lululemon athletica (LULU) 10-K risk factor changes: FY2017 vs FY2016

Our success depends on the value and reputation of the lululemon [removed: athletica] brand.

The lululemon [removed: athletica] name is integral to our business as well as to the implementation of our strategies for expanding our business.

We have also received, and may in the future continue to receive, products that [removed: either meet our technical specifications but that] are [removed: nonetheless unacceptable to us, or products that are] otherwise unacceptable to us or our guests.

Additionally, if the unacceptability of our products [removed: are] [added: is] not discovered until after such products are purchased by our guests, our guests could lose confidence in the technical attributes of our products or we could face a product recall and our results of operations could suffer and our business, reputation, and brand could be harmed.

In fiscal [removed: 2015,] [added: 2016,] approximately [removed: 65%] [added: 63%] of our products were produced by our top five manufacturing suppliers, [added: and] 40% of raw materials were produced by a single manufacturer.

[removed: Any delays, interruption or increased costs in the supply of fabric or manufacture of] our [removed: products could have an adverse effect on our] ability to meet guest demand for our products and result in lower net revenue and income from operations both in the short and long term.

Factors affecting the level of consumer spending for such discretionary items include general economic conditions, particularly those in North [removed: America] [added: America,] and other factors such as consumer confidence in future economic conditions, fears of recession, the availability and cost of consumer credit, levels of unemployment, and tax rates.

Competition may result in pricing pressures, reduced profit margins or lost market share, or a failure to grow [added: or maintain] our market share, any of which could substantially harm our business and results of operations.

Our competitors may also be able to increase sales in their new and existing markets faster than we do by emphasizing different distribution channels than we do, such as catalog sales or an extensive franchise [removed: network, as opposed to distribution through retail stores, wholesale or internet, and many of our competitors have substantial resources to devote toward increasing sales in such ways.][added: network.]

Any material disruption or slowdown of our systems, including a disruption or slowdown caused by our failure to successfully upgrade our systems, system failures, viruses, computer "hackers" or other causes, could cause information, including data related to guest orders, to be lost or delayed which [removed: could-especially] [added: could, especially] if the disruption or slowdown occurred during the holiday [removed: season-result] [added: season, result] in delays in the delivery of products to our stores and guests or lost sales, which could reduce demand for our products and cause our sales to decline.

We have expanded our operations rapidly since our inception in 1998 and our net revenue has increased from $40.7 million in fiscal 2004 to [removed: $2.1] [added: $2.3] billion in fiscal [removed: 2015.][added: 2016.]

Changes in tax [removed: laws, capital or financing needs in the United States,] [added: laws] or [removed: our intentions with respect to the reinvestment of foreign earnings] [added: unanticipated tax liabilities] could adversely affect our effective income tax rate and profitability.

Our effective income tax [removed: rate may] [added: rates could] be [removed: adversely affected] [added: unfavorably impacted] by a number of factors, including changes in the mix of earnings [removed: in] [added: amongst] countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax laws, the outcome of income tax audits in various jurisdictions around the world, and any [removed: changes to our plans related to] repatriation of [removed: non-U.S.] [added: unremitted] earnings for which we have not previously [removed: provided for] [added: accrued] U.S. taxes.

[removed: If an existing or new store] is not profitable, and we decide to close it, as we have done in the past and may do in the future, we may nonetheless be committed to perform our obligations under the applicable lease including, among other things, paying the base rent for the balance of the lease term.

Therefore, the net [removed: revenues,] [added: revenue,] expenses, assets, and liabilities of our foreign subsidiaries are translated from their functional currencies into U.S. dollars.

As a result, we have been impacted by changes in exchange rates and may be impacted [removed: materially] for the foreseeable future.

The potential impact of currency fluctuation increases as [added: our] international expansion increases.

A [removed: strengthening] [added: weakening] of the U.S. dollar against the Canadian dollar results in:

| • | [removed: a decrease] [added: an increase] in our net revenue upon translation of the sales made by our Canadian operations into U.S. dollars for the purposes of consolidation; |

| • | [removed: a decrease] [added: an increase] in our selling, general and administrative expenses incurred by our Canadian operations [added: upon translation] into U.S. dollars for the purposes of consolidation; and |

| • | foreign exchange [removed: gains] [added: revaluation losses] by our Canadian subsidiaries on U.S. dollar cash and receivables denominated in U.S. dollars. |

During fiscal [removed: 2014,] [added: 2016,] the change in the relative value of the U.S. dollar against the Canadian dollar resulted in a [removed: $103.3] [added: $41.7] million [removed: increase] [added: reduction] in accumulated other comprehensive loss within stockholders' equity.

A 10% appreciation in the relative value of the U.S. dollar against the Canadian dollar compared to the exchange rates in effect for fiscal [removed: 2014] [added: 2015] would have resulted in [removed: lost] [added: additional] income from operations of approximately [removed: $2.2] [added: $0.2] million in fiscal [removed: 2015.][added: 2016.]

However, in the future, in an effort to mitigate [removed: losses associated with] these risks, we may at times enter into derivative financial instruments, although we have not historically done so.

During fiscal [removed: 2015,] [added: 2016,] approximately [removed: 44%] [added: 47%] of our products were produced in South East Asia, approximately 28% in South Asia, approximately [removed: 20%] [added: 15%] in China, approximately [removed: 2%] [added: 1%] in North America, and the remainder in other regions.

[removed: Our] defense of any claim, regardless of its merit, could be expensive and time consuming and could divert management resources.

From time to time, we are involved in litigation and other proceedings, including matters related to product liability claims, stockholder class action and derivative claims, commercial disputes and intellectual property, as well as trade, regulatory, [added: employment,] and other claims related to our business.

In addition, we are governed by Section 203 of the Delaware General Corporation Law which, subject to some specified exceptions, prohibits "business combinations" between a Delaware corporation and an "interested stockholder," which is [added: generally defined as a stockholder who becomes a beneficial owner of 15% or more of a Delaware corporation's voting stock, for a three-year period following the date that the stockholder became an interested stockholder.]

Any delays, interruption or increased costs in the supply of fabric or manufacture of our products could have an adverse effect on

If an existing or new store

The U.S. government could impose a border adjustable tax, which could have a material adverse effect on our business, financial condition and operating results.

We are also dependent on international trade agreements and regulations.

If the United States were to withdraw from or materially modify certain international trade agreements, our business could be adversely affected.

Our

For example, Luon fabric, which is included in

many of our products, is supplied to the garment factories we use by a limited number of manufacturers, and the components used in manufacturing Luon fabric may each be supplied to our manufacturers by single companies.

If our capital or financing needs in the United States require us to repatriate earnings from foreign jurisdictions or if our intentions should change with respect to reinvesting foreign earnings, our effective income tax rates could be unfavorably impacted.

Such plans are affected by our intentions related to reinvestment in our foreign operations and the capital and financing needs of our U.S. operations.

Our effective tax rate might vary significantly as a result of our anticipated bilateral Advance Payment Arrangement ("APA") that we are in the process of negotiating with the Internal Revenue Service ("IRS") and the Canada Revenue Agency ("CRA").

We expect that the outcome of the APA will result in a significant payment from one of our U.S. subsidiaries to a Canadian subsidiary, that the ongoing net cash flow of our U.S. operations will be lower than previously expected, and that we will need to distribute funds to our U.S. parent entity to finance this payment and future working capital needs in the United States.

We are subject to the examination of our tax returns by the IRS, the CRA, and other tax authorities.

We regularly assess all of these matters to determine the adequacy of our tax provision, which is subject to significant discretion.

Although we believe our tax provision is adequate, the final determination of tax audits and any related disputes could be materially different from our historical income tax provisions and accruals.

The results of audits or related disputes could have an adverse effect on our financial statements for the period or periods for which the applicable final determinations are made.

Our annual net revenue is weighted more heavily toward our fourth fiscal quarter, reflecting our historical strength in sales during the holiday season, while our operating expenses are more equally distributed throughout the year.

As a result, a substantial portion of our operating profits are generated in the fourth quarter of our fiscal year.

For example, we generated approximately 45%, 42% and 39% of our full year operating profit during the fourth quarters of fiscal 2015, fiscal 2014 and fiscal 2013, respectively.

generally defined as a stockholder who becomes a beneficial owner of 15% or more of a Delaware corporation's voting stock, for a three-year period following the date that the stockholder became an interested stockholder.

Fiscal [removed: 2015,] [added: 2016,] fiscal [removed: 2014,] [added: 2015,] and fiscal [removed: 2013] [added: 2014] were 52 week years.

