReportonInternalControloverFinancialReportingappearingunderItem9AoftheCompanys2023AnnualReportonForm10-K.Ourresponsibilit

304、yistoexpressopinionsontheCompanysconsolidatedfinancialstatementsandontheCompanysinternalcontroloverfinancialreportingbasedonouraudits.WeareapublicaccountingfirmregisteredwiththePublicCompanyAccountingOversightBoard(UnitedStates)(PCAOB)andarerequiredtobeindependentwithrespecttotheCompanyinaccordancew

305、iththeU.S.federalsecuritieslawsandtheapplicablerulesandregulationsoftheSecuritiesandExchangeCommissionandthePCAOB.WeconductedourauditsinaccordancewiththestandardsofthePCAOB.Thosestandardsrequirethatweplanandperformtheauditstoobtainreasonableassuranceaboutwhethertheconsolidatedfinancialstatementsaref

306、reeofmaterialmisstatement,whetherduetoerrororfraud,andwhethereffectiveinternalcontroloverfinancialreportingwasmaintainedinallmaterialrespects.Ourauditsoftheconsolidatedfinancialstatementsincludedperformingprocedurestoassesstherisksofmaterialmisstatementoftheconsolidatedfinancialstatements,whetherdue

307、toerrororfraud,andperformingproceduresthatrespondtothoserisks.Suchproceduresincludedexamining,onatestbasis,evidenceregardingtheamountsanddisclosuresintheconsolidatedfinancialstatements.Ourauditsalsoincludedevaluatingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluatin

308、gtheoverallpresentationoftheconsolidatedfinancialstatements.Ourauditofinternalcontroloverfinancialreportingincludedobtaininganunderstandingofinternalcontroloverfinancialreporting,assessingtheriskthatamaterialweaknessexists,andtestingandevaluatingthedesignandoperatingeffectivenessofinternalcontrolbas

309、edontheassessedrisk.Ourauditsalsoincludedperformingsuchotherproceduresasweconsiderednecessaryinthecircumstances.Webelievethatourauditsprovideareasonablebasisforouropinions.DefinitionandLimitationsofInternalControloverFinancialReportingAcompanysinternalcontroloverfinancialreportingisaprocessdesignedt

310、oprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples.Acompanysinternalcontroloverfinancialreportingincludesthosepoliciesandproceduresthat(i)pertaintothemaintenanceofrecords

311、that,inreasonabledetail,accuratelyandfairlyreflectthetransactionsanddispositionsoftheassetsofthecompany;(ii)providereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancialstatementsinaccordancewithgenerallyacceptedaccountingprinciples,andthatreceiptsandexpendituresofth

312、ecompanyarebeingmadeonlyinaccordancewithauthorizationsofmanagementanddirectorsofthecompany;and(iii)providereasonableassuranceregardingpreventionortimelydetectionofunauthorizedacquisition,use,ordispositionofthecompanysassetsthatcouldhaveamaterialeffectonthefinancialstatements.47Becauseofitsinherentli

313、mitations,internalcontroloverfinancialreportingmaynotpreventordetectmisstatements.Also,projectionsofanyevaluationofeffectivenesstofutureperiodsaresubjecttotheriskthatcontrolsmaybecomeinadequatebecauseofchangesinconditions,orthatthedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate.CriticalA

314、uditMattersThecriticalauditmattercommunicatedbelowisamatterarisingfromthecurrentperiodauditoftheconsolidatedfinancialstatementsthatwascommunicatedorrequiredtobecommunicatedtotheauditcommitteeandthat(i)relatestoaccountsordisclosuresthatarematerialtotheconsolidatedfinancialstatementsand(ii)involvedour

315、especiallychallenging,subjective,orcomplexjudgments.Thecommunicationofcriticalauditmattersdoesnotalterinanywayouropinionontheconsolidatedfinancialstatements,takenasawhole,andwearenot,bycommunicatingthecriticalauditmatterbelow,providingaseparateopiniononthecriticalauditmatterorontheaccountsordisclosu

316、restowhichitrelates.InventoryProvisionAsdescribedinNotes2and3totheconsolidatedfinancialstatements,inventoriesarevaluedatthelowerofcostandnetrealizablevalue,andmanagementrecordsaprovisionasnecessarytoappropriatelyvalueinventoriesthatareobsolete,havequalityissues,oraredamaged.Provisionexpenseisrecorde

317、dincostofgoodssold.AsofJanuary28,2024,theCompanysconsolidatednetinventoriesbalancewas$1,323.6millioninclusiveoftheinventoryprovisionof$141.5million.Theamountoftheinventoryprovisionisequaltothedifferencebetweenthecostoftheinventoryanditsestimatednetrealizablevaluebasedonassumptionsaboutproductquality

318、,damages,futuredemand,sellingprices,andmarketconditions.Theprincipalconsiderationsforourdeterminationthatperformingproceduresrelatingtotheinventoryprovisionisacriticalauditmatterarethesignificantjudgmentbymanagementindeterminingtheestimatednetrealizablevalueofinventoriesthatareobsolete,havequalityis

319、sues,oraredamaged,whichinturnledtoahighdegreeofauditorjudgment,subjectivity,andeffortinperformingproceduresandevaluatingauditevidencerelatingtotheinventoryprovision.Addressingthematterinvolvedperformingproceduresandevaluatingauditevidenceinconnectionwithformingouroverallopinionontheconsolidatedfinan