[removed: | • | Our net revenue increased from $1.8 billion in fiscal 2014 to $2.1 billion in fiscal 2015, representing an annual growth rate of 15%. Our] [added: The] increase in net revenue [removed: from fiscal 2014 to fiscal 2015 resulted] [added: was] primarily [removed: from] [added: due to] the addition of [removed: 61] [added: 43] net new company-operated stores [added: during fiscal 2016, as well as increased comparable store sales] and the growth of our direct to consumer segment. [removed: |]

| • | Total comparable sales, which includes comparable store sales and direct to consumer, increased [removed: 5%] [added: 6%] in fiscal [removed: 2015 and increased] [added: 2016 compared to fiscal 2015, or] by [removed: 10%] [added: 7%] on a constant dollar basis. |

[removed: | • | Company-operated stores accounted for 73.6% of total net revenue in fiscal 2015, 75.0% of total net revenue in fiscal 2014 and 77.3% of total net revenue in fiscal 2013.] Comparable store sales [removed: increased by 4%] on a constant dollar basis [removed: for fiscal 2015] [added: increased] primarily as the result of increased traffic which resulted in an increase in the number of transactions, and due to higher average unit retail prices. [removed: |]

[removed: | • |] Income from operations [removed: for fiscal 2015] [added: as a percentage of direct to consumer net revenue has] decreased by [removed: 2%] [added: 30 basis points primarily due] to [removed: $369.1 million, from $376.0 million in fiscal 2014. The decrease in income from operations was a result] [added: deleverage] of [removed: an increase in] selling, general and administrative expenses, partially offset by an increase in gross [removed: profit. As a percentage of net revenue, income from operations decreased to 17.9% compared to 20.9% of net revenue in fiscal 2014. |][added: margin.]

| • | Diluted earnings per share for fiscal [removed: 2015] [added: 2016] were [removed: $1.89,] [added: $2.21] compared to [removed: $1.66] [added: $1.89] in fiscal [removed: 2014.] [added: 2015.] Excluding [removed: certain] [added: the above] tax and related interest adjustments, diluted earnings per share were [removed: $1.86] [added: $2.14] for fiscal [removed: 2015] [added: 2016] and [removed: $1.89] [added: $1.86] for fiscal [removed: 2014.] [added: 2015.] |

Refer to the non-GAAP reconciliation tables contained in the [removed: "Results of Operations"] [added: "Non-GAAP Financial Measures"] section of this "Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations" for reconciliations [removed: of] [added: between] constant dollar [added: changes in net revenue,] total comparable sales, [removed: constant dollar] comparable store sales, [removed: constant dollar changes in] [added: and] direct to consumer net revenue, [added: and] the effective tax rate [removed: excluding certain tax] and [removed: related interest adjustments, and] diluted earnings per share excluding certain tax and related interest [removed: adjustments to] [added: adjustments, and the most directly comparable] measures calculated in accordance with [removed: United States generally accepted accounting principles ("GAAP").][added: GAAP.]

Net revenue is comprised of company-operated store sales, direct to consumer sales through www.lululemon.com, www.ivivva.com, and other country and region specific websites, and other net revenue, which includes outlet sales, showroom sales, sales [added: from temporary locations, sales] to wholesale accounts, warehouse sales, [removed: sales from temporary locations,] and license and supply arrangement net revenue, which consists of royalties as well as sales of our products to licensees.

We expect selling, general and administrative expenses to increase in fiscal [removed: 2016] [added: 2017] as we incur additional operating expenses to support our store and direct to consumer growth, while also making strategic investments to support the long term growth of the business.

To the extent the relative proportion of taxable income in the jurisdictions fluctuates, [added: or the tax legislation in the respective jurisdictions changes,] so will our effective tax rate.

We also anticipate that, in the future, we may start to sell our products through retail locations [removed: located] in countries in which we have not yet operated, in which case, we would become subject to taxation based on the foreign statutory rates in the countries where these sales take place and our effective tax rate could fluctuate accordingly.

| | | January [removed: 31, 2016] [added: 29, 2017] | | | | [removed: February 1, 2015] [added: January 31, 2016] | | | | February [removed: 2, 2014] [added: 1, 2015] | | |

| Net revenue | | $ | [removed: 2,060,523] [added: 2,344,392] | | | $ | [removed: 1,797,213] [added: 2,060,523] | | | $ | [removed: 1,591,188] [added: 1,797,213] | |

| Cost of goods sold | | [removed: 1,063,357] [added: 1,144,775] | | | | [removed: 883,033] [added: 1,063,357] | | | | [removed: 751,112] [added: 883,033] | | |

| Gross profit | | [removed: 997,166] [added: 1,199,617] | | | | [removed: 914,180] [added: 997,166] | | | | [removed: 840,076] [added: 914,180] | | |

| Selling, general and administrative expenses | | [removed: 628,090] [added: 778,465] | | | | [removed: 538,147] [added: 628,090] | | | | [removed: 448,718] [added: 538,147] | | |

| Income from operations | | [removed: 369,076] [added: 421,152] | | | | [removed: 376,033] [added: 369,076] | | | | [removed: 391,358] [added: 376,033] | | |

| Other [removed: (expense) income,] [added: income (expense),] net | | [removed: (581] [added: 1,577] | | [removed: )] | | [removed: 7,102] [added: (581] | | [added: )] | | [removed: 5,768] [added: 7,102] | | |

| Income before income tax expense | | [removed: 368,495] [added: 422,729] | | | | [removed: 383,135] [added: 368,495] | | | | [removed: 397,126] [added: 383,135] | | |

| Income tax expense | | [removed: 102,448] [added: 119,348] | | | | [removed: 144,102] [added: 102,448] | | | | [removed: 117,579] [added: 144,102] | | |

| Net income | | $ | [removed: 266,047] [added: 303,381] | | | $ | [removed: 239,033] [added: 266,047] | | | $ | [removed: 279,547] [added: 239,033] | |

| | | January [added: 29, 2017 | | | January] 31, 2016 | | | February 1, 2015 | | [removed: | February 2, 2014 | |]

| [removed: | | (% of] [added: Change in direct to consumer] net [removed: revenue) |] [added: revenue] | | [added: 13] | [added: %] | | [added: 25] | [added: %] |

| Cost of goods sold | | [removed: 51.6] [added: 48.8] | | | [removed: 49.1] [added: 51.6] | | | [removed: 47.2] [added: 49.1] | |

| Gross profit | | [removed: 48.4] [added: 51.2] | | | [removed: 50.9] [added: 48.4] | | | [removed: 52.8] [added: 50.9] | |

| Selling, general and administrative expenses | | [removed: 30.5] [added: 33.2] | | | [removed: 30.0] [added: 30.5] | | | [removed: 28.2] [added: 30.0] | |

| Income from operations | | [removed: 17.9] [added: 18.0] | | | [removed: 20.9] [added: 17.9] | | | [removed: 24.6] [added: 20.9] | |

| Other [removed: (expense) income,] [added: income (expense),] net | | — | | | [removed: 0.4] [added: —] | | | 0.4 | |

| Income before income tax expense | | [removed: 17.9] [added: 18.0] | | | [removed: 21.3] [added: 17.9] | | | [removed: 25.0] [added: 21.3] | |

| Income tax expense | | [removed: 5.0] [added: 5.1] | | | [removed: 8.0] [added: 5.0] | | | [removed: 7.4] [added: 8.0] | |

| Net income | | 12.9 | % | | [removed: 13.3] [added: 12.9] | % | | [removed: 17.6] [added: 13.3] | % |

[removed: Assuming] [added: On a constant dollar basis, assuming] the average exchange rates in fiscal 2015 remained constant with the average exchange rates in fiscal 2014, [removed: our] net revenue [removed: would have] increased $352.2 million, or 20%.

Gross [removed: profit,] [added: profit] as a percentage of net revenue, or gross margin, decreased 250 basis points, to 48.4% in fiscal 2015 from 50.9% in fiscal 2014.

[added: | • |] The increase in selling, general and administrative expenses was partially offset by an increase in net foreign exchange revaluation gains of $5.6 million. [added: |]

| Income from operations before general corporate [removed: expense] [added: expenses] | | 519,046 | | | | 498,965 | | | | | | | | |

| General corporate [removed: expense] [added: expenses] | | 149,970 | | | | 122,932 | | | | | | | | |

General Corporate [removed: Expense.][added: Expenses.]

General corporate [removed: expense] [added: expenses] increased $27.0 million, or 22%, to $150.0 million in fiscal 2015 from $122.9 million in fiscal 2014.

[removed: General] [added: We expect general] corporate expenses [removed: are expected] to continue to increase in future years as we grow our overall business and require increased efforts at our head office to support our company-operated stores, direct to consumer and other segments.

Fiscal 2016 was a year in which successful execution against our long-term strategies returned the Company to positive operating income growth for the first time in three years.

We have renewed our design-led focus, blending function and fashion with a solid innovation pipeline in place to fuel our long term growth.

We continued to optimize and strategically grow our square footage in North America, exploring new concepts such as our co-located stores and Locals that are tailored and unique to each community.

We made meaningful progress towards building a robust digital ecosystem with key investments in customer relationship management, analytics, and omni-channel capabilities which will be essential in continuing to elevate our guest experience across all touch points.

We continued to expand our collective globally through our international expansion, opening 11 stores in Asia and Europe, which included our first stores in China, South Korea, and Switzerland.

As of January 29, 2017, we operated a total of 54 stores across nine countries outside of North America.

Lastly, we made significant improvements to our product and supply chain infrastructure which resulted in 280 basis points of gross margin expansion from fiscal 2015.

Looking forward in fiscal 2017, we will continue to focus our growth efforts across our four key strategic pillars:

| 1. | Within product innovation, our design-led vision will be concentrated on driving innovation in both our women's and men's categories. |

| 2. | Our digital strategy will center on pursuing our channel agnostic model, improving our web and mobile experience, and leveraging our guest database to amplify how we connect with our collective both online and in-store. |

| 3. | In North America, our priorities are to continue to optimize our square footage through tailored and curated formats that fit with each community, while expanding our omni-channel capabilities. |

| 4. | Finally, in our international markets, our focus is on accelerating our expansion through store densification in key strategic cities while driving brand awareness and guest acquisition in new and existing markets. |

These priorities and investments will continue to position us well for sustainable long term profitable growth.

| • | Net revenue increased 14% to $2.3 billion in fiscal 2016, from $2.1 billion in fiscal 2015. On a constant dollar basis, net revenue increased 14%. Net revenue increased across all segments, and the increase in net revenue was primarily due to the addition of 43 net new company-operated stores during fiscal 2016, as well as increased comparable store sales and the growth of our direct to consumer segment. |

| • | Comparable store sales increased 4% in fiscal 2016 compared to fiscal 2015, or by 5% on a constant dollar basis, primarily as a result of increased dollar value per transaction and improved conversion rates. |

| • | Direct to consumer net revenue increased 13% in fiscal 2016 compared to fiscal 2015, or by 13% on a constant dollar basis, primarily as a result of increased traffic on our e-commerce websites, increased dollar value per transaction, and improved conversion rates. |

| • | Gross profit for fiscal 2016 increased 20% to $1.2 billion, from $1.0 billion in fiscal 2015. Gross profit as a percentage of net revenue, or gross margin, increased to 51.2% compared to 48.4% in fiscal 2015. The increase in gross margin was primarily due to lower product costs and improved average retail prices, partially offset by increased expenses related to our product and supply chain departments and increased occupancy and depreciation costs. |

| • | Income from operations for fiscal 2016 increased 14% to $421.2 million, from $369.1 million in fiscal 2015. As a percentage of net revenue, income from operations increased to 18.0% compared to 17.9% of net revenue in fiscal 2015. |

| • | Income tax expense for fiscal 2016 increased 16% to $119.3 million, from $102.4 million in fiscal 2015. Our effective tax rate for fiscal 2016 was 28.2% compared to 27.8% for fiscal 2015. Fiscal 2016 and fiscal 2015 included net income tax recoveries and related net interest expenses as a result of the finalization of an Advance Pricing Arrangement with the Internal Revenue Service and the Canada Revenue Agency. Our effective tax rate excluding these adjustments was 30.7% for fiscal 2016 compared to 29.5% for fiscal 2015. |

| | | (Percentages) | | | | | | | |

Comparison of Fiscal 2016 to Fiscal 2015

Net revenue increased $283.9 million, or 14%, to $2.344 billion in fiscal 2016 from $2.061 billion in fiscal 2015.

Net revenue increased across all segments.

| | | 2016 | | | | 2015 | | | | 2016 | | | 2015 | |

| Company-operated stores | | $ | 1,704,357 | | | $ | 1,516,323 | | | 72.7 | % | | 73.6 | % |

| Direct to consumer | | 453,287 | | | | 401,525 | | | | 19.3 | | | 19.5 | |

| Other | | 186,748 | | | | 142,675 | | | | 8.0 | | | 6.9 | |

| Net revenue | | $ | 2,344,392 | | | $ | 2,060,523 | | | 100.0 | % | | 100.0 | % |

The following contributed to the increase in net revenue from our company-operated stores segment:

| • | Net revenue from company-operated stores we opened or significantly expanded subsequent to January 31, 2016, and therefore not included in comparable store sales, contributed $126.7 million to the increase. During fiscal 2016 we opened 43 net new company-operated stores, which included 27 stores in the United States, four stores in Canada, three stores in each of China and the United Kingdom, two stores in South Korea, and one store in each of Australia, Hong Kong, Singapore, and Switzerland. |

| • | A comparable store sales increase of 4% in fiscal 2016 compared to fiscal 2015 resulted in a $61.3 million increase to net revenue. Comparable store sales increased 5%, or $66.4 million on a constant dollar basis. The increase in comparable store sales was primarily as a result of increased dollar value per transaction and improved conversion rates. |

Gross profit increased $202.5 million, or 20%, to $1.200 billion in fiscal 2016 from $997.2 million in fiscal 2015.

The increase in gross margin was primarily the result of an increase in product margin of 330 basis points, primarily due to lower product costs, improved average retail prices, and lower costs related to our raw material commitments.

| • | an increase in head office costs other than employee costs of $21.2 million primarily as a result of increased brand and community costs, increased depreciation, and increased information technology costs; |

| • | an increase in net foreign exchange revaluation losses of $20.3 million, primarily related to the revaluation of U.S. dollar cash and receivables held in Canadian subsidiaries. There were net foreign exchange losses of $8.3 million in fiscal 2016 compared to net foreign exchange gains of $12.0 million in fiscal 2015. |

| • | an increase in other costs of $18.5 million for our operating channels such as digital marketing expenses, repairs and maintenance costs, and increased depreciation; and |

Income from operations increased $52.1 million, or 14%, to $421.2 million in fiscal 2016 from $369.1 million in fiscal 2015.

| | | Fiscal Years Ended January 29, 2017 and January 31, 2016 | | | | | | | | | | | | |

| | | 2016 | | | | 2015 | | | | 2016 | | | 2015 | |

| Company-operated stores | | $ | 415,635 | | | $ | 346,802 | | | 24.4 | % | | 22.9 | % |

This discussion summarizes our consolidated operating results, financial condition, and liquidity during the three-year period ending January 31, 2016.

Fiscal 2015 was a year in which we made significant progress on our strategic priorities that positions us well for long term profitable growth.

We strengthened our leadership by filling key executive positions during the year and now have in place a complete, experienced, and culturally aligned management team to drive our strategic priorities towards our 10 year vision.

We reignited our product engine starting with our first global product launch, our new women's pant lines, that brought together the best of product innovation and education.

We also reorganized our design and merchandising teams, resulting in a singular creative voice for our women's and men's product with a renewed focus on design and innovation.

We made key investments in our website, omni-channel capabilities, supply chain, and information technology infrastructure.

These are foundational investments that will support and enable our long term growth.

In addition to continuing our expansion in the United States, we opened company-operated stores for the first time in Germany and Hong Kong and opened additional stores in Singapore and the United Kingdom.

We also opened showrooms in new markets in France, Korea, Malaysia, Sweden, and Switzerland.

As of January 31, 2016, we operated 20 showrooms in 10 different countries in Asia and Europe.

In addition, our licensee in the Middle East opened two licensed stores in the United Arab Emirates during fiscal 2015.

In fiscal 2016, our top priority will be first to strengthen and grow our women's category, specifically with a renewed focus on our tops.

For men's, we will continue to focus on product design, while also adding more dedicated square footage through store expansions.

To further grow our direct to consumer segment, we will make investments in customer relationship management, analytics, and digital marketing, while also launching our new North America website in the first half of fiscal 2016.

In international markets, we will focus our efforts in key cities, while expanding into new markets where we've seen strong traction from our showroom performance.

Our final priority is operational excellence, where we are investing in developing a scalable and world-class supply chain and operational infrastructure that we expect to be a key enabler of our long term growth.

| • | Our direct to consumer segment is an increasingly substantial part of our growth strategy, and now represents 19.5% of our net revenue compared to 17.9% in fiscal 2014 and 16.5% in fiscal 2013. Direct to consumer net revenue increased 30% on a constant dollar basis primarily as the result of an increase in the number of transactions which was driven by increased traffic and higher conversion rates. |

| • | Gross profit for fiscal 2015 increased by 9% to $997.2 million, from $914.2 million in fiscal 2014. As a percentage of net revenue, gross profit decreased to 48.4% compared to 50.9% in fiscal 2014. The decrease in the gross margin was primarily due to an increase in fixed costs, such as occupancy and depreciation, an unfavorable impact of foreign exchange rates, and an increase in markdowns and discounts. |

| • | Income tax expense for fiscal 2015 decreased by 29% to $102.4 million, from $144.1 million in fiscal 2014. Our effective tax rate for fiscal 2015 was 27.8% compared to 37.6% for fiscal 2014. Fiscal 2015 included a net income tax recovery of $7.4 million related to our transfer pricing arrangements and estimated taxes associated with the repatriation of foreign earnings. In addition, fiscal 2015 included a related net interest expense of $3.5 million recorded in other (expense) income, net. Fiscal 2014 included an income tax expense of $33.7 million related to the repatriation of foreign earnings used to fund our share repurchase program. Our effective tax rate excluding these adjustments would have been 29.5% for fiscal 2015 compared to 28.8% for fiscal 2014. |

| Consolidated statements of operations: | | | | | | | | | | | | |

Excluding the effect of foreign currency fluctuations, total comparable sales would have increased by 10%.