320、cialstatements.Theseproceduresincludedtestingtheeffectivenessofcontrolsrelatingtothereviewoftheinventoryprovisionincludingtheassumptionsused.Theseproceduresalsoincluded,amongothers,(i)observingthephysicalconditionofinventoriesduringinventorycounts;(ii)evaluatingtheappropriatenessofmanagementsprocess

321、fordevelopingtheestimatesofnetrealizablevalue;(iii)testingthereliabilityofreportsusedbymanagementbyagreeingtounderlyingrecords;(iv)testingthereasonablenessoftheassumptionsaboutquality,damages,futuredemand,sellingpricesandmarketconditionsbyconsideringhistoricaltrendsandconsistencywithevidenceobtained

322、inotherareasoftheaudit;and(v)corroboratingtheassumptionswithindividualswithintheproductteam./s/PricewaterhouseCoopersLLPCharteredProfessionalAccountantsVancouver,CanadaMarch21,2024WehaveservedastheCompanysauditorsince2006.48lululemonathleticainc.CONSOLIDATEDBALANCESHEETS(Amountsinthousands,exceptper

323、shareamounts)January28,2024January29,2023ASSETSCurrentassetsCashandcashequivalents$2,243,971$1,154,867Accountsreceivable,net124,769132,906Inventories1,323,6021,447,367Prepaidandreceivableincometaxes183,733185,641Prepaidexpensesandothercurrentassets184,502238,6724,060,5773,159,453Propertyandequipment

324、,net1,545,8111,269,614Right-of-useleaseassets1,265,610969,419Goodwill24,08324,144Intangibleassets,net21,961Deferredincometaxassets9,1766,402Othernon-currentassets186,684156,045$7,091,941$5,607,038LIABILITIESANDSTOCKHOLDERSEQUITYCurrentliabilitiesAccountspayable$348,441$172,732Accruedliabilitiesandot

325、her348,555399,223Accruedcompensationandrelatedexpenses326,110248,167Currentleaseliabilities249,270207,972Currentincometaxespayable12,098174,221Unredeemedgiftcardliability306,479251,478Othercurrentliabilities40,30838,4051,631,2611,492,198Non-currentleaseliabilities1,154,012862,362Non-currentincometax

326、espayable15,86428,555Deferredincometaxliabilities29,52255,084Othernon-currentliabilities29,20120,0402,859,8602,458,239CommitmentsandcontingenciesStockholdersequityUndesignatedpreferredstock,$0.01parvalue:5,000sharesauthorized;noneissuedandoutstandingExchangeablestock,noparvalue:60,000sharesauthorize

327、d;5,116and5,116issuedandoutstandingSpecialvotingstock,$0.000005parvalue:60,000sharesauthorized;5,116and5,116issuedandoutstandingCommonstock,$0.005parvalue:400,000sharesauthorized;121,106and122,205issuedandoutstanding606611Additionalpaid-incapital575,369474,645Retainedearnings3,920,3622,926,127Accumu

328、latedothercomprehensiveloss(264,256)(252,584)4,232,0813,148,799$7,091,941$5,607,038Seeaccompanyingnotestotheconsolidatedfinancialstatements49lululemonathleticainc.CONSOLIDATEDSTATEMENTSOFOPERATIONSANDCOMPREHENSIVEINCOME(Amountsinthousands,exceptpershareamounts)FiscalYearEndedJanuary28,2024January29,

329、2023January30,2022Netrevenue$9,619,278$8,110,518$6,256,617Costofgoodssold4,009,873 3,618,178 2,648,052Grossprofit5,609,405 4,492,340 3,608,565Selling,generalandadministrativeexpenses3,397,218 2,757,447 2,225,034Impairmentofgoodwillandotherassets,restructuringcosts74,501 407,913 Amortizationofintangi

330、bleassets5,010 8,752 8,782Acquisition-relatedexpenses 41,394Gainondisposalofassets(10,180)Incomefromoperations2,132,676 1,328,408 1,333,355Otherincome(expense),net43,059 4,163 514Incomebeforeincometaxexpense2,175,735 1,332,571 1,333,869Incometaxexpense625,545 477,771 358,547Netincome$1,550,190$854,8

331、00$975,322Othercomprehensiveincome(loss),netoftax:Foreigncurrencytranslationadjustment$(23,077)$(65,571)$(28,494)Netinvestmenthedgegains(losses)11,405 8,904 9,732Othercomprehensiveincome(loss),netoftax(11,672)(56,667)(18,762)Comprehensiveincome$1,538,518$798,133$956,560Basicearningspershare$12.23$6.

332、70$7.52Dilutedearningspershare$12.20$6.68$7.49Basicweighted-averagenumberofsharesoutstanding126,726 127,666 129,768Dilutedweighted-averagenumberofsharesoutstanding127,060 128,017 130,295Seeaccompanyingnotestotheconsolidatedfinancialstatements50lululemonathleticainc.CONSOLIDATEDSTATEMENTSOFSTOCKHOLDE

333、RSEQUITY(Amountsinthousands)BalanceasofJanuary31,20215,2035,203$125,150$626$388,667$2,346,428$(177,155)$2,558,566Netincome975,322975,322Othercomprehensiveincome(loss),netoftax(18,762)(18,762)Stock-basedcompensationexpense69,13769,137Commonstockissueduponsettlementofstock-basedcompensation502218,19218,194Shareswithheldrelatedtonetsharesettlementofstock-basedcompensation(153)(1)(49,808)(49,809)Repur