Excluding the effect of foreign currency fluctuations, comparable store sales would have increased 4%, or $48.8 million, in fiscal 2015.

Comparable store sales, excluding the effect of foreign currency fluctuations, increased primarily as the result of increased traffic which resulted in an increase in the number of transactions, and due to higher average unit retail prices.

Excluding the effect of foreign exchange fluctuations, direct to consumer net revenue would have increased 30%.

We expect selling, general and administrative expenses to increase in fiscal 2016 as we incur additional operating expenses to support our store and direct to consumer growth, while also making strategic investments to support the long term growth of our business.

Comparison of Fiscal 2014 to Fiscal 2013

Net revenue increased $206.0 million, or 13%, to $1.797 billion in fiscal 2014 from $1.591 billion in fiscal 2013.

The net revenue increase was driven by sales from new stores and the growth of our direct to consumer segment.

Excluding the effect of foreign currency fluctuations, total comparable sales would have increased by 3%.

| | | 2014 | | | | 2013 | | | | 2014 | | | 2013 | |

| Company-operated stores | | $ | 1,348,225 | | | $ | 1,228,999 | | | 75.0 | % | | 77.3 | % |

| Direct to consumer | | 321,180 | | | | 263,083 | | | | 17.9 | | | 16.5 | |

| Other | | 127,808 | | | | 99,106 | | | | 7.1 | | | 6.2 | |

| Net revenue | | $ | 1,797,213 | | | $ | 1,591,188 | | | 100.0 | % | | 100.0 | % |

Net revenue from company-operated stores we opened during fiscal 2014, and during fiscal 2013 prior to sales from such stores becoming part of our comparable stores base, contributed $162.0 million of the increase.

Net new store openings in fiscal 2014 included 40 stores in the United States, including eight ivivva branded stores, three stores in Canada, including two ivivva branded stores, one store in Australia, one store in New

Zealand, two stores in the United Kingdom, and one store in Singapore.

The increase in net revenue from our company-operated stores segment was partially offset by a comparable store sales decrease of 3% in fiscal 2014 compared to fiscal 2013 which resulted in a $42.8 million decrease to net revenue, including the effect of foreign currency fluctuations.

Excluding the effect of foreign currency fluctuations, comparable store sales would have decreased 1%, or $19.1 million, in fiscal 2014.

Comparable store sales have decreased, primarily as the result of lower conversion rates and lower units purchased per transaction.

Therefore, the net [removed: revenues,] [added: revenue,] expenses, assets, and liabilities of our foreign subsidiaries are translated from their functional currencies into U.S. dollars.

As a result, we have been impacted by changes in exchange rates and may be impacted [removed: materially] for the foreseeable future.

The potential impact of currency fluctuation increases as [added: our] international expansion increases.

A [removed: strengthening] [added: weakening] of the U.S. dollar against the Canadian dollar results in:

| • | [removed: a reduction] [added: an increase] in our net revenue upon translation of the sales made by our Canadian operations into U.S. dollars for the purposes of consolidation; |

| • | [removed: a reduction] [added: an increase] in our selling, general and administrative expenses incurred by our Canadian operations [added: upon translation] into U.S. dollars for the purposes of consolidation; and |

| • | foreign exchange [removed: gains] [added: revaluation losses] by our Canadian subsidiaries on U.S. dollar cash and receivables denominated in U.S. dollars. |

During fiscal [removed: 2014,] [added: 2016,] the change in the relative value of the U.S. dollar against the Canadian dollar resulted in a [removed: $103.3] [added: $41.7] million [removed: increase] [added: reduction] in accumulated other comprehensive loss within stockholders' equity.

A 10% appreciation in the relative value of the U.S. dollar against the Canadian dollar compared to the exchange rates in effect for fiscal [removed: 2015] [added: 2016] would have resulted in [removed: lost] [added: additional] income from operations of approximately [removed: $2.2] [added: $0.2] million in fiscal [removed: 2015.][added: 2016.]

However, in the future, in an effort to mitigate [removed: losses associated with] these risks, we may at times enter into derivative financial instruments, although we have not historically done so.

Our revolving credit [removed: facilities] [added: facility, which is described in Note 8 to the consolidated financial statements included in Item 8 of Part II of this report,] provide us with available borrowings in [added: an] amount up to [removed: $15.0] [added: $150.0] million in the aggregate.

Because our revolving credit [removed: facilities bear] [added: facility bears] interest at a variable rate, we will be exposed to market risks relating to changes in interest rates, if we have a meaningful outstanding balance.

As of January [removed: 31, 2016,] [added: 29, 2017,] aside from letters of [removed: credit,] [added: credit of $0.8 million,] we had no [added: other borrowings] outstanding [removed: balances] under [removed: our revolving facilities.][added: this credit facility.]

We currently do not engage in any interest rate hedging activity and currently have no intention to do [removed: so in the foreseeable future.][added: so.]

lululemon athletica inc. is a designer, distributor, and retailer of [removed: technical] [added: healthy lifestyle inspired] athletic apparel.

Since our inception, we have developed a distinctive corporate [removed: culture with] [added: culture, and we have] a mission to produce products which create transformational experiences for people to live happy, healthy, fun lives.

In this Annual Report on Form 10-K ("10-K" or "Report") for the fiscal year ended January [removed: 31, 2016] [added: 29, 2017] ("fiscal [removed: 2015"),] [added: 2016"),] lululemon athletica inc. (together with its subsidiaries) is referred to as "lululemon," "the Company," "we," "us" or "our."

Our healthy lifestyle inspired athletic apparel is marketed under the lululemon [removed: athletica] and ivivva [removed: athletica] brand names.

We offer a comprehensive line of apparel and accessories for women, [removed: men,] [added: men] and female youth.

Our apparel assortment includes items such as pants, shorts, tops, and jackets designed for healthy lifestyle and athletic activities such as yoga, running, [added: training, most] other sweaty pursuits, and athletic wear for female youth.

[removed: Our] [added: We also offer] fitness-related [removed: accessories include] [added: accessories, including] an array of items such as bags, socks, underwear, yoga mats, and water bottles.

She is increasingly tasked with the dual responsibilities of career and family and is constantly challenged to balance her work, [removed: life] [added: life,] and health.

In addition, we believe consumer purchase decisions are driven by both an actual need for functional products and a desire to live a particular [added: lifestyle.]

[removed: As such,] we believe the credibility and authenticity of our brand expands our potential market beyond just athletes to those who desire to lead an active, healthy, and balanced life.

We also generate net revenue from our outlets, showrooms, sales [added: from temporary locations, sales] to wholesale accounts, warehouse sales, [removed: sales from temporary locations,] and license and supply arrangements.

As of January [removed: 31, 2016,] [added: 29, 2017,] we operated [removed: 363 company-operated] [added: 406] stores located in the United States, Canada, Australia, [removed: New Zealand,] the United Kingdom, [removed: Singapore,] [added: New Zealand, China,] Hong Kong, [added: Singapore, South Korea,] Germany, [removed: and] Puerto [removed: Rico.][added: Rico and Switzerland.]

As of January [removed: 31, 2016,] [added: 29, 2017,] our retail footprint included [removed: 363] [added: 406] company-operated stores.

While most of our company-operated stores are branded [removed: lululemon athletica, 43] [added: lululemon, 55] of our company-operated stores are branded ivivva [removed: athletica] and specialize in athletic wear for female youth.

Our company-operated stores by brand, and by country, as of January [removed: 31, 2016] [added: 29, 2017] and [removed: February 1, 2015,] [added: January 31, 2016,] are summarized in the table below:

| | | January [removed: 31, 2016] [added: 29, 2017] | | | [removed: February 1, 2015] [added: January 31, 2016] | |

| lululemon [removed: athletica] | | | | | | |

| United States | | [removed: 229] [added: 245] | | | [removed: 200] [added: 229] | |

| Canada | | [removed: 48] [added: 51] | | | [removed: 46] [added: 48] | |

| Australia | | [removed: 26] [added: 27] | | | 26 | |

| United Kingdom | | [removed: 6] [added: 9] | | | [removed: 2] [added: 6] | |

| Singapore | | [removed: 2] [added: 3] | | | [removed: 1] [added: 2] | |

| Hong Kong | | [removed: 2] [added: 3] | | | [removed: —] [added: 2] | |

| Germany | | 1 | | | [removed: —] [added: 1] | |

| Puerto Rico | | 1 | | | [removed: —] [added: 1] | |

| ivivva [removed: athletica] | | | | | | |

| United States | | [removed: 31] [added: 42] | | | [removed: 11] [added: 31] | |

| Canada | | [removed: 12] [added: 13] | | | [removed: 11] [added: 12] | |

| Total | | [removed: 363] [added: 406] | | | [removed: 302] [added: 363] | |

We opened [removed: 61] [added: 43] net new company-operated stores in fiscal [removed: 2015,] [added: 2016,] including [removed: eight] [added: 12 net] new stores outside of North America.

In fiscal [removed: 2016,] [added: 2017,] our new store growth will [removed: be] [added: come] primarily [removed: focused on continuing the build-out of our] [added: from new] company-operated stores in the United States [removed: while also expanding] [added: and an acceleration in] our [removed: retail footprint] [added: company-operated store openings] in [removed: Asia and Europe.][added: Asia.]

In fiscal [removed: 2015,] [added: 2016,] we closed [removed: one] [added: three] of our company-operated stores.

As we continue our evaluation we may, in future periods, close or relocate additional company-operated [removed: store locations.][added: stores.]

During fiscal [removed: 2015,] [added: 2016,] our company-operated stores open at least one year, which average approximately [removed: 2,968] [added: 2,941] square feet, averaged sales of [removed: $1,541] [added: $1,521] per square foot.

Direct to consumer is [removed: an increasingly] [added: a] substantial part of our business, representing approximately [removed: 19.5% of our net revenue in fiscal 2015, compared to 17.9% of our net revenue in fiscal 2014 and 16.5%] [added: 19.3%] of our net revenue in fiscal [removed: 2013.][added: 2016.]

Other net revenue accounted for [removed: 6.9%] [added: 8.0%] of total net revenue in fiscal [removed: 2015,] [added: 2016,] compared to [removed: 7.1%] [added: 6.9%] in fiscal [removed: 2014,] [added: 2015,] and [removed: 6.2%] [added: 7.1%] of total net revenue in fiscal [removed: 2013.][added: 2014.]

In January 2015, we entered into a license and supply arrangement with a partner in the Middle East which grants our partner the right to operate lululemon [removed: athletica] branded retail locations in the United Arab Emirates, Kuwait, Qatar, Oman, and Bahrain for an initial term of five years.

Under this [removed: arrangement,] [added: arrangement] we supply [removed: our] [added: the] partner with lululemon products, [removed: training,] [added: training] and other support.

As of January [removed: 31, 2016,] [added: 29, 2017,] there were [removed: two] [added: three] licensed stores in the United Arab [removed: Emirates, which are] [added: Emirates and one licensed store in Qatar,] not included in the above company-operated stores table.

We pursue a multi-faceted strategy which leverages our local ambassadors, [added: digital marketing and] social media, in-store community boards, and a variety of grassroots initiatives.

We promote a set of core values in our business which include taking personal responsibility, nurturing entrepreneurial spirit, acting with honesty and courage, valuing connection, and choosing to have fun.

As such,

Segment information is included in Note 16 to our consolidated financial statements included in Item 8 of Part II of this report.

| China | | 3 | | | — | |

| South Korea | | 2 | | | — | |

| Switzerland | | 1 | | | — | |

| | | 351 | | | 320 | |

| | | 55 | | | 43 | |

In November 2016, we entered into a license and supply agreement with a partner which grants our partner the right to operate lululemon branded retail locations in Mexico for a term of ten years, subject to certain conditions.

We retain the rights to sell lululemon products through our e-commerce websites in Mexico.

Under this arrangement we supply the partner with lululemon products, training and other support.

As of January 29, 2017 there were no licensed retail locations in operation in Mexico.

We develop proprietary fabrics and collaborate with leading fabric and trims suppliers to manufacture fabrics and trims that we ultimately protect through agreements, trademarks and trade-secrets.

We own our distribution center in Columbus, Ohio, and lease our other distribution facilities.

The approximate square footage of each facility is included in Item 2 of Part I of this report.

We have trademark rights on most of our products and believe having distinctive marks that are readily identifiable is an important factor in building our brand image and in distinguishing our products from the products of others.

We consider our lululemon and wave design trademarks to be among our most valuable assets.

In addition, we own many other trademarks for names of several of our brands, slogans, fabrics and products.

The public may read and copy any materials filed by us with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Room 1580, Washington, DC 20549.

The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

We promote a set of core values in our business which include developing the highest quality products, operating with integrity, leading a balanced and fun life, and nurturing entrepreneurial spirit.

We also believe longer-term growth in athletic participation will be reinforced as the aging Baby Boomer generation focuses more on longevity.

lifestyle.

| | | 320 | | | 280 | |

| | | 43 | | | 22 | |

We collaborate with leading fabric suppliers to develop fabrics that we ultimately trademark for brand recognition whenever possible.

We use a wide variety of fabrics in our products, including our Luon fabric.

We obtain substantially all of our Luon fabric, which represents approximately 30% of the fabric we use in our products, from four suppliers.

We own our distribution center in Columbus (Ohio), which has approximately 307,000 square feet.

The distribution facilities in Sumner (Washington), Vancouver (British Columbia), and Melbourne (Victoria) are leased and are approximately 167,000, 120,000, and 54,000 square feet, respectively.

During fiscal 2015, we entered into a new lease for an approximately 156,000 square foot distribution center in Vancouver.

We plan to relocate our existing leased distribution center in Vancouver to this premises.

We believe we own the material trademarks used in connection with the marketing, distribution and sale of all of our products in the United States, Canada and in the other countries in which our products are currently or intended to be either sold or manufactured.

Our major trademarks include lululemon athletica & design, the logo design (WAVE design) and lululemon as a word mark.

We own trademark registrations for names of several of our brands, slogans, fabrics, and products including ivivva, ivivva logo (kite design), Luon, Silverescent, Pace Breaker, Rulu, Scuba, Wunder Under, VitaSea, Boolux, Luxtreme, Groove Pant, Stuff Your Bra, Set-My-Ponytail-Free, Define Jacket, Light as Air, Booby Bracer, Ta Ta Tamer, and Power Y.

In addition to the legal matters described [removed: below,] [added: in Note 12 to our consolidated financial statements included in Item 8 of Part II of this report,] we are, from time to time, involved in routine legal matters incidental to the conduct of our business, including legal matters such as initiation and defense of proceedings to protect intellectual property rights, personal injury claims, product liability claims, [added: employment claims,] and similar matters.

On July 15, 2015, plaintiffs Hallandale Beach Police Officers and Firefighters' Personnel Retirement Fund and Laborers' District Council Industry Pension Fund filed in the Delaware Court of Chancery a derivative lawsuit on behalf of lululemon against certain of our current and former directors, captioned Laborers' District Council Industry Pension Fund v.

Bensoussan, et al., C.A. No. 11293-CB.

Plaintiffs claim that the individual defendants breached their fiduciary duties to lululemon by allegedly failing to investigate certain trades of lululemon stock owned by Dennis J.

Wilson in 2013.

Plaintiffs also claim that Mr. Wilson breached his fiduciary duties by making his broker aware of certain non-public, material events prior to executing sales of lululemon stock on Mr. Wilson's behalf.

The defendants have filed motions to dismiss the action for failure to adequately plead that demand on the board was excused and the individual defendants have filed motions for failure to state a claim upon which relief may be granted.

On October 9, 2015, certain of our current and former hourly employees filed a class action lawsuit in the Supreme Court of New York entitled Rebecca Gathmann-Landini et al v.

lululemon USA inc. On December 2, 2015, the case was removed to the United States District Court for the Eastern District of New York.

The lawsuit alleges that we violated various New York

labor codes by failing to pay all earned wages, including overtime compensation.

The plaintiffs are seeking an unspecified amount of damages.

We intend to vigorously defend this matter.

We have indemnification agreements with certain of our current and former officers and directors that may require us, among other things, to indemnify such current or former officers and directors against certain liabilities that may arise by reason of their status or service as directors or officers and to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified.

We are unable at this time to predict the amount of our legal expenses associated with these proceedings and any settlement or damages associated with these matters.

In the event that we are unsuccessful in our defense, or if we pursue settlement with regard to any of these actions, we could be required to pay significant final settlement amounts and/or judgments that exceed the limits of our insurance policies or the carriers may decline to fund such final settlements and/or judgments, which could have a material adverse effect on our financial condition and liquidity.

Regardless of whether any of the claims asserted against us in these actions are valid, or whether we are ultimately held liable, such litigation may be expensive to defend and may divert resources away from our operations and negatively impact earnings.

Further, we may not be able to obtain adequate insurance to protect us from these types of litigation matters or extraordinary business losses.

For the fiscal year ended January [removed: 31, 2016][added: 29, 2017]

The aggregate market value of the voting stock held by non-affiliates of the registrant on July [removed: 31, 2015] [added: 29, 2016] was approximately [removed: $5,091,622,000.][added: $4,913,000,000.]

Such aggregate market value was computed by reference to the closing price of the common stock as reported on the Nasdaq Global Select Market on July [removed: 31, 2015.][added: 29, 2016.]

For purposes of determining this amount only, the registrant has defined affiliates as including the executive officers, directors, and owners of 10% or more of the outstanding [removed: common] [added: voting] stock of the registrant on July [removed: 31, 2015.][added: 29, 2016.]

At March [removed: 24, 2016] [added: 23, 2017] there were [removed: 127,494,121] [added: 127,272,795] shares of the registrant's common stock, par value $0.005 per share, outstanding.

At March [removed: 24, 2016,] [added: 23, 2017,] there were outstanding [removed: 9,803,819] [added: 9,780,927] exchangeable shares of Lulu Canadian Holding, Inc., a wholly-owned subsidiary of the registrant.

In addition, at March [removed: 24, 2016,] [added: 23, 2017,] the registrant had outstanding [removed: 9,803,819] [added: 9,780,927] shares of special voting stock, through which the holders of exchangeable shares of Lulu Canadian Holding, Inc. may exercise their voting rights with respect to the registrant.

| Portions of Proxy Statement for the [removed: 2016] [added: 2017] Annual Meeting of Stockholders | | Part III |

| Item 1. | [removed: [BUSINESS](#sB6D755F65F85556EC6B2EB31FBBF576E)] [added: [BUSINESS](#sFDCD16A6734991DDBB3318514F8FCE0E)] | [removed: [1](#sB6D755F65F85556EC6B2EB31FBBF576E)] [added: [1](#sFDCD16A6734991DDBB3318514F8FCE0E)] |

| Item 1A. | [RISK [removed: FACTORS](#s606C69695B0EE2691072EB31FC1C5CAD)] [added: FACTORS](#s425AADF2A36C1F130A1718514FC7E95A)] | [removed: [5](#s606C69695B0EE2691072EB31FC1C5CAD)] [added: [5](#s425AADF2A36C1F130A1718514FC7E95A)] |

| Item 2. | [removed: [PROPERTIES](#sC5DF76F1688E77C70D0FEB31FC7AA0F4)] [added: [PROPERTIES](#s5346D730DDE743B551D118514FE92ADC)] | [removed: [14](#sC5DF76F1688E77C70D0FEB31FC7AA0F4)] [added: [13](#s5346D730DDE743B551D118514FE92ADC)] |

| Item 3. | [LEGAL [removed: PROCEEDINGS](#s7F542B461D4A3B063CC1EB31FC990B77)] [added: PROCEEDINGS](#sF17EE8D6B13330B34E3E18515004880F)] | [removed: [14](#s7F542B461D4A3B063CC1EB31FC990B77)] [added: [14](#sF17EE8D6B13330B34E3E18515004880F)] |

| Item 5. | [MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY [removed: SECURITIES](#s21031EF154D05E52275CEB31F3418599)] [added: SECURITIES](#s6C3F665A77EACBE839FC185149664F08)] | [removed: [16](#s21031EF154D05E52275CEB31F3418599)] [added: [15](#s6C3F665A77EACBE839FC185149664F08)] |

| Item 6. | [SELECTED CONSOLIDATED FINANCIAL [removed: DATA](#s4D5B7A7AFF4E575931AAEB31F3CEDFA2)] [added: DATA](#s6F3F5FEB70D7FE2EAD2E1851473CBE80)] | [removed: [19](#s4D5B7A7AFF4E575931AAEB31F3CEDFA2)] [added: [18](#s6F3F5FEB70D7FE2EAD2E1851473CBE80)] |

| Item 7. | [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF [removed: OPERATIONS](#sF292DB20A8D9AED40514EB31FDB2CB4C)] [added: OPERATIONS](#s29C945FE2D91CC11F3AD185150D8AF33)] | [removed: [20](#sF292DB20A8D9AED40514EB31FDB2CB4C)] [added: [19](#s29C945FE2D91CC11F3AD185150D8AF33)] |

| Item 7A. | [QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET [removed: RISK](#sADF0763DF1CB6B2DF163EB32011E1986)] [added: RISK](#s57971B694A7C10419C781851529F0812)] | [removed: [35](#sADF0763DF1CB6B2DF163EB32011E1986)] [added: [34](#s57971B694A7C10419C781851529F0812)] |

| Item 8. | [FINANCIAL STATEMENTS AND SUPPLEMENTARY [removed: DATA](#sE8B5E7C2B08A6B2C7045EB32013DB85A)] [added: DATA](#sC38814ADB414B9987171185152D22E0E)] | [removed: [36](#sE8B5E7C2B08A6B2C7045EB32013DB85A)] [added: [36](#sC38814ADB414B9987171185152D22E0E)] |

| Item 9A. | [CONTROLS AND [removed: PROCEDURES](#sA21556B32F8E7226A088EB320912728D)] [added: PROCEDURES](#sD2A12E48EF39042FCD9A185157603164)] | [removed: [61](#sA21556B32F8E7226A088EB320912728D)] [added: [63](#sD2A12E48EF39042FCD9A185157603164)] |

| [PART [removed: III](#s6CC524BAF4E32FD525CDEB3209238FFF)] [added: III](#s5EBC29BAA4BE2378E42418515781625F)] | | |

| Item 10. | [DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE [removed: GOVERNANCE](#s1CCCDE92ACDAD56D9E61EB320929BD85)] [added: GOVERNANCE](#s28B47585553B0C2F212D185157B47909)] | [removed: [62](#s1CCCDE92ACDAD56D9E61EB320929BD85)] [added: [64](#s28B47585553B0C2F212D185157B47909)] |

| Item 11. | [EXECUTIVE [removed: COMPENSATION](#sBA66610CF070922BEB43EB320936A667)] [added: COMPENSATION](#sEA64BF8AF4DA6EB3C3D8185157D4B843)] | [removed: [62](#sBA66610CF070922BEB43EB320936A667)] [added: [64](#sEA64BF8AF4DA6EB3C3D8185157D4B843)] |

| Item 12. | [SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER [removed: MATTERS](#s5C42F9CAA7E5DFFBB267EB31F3CE02B1)] [added: MATTERS](#s67B9CD55AA2885E3A5AF185147439484)] | [removed: [62](#s5C42F9CAA7E5DFFBB267EB31F3CE02B1)] [added: [64](#s67B9CD55AA2885E3A5AF185147439484)] |

| Item 13. | [CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR [removed: INDEPENDENCE](#s22514136FBA2E19AC0F6EB3209750908)] [added: INDEPENDENCE](#sC40E471CF7F77639C17C185158269887)] | [removed: [63](#s22514136FBA2E19AC0F6EB3209750908)] [added: [65](#sC40E471CF7F77639C17C185158269887)] |

| Item 14. | [PRINCIPAL ACCOUNTANT FEES AND [removed: SERVICES](#s766DCEDCDBAEC60C0B59EB320996A3AF)] [added: SERVICES](#sDB935DA8B339F091ABE418515859CB45)] | [removed: [63](#s766DCEDCDBAEC60C0B59EB320996A3AF)] [added: [65](#sDB935DA8B339F091ABE418515859CB45)] |

| Item 15. | [EXHIBITS AND FINANCIAL STATEMENT [removed: SCHEDULE](#s34F0BD14109A54079BD9EB3209E913F0)] [added: SCHEDULE](#s64A86D1FCA1E5779D5D8185158ACEEDA)] | [removed: [64](#s34F0BD14109A54079BD9EB3209E913F0)] [added: [66](#s64A86D1FCA1E5779D5D8185158ACEEDA)] |

We use words such as "anticipates," "believes," "estimates," "may," "intends," [removed: "expects"] [added: "expects,"] and similar expressions to identify forward-looking statements.

10-K 1 lulu-20170129x10k.htm 10-K

| [PART I](#s4DE17F8E2036DE45F72318514F3C4F4F) | | |

| [PART II](#s50C38164D5C5BDC609ED1851503634DB) | | |

| | [INDEX FOR NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS](#sb1a9ebeb36cc42dda1ec35b6dce5f477) | [43](#sb1a9ebeb36cc42dda1ec35b6dce5f477) |

| [PART IV](#s19B81BA0B581CE617C251851587BC193) | | |

10-K 1 lulu-20160131x10k.htm 10-K

| [PART I](#s2CEFB750217F8B0E4AB4EB31FB618FEE) | | |

| [PART II](#sB6D5F288F7C9C9270370EB31FCA98536) | | |

| [PART IV](#s8BDDE373A012F7467E21EB3209D3DA52) | | |

[removed: We currently operate four] [added: As of January 29, 2017, we operated five] distribution centers located in the United States, Canada, and Australia.

The general location, use and approximate size of our [added: principal] owned properties at January [removed: 31, 2016,] [added: 29, 2017,] are set forth below:

| Columbus, OH | | Distribution Center | | [removed: 307,000] [added: 310,000] | |

| Vancouver, BC | | Executive and Administrative Offices | | [removed: 78,000] [added: 140,000] | |

The general location, use, approximate size and lease renewal date of our principal non-retail leased properties at January [removed: 31, 2016,] [added: 29, 2017,] are set forth below:

| Sumner, WA | | Distribution Center | | [removed: 167,000] [added: 150,000] | | | [removed: April] [added: May] 2020 |

| Vancouver, BC | | Distribution Center | | [removed: 120,000] [added: 110,000] | | | [removed: November] [added: April] 2017 |

| Vancouver, BC | | Executive and Administrative Offices | | [removed: 58,000] [added: 60,000] | | | May 2020 |

| Melbourne, VIC | | Distribution Center | | [removed: 54,000] [added: 55,000] | | | [removed: September 2016] [added: July 2017] |

| Melbourne, VIC | | Executive and Administrative Offices | | [removed: 28,000] [added: 25,000] | | | September 2019 |

As of January [removed: 31, 2016,] [added: 29, 2017,] we leased approximately [removed: 1,065,000] [added: 1.2 million] gross square feet relating to [removed: 361] [added: 404] of our [removed: 363] [added: 406] stores.

All of our leases require a fixed annual rent, and [removed: most] [added: the majority] require the payment of additional rent if store sales exceed a negotiated amount.

During fiscal 2016 we began relocating our existing leased distribution center in Vancouver, BC to a new 145,000 square foot leased premises in Vancouver, BC.

This was completed in early fiscal 2017.

| Vancouver, BC | | Distribution Center | | 145,000 | | | January 2031 |

| Vancouver, BC | | Executive and Administrative Offices | | 25,000 | | | June 2023 |

During fiscal 2015 we entered into a new lease for an approximately 156,000 square foot distribution center in Vancouver, BC which expires in January 2031.

We plan to relocate our existing leased distribution center in Vancouver, BC to this premises.

| Fiscal Year Ended [removed: February 1, 2015] [added: January 29, 2017] | | | | | | | | |

As of [removed: January 31, 2016,] [added: March 23, 2017,] there were approximately 800 holders of record of our common stock.

The graph set forth below compares the cumulative total stockholder return on our common stock between January [removed: 30, 2011] [added: 29, 2012] (the date of our fiscal year end five years ago) and January [removed: 31, 2016,] [added: 29, 2017,] with the cumulative total return of (i) the S&P 500 Index and (ii) S&P 500 Apparel, Accessories & Luxury Goods Index, over the same period.

This graph assumes the investment of $100 on January [removed: 30, 2011] [added: 29, 2012] at the closing sale price our common stock, the S&P 500 Index and the S&P Apparel, Accessories & Luxury Goods Index and assumes the reinvestment of dividends, if any.

Information used in the graph was obtained from [removed: the Nasdaq and S&P Capital IQ websites, sources] [added: Bloomberg, a source] believed to be reliable, but we are not responsible for any errors or omissions in such information.

[removed: ][added: ]

| | | [removed: 30-Jan-11 | | | |] 29-Jan-12 | | | | 03-Feb-13 | | | | 02-Feb-14 | | | | 01-Feb-15 | | | | 31-Jan-16 | | | [added: | 29-Jan-17 | | |]

| S&P 500 Apparel, Accessories & Luxury Goods Index | | $ | 100.00 | | | $ | [removed: 140.71] [added: 91.54] | | | $ | [removed: 128.80] [added: 104.75] | | | $ | [removed: 147.40] [added: 107.46] | | | $ | [removed: 151.22] [added: 88.93] | | | $ | [removed: 125.13] [added: 74.60] | |

The following table provides information regarding our purchases of shares of our common stock during the thirteen weeks ended January [removed: 31, 2016] [added: 29, 2017] related to our stock repurchase program:

| (1) | Monthly information is presented by reference to our fiscal periods during our fourth quarter of fiscal [removed: 2015.] [added: 2016.] |

| (2) | Our stock repurchase program was approved by our board of directors in [removed: June 2014.] [added: December 2016.] Common shares are repurchased in the open market at prevailing market prices, including under written plans complying with the provisions of Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934, with the timing and actual number of common shares repurchased depending upon market conditions, eligibility to trade, and other factors. The repurchases may be made up until [removed: June 2016,] [added: December 2018,] and the maximum dollar value of shares to be repurchased is [removed: $450] [added: $100] million. |

The following table provides information regarding our purchases of shares of our common stock during the thirteen weeks ended January [removed: 31, 2016] [added: 29, 2017] related to our Employee Share Purchase Plan:

| Fourth Quarter | | $ | 69.90 | | | $ | 54.61 | |

| Third Quarter | | 80.65 | | | | 54.88 | | |

| Second Quarter | | 77.80 | | | | 60.07 | | |

| First Quarter | | 68.69 | | | | 56.88 | | |

This does not include persons whose stock is in nominee or "street name" accounts through brokers.

| lululemon athletica inc. | | $ | 100.00 | | | $ | 105.83 | | | $ | 71.26 | | | $ | 103.31 | | | $ | 96.80 | | | $ | 104.21 | |

| S&P 500 Index | | $ | 100.00 | | | $ | 114.95 | | | $ | 135.42 | | | $ | 151.56 | | | $ | 147.40 | | | $ | 174.32 | |

| October 31, 2016 - November 27, 2016 | | — | | | $ | — | | | — | | | $ | — | |

| November 28, 2016 - January 1, 2017 | | 2,984 | | | 64.44 | | | | 2,984 | | | 99,807,713 | | |

| January 2, 2017 - January 29, 2017 | | 8,934 | | | 64.57 | | | | 8,934 | | | 99,230,880 | | |

| Total | | 11,918 | | | | | | | 11,918 | | | | | |

| October 31, 2016 - November 27, 2016 | | 11,539 | | | $ | 55.83 | | | 11,539 | | | 5,063,944 | |

| November 28, 2016 - January 1, 2017 | | 15,012 | | | 67.70 | | | | 15,012 | | | 5,048,932 | |

| January 2, 2017 - January 29, 2017 | | 9,126 | | | 67.34 | | | | 9,126 | | | 5,039,806 | |

| Total | | 35,677 | | | | | | | 35,677 | | | | |

| (1) | Monthly information is presented by reference to our fiscal periods during our fourth quarter of fiscal 2016. |

| Fourth Quarter | | $ | 67.48 | | | $ | 41.29 | |

| Third Quarter | | 45.19 | | | | 38.37 | | |

| Second Quarter | | 45.67 | | | | 37.25 | | |

| First Quarter | | 54.56 | | | | 44.53 | | |

| lululemon athletica inc. | | $ | 100.00 | | | $ | 186.88 | | | $ | 197.78 | | | $ | 133.17 | | | $ | 193.06 | | | $ | 180.91 | |

| S&P 500 Index | | $ | 100.00 | | | $ | 103.13 | | | $ | 118.56 | | | $ | 139.66 | | | $ | 156.31 | | | $ | 152.02 | |

| November 2, 2015 - November 29, 2015 | | 699,106 | | | $ | 48.55 | | | 699,106 | | | $ | 98,784,068 | |

| November 30, 2015 - January 3, 2016 | | 1,180,281 | | | 49.29 | | | | 1,180,281 | | | 40,603,314 | | |

| January 4, 2016 - January 31, 2016 | | 224,406 | | | 53.72 | | | | 224,406 | | | 28,548,349 | | |

| Total | | 2,103,793 | | | | | | | 2,103,793 | | | | | |

| November 2, 2015 - November 29, 2015 | | 10,402 | | | $ | 50.32 | | | 10,402 | | | 5,188,628 | |

| November 30, 2015 - January 3, 2016 | | 16,331 | | | 51.04 | | | | 16,331 | | | 5,172,297 | |

| January 4, 2016 - January 31, 2016 | | 9,015 | | | 59.26 | | | | 9,015 | | | 5,163,282 | |

| Total | | 35,748 | | | | | | | 35,748 | | | | |

The selected consolidated financial data set forth below is derived from our consolidated financial statements and should be read in conjunction with our consolidated financial statements for the years ended January [added: 29, 2017, January] 31, 2016, February 1, 2015, February 2, [removed: 2014,] [added: 2014 and] February 3, [removed: 2013 and January 29, 2012.][added: 2013.]

The consolidated statement of operations and comprehensive income data for each of the years ended January [added: 29, 2017, January] 31, [removed: 2016,] [added: 2016 and] February 1, 2015 and [removed: February 2, 2014 and] the consolidated balance sheet data as of January [added: 29, 2017 and January] 31, 2016 [removed: and February 1, 2015] is derived from, and qualified by reference to, our audited consolidated financial statements and related notes appearing elsewhere in this Annual Report.

| | | January [added: 29, 2017 | | | | January] 31, 2016 | | | | February 1, 2015 | | | | February 2, 2014 | | | | February 3, 2013 | | | [removed: | January 29, 2012 | | |]

| Net revenue | | $ | [removed: 2,060,523] [added: 2,344,392] | | | $ | [removed: 1,797,213] [added: 2,060,523] | | | $ | [removed: 1,591,188] [added: 1,797,213] | | | $ | [removed: 1,370,358] [added: 1,591,188] | | | $ | [removed: 1,000,839] [added: 1,370,358] | |

| Cost of goods sold | | [removed: 1,063,357] [added: 1,144,775] | | | | [removed: 883,033] [added: 1,063,357] | | | | [removed: 751,112] [added: 883,033] | | | | [removed: 607,532] [added: 751,112] | | | | [removed: 431,488] [added: 607,532] | | |

| Gross profit | | [removed: 997,166] [added: 1,199,617] | | | | [removed: 914,180] [added: 997,166] | | | | [removed: 840,076] [added: 914,180] | | | | [removed: 762,826] [added: 840,076] | | | | [removed: 569,351] [added: 762,826] | | |

| Selling, general and administrative expenses | | [removed: 628,090] [added: 778,465] | | | | [removed: 538,147] [added: 628,090] | | | | [removed: 448,718] [added: 538,147] | | | | [removed: 386,387] [added: 448,718] | | | | [removed: 282,393] [added: 386,387] | | |

| Income from operations | | [removed: 369,076] [added: 421,152] | | | | [removed: 376,033] [added: 369,076] | | | | [removed: 391,358] [added: 376,033] | | | | [removed: 376,439] [added: 391,358] | | | | [removed: 286,958] [added: 376,439] | | |

| Other [removed: (expense) income,] [added: income (expense),] net | | [added: 1,577 | | | |] (581 | | ) | | 7,102 | | | | 5,768 | | | | 4,957 | | | [removed: | 2,500 | | |]

| Income before income tax expense | | [removed: 368,495] [added: 422,729] | | | | [removed: 383,135] [added: 368,495] | | | | [removed: 397,126] [added: 383,135] | | | | [removed: 381,396] [added: 397,126] | | | | [removed: 289,458] [added: 381,396] | | |

| Income tax expense | | [removed: 102,448] [added: 119,348] | | | | [removed: 144,102] [added: 102,448] | | | | [removed: 117,579] [added: 144,102] | | | | [removed: 109,965] [added: 117,579] | | | | [removed: 104,494] [added: 109,965] | | |

| Net income | | [removed: 266,047] [added: 303,381] | | | | [removed: 239,033] [added: 266,047] | | | | [removed: 279,547] [added: 239,033] | | | | [removed: 271,431] [added: 279,547] | | | | [removed: 184,964] [added: 271,431] | | |

| Net income attributable to non-controlling interest | | — | | | | — | | | | — | | | | [removed: 875] [added: —] | | | | [removed: 901] [added: 875] | | |

| Net income attributable to lululemon athletica inc. | | $ | [removed: 266,047] [added: 303,381] | | | $ | [removed: 239,033] [added: 266,047] | | | $ | [removed: 279,547] [added: 239,033] | | | $ | [removed: 270,556] [added: 279,547] | | | $ | [removed: 184,063] [added: 270,556] | |

| Other comprehensive [removed: (loss) income:] [added: income (loss):] | | | | | | | | | | | | | | | | | | | | |

| Foreign currency translation adjustment | | [added: 36,703 | | | |] (64,796 | | ) | | (105,339 | | ) | | (89,158 | | ) | | (459 | | ) | [removed: | 1,220 | | |]

| Comprehensive income | | $ | [removed: 201,251] [added: 340,084] | | | $ | [removed: 133,694] [added: 201,251] | | | $ | [removed: 190,389] [added: 133,694] | | | $ | [removed: 270,097] [added: 190,389] | | | $ | [removed: 185,283] [added: 270,097] | |

| Basic earnings per share | | $ | [removed: 1.90] [added: 2.21] | | | $ | [removed: 1.66] [added: 1.90] | | | $ | [removed: 1.93] [added: 1.66] | | | $ | [removed: 1.88] [added: 1.93] | | | $ | [removed: 1.29] [added: 1.88] | |

| Diluted earnings per share | | $ | [removed: 1.89] [added: 2.21] | | | $ | [removed: 1.66] [added: 1.89] | | | $ | [removed: 1.91] [added: 1.66] | | | $ | [removed: 1.85] [added: 1.91] | | | $ | [removed: 1.27] [added: 1.85] | |

| Basic weighted-average number of shares outstanding | | [removed: 140,365] [added: 137,086] | | | | [removed: 143,935] [added: 140,365] | | | | [removed: 144,913] [added: 143,935] | | | | [removed: 144,000] [added: 144,913] | | | | [removed: 143,196] [added: 144,000] | | |

| Diluted weighted-average number of shares outstanding | | [removed: 140,610] [added: 137,302] | | | | [removed: 144,298] [added: 140,610] | | | | [removed: 146,043] [added: 144,298] | | | | [removed: 145,806] [added: 146,043] | | | | [removed: 145,278] [added: 145,806] | | |

| Cash and cash equivalents | | $ | [removed: 501,482] [added: 734,846] | | | $ | [removed: 664,479] [added: 501,482] | | | $ | [removed: 698,649] [added: 664,479] | | | $ | [removed: 590,179] [added: 698,649] | | | $ | [removed: 409,437] [added: 590,179] | |

| Total assets | | [removed: 1,314,077] [added: 1,657,541] | | | | [removed: 1,296,213] [added: 1,314,077] | | | | [removed: 1,252,388] [added: 1,296,213] | | | | [removed: 1,052,678] [added: 1,252,388] | | | | [removed: 736,034] [added: 1,052,678] | | |

| Total stockholders' equity | | [removed: 1,027,482] [added: 1,359,973] | | | | [removed: 1,089,568] [added: 1,027,482] | | | | [removed: 1,096,682] [added: 1,089,568] | | | | [removed: 887,299] [added: 1,096,682] | | | | [removed: 606,181] [added: 887,299] | | |

| | | January 29, 2017 | | | | January 31, 2016 | | | | February 1, 2015 | | | | February 2, 2014 | | | | February 3, 2013 | | |

| Non-controlling interest | | — | | | | — | | | | — | | | | — | | | | 4,805 | | |

[removed: | Consolidated Financial Statements: | |][added: INDEX FOR NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS]

| [Report of Independent Registered Public Accounting [removed: Firm](#sC9756DD79C26CF6C90C1EB32017C24BE)] [added: Firm](#s8835A3A8E692588B1069185152F2340B)] | [removed: [37](#sC9756DD79C26CF6C90C1EB32017C24BE)] [added: [37](#s8835A3A8E692588B1069185152F2340B)] |

| [Consolidated Balance [removed: Sheets](#s5ADC22979CD8A4C9C3F2EB31E91ACB5D)] [added: Sheets](#sB61725BED88397A47CAC185144BF7615)] | [removed: [38](#s5ADC22979CD8A4C9C3F2EB31E91ACB5D)] [added: [38](#sB61725BED88397A47CAC185144BF7615)] |

| [Consolidated Statements of Operations and Comprehensive [removed: Income](#s5B29DB77DB57E2CA9F2AEB31E9485CC7)] [added: Income](#s3519C18B2EFF97665F14185144CCE535)] | [removed: [39](#s5B29DB77DB57E2CA9F2AEB31E9485CC7)] [added: [39](#s3519C18B2EFF97665F14185144CCE535)] |

| [Consolidated Statements of Stockholders' [removed: Equity](#s2CE3B44C2D3614C4AC21EB31E968189E)] [added: Equity](#s73483B264593A21B34A1185144E951D2)] | [removed: [40](#s2CE3B44C2D3614C4AC21EB31E968189E)] [added: [40](#s73483B264593A21B34A1185144E951D2)] |

| [Consolidated Statements of Cash [removed: Flows](#s326D288A5F7AC188E6EDEB31EA32AF5F)] [added: Flows](#s303D1BA239BF8A2913BA185144067313)] | [removed: [42](#s326D288A5F7AC188E6EDEB31EA32AF5F)] [added: [42](#s303D1BA239BF8A2913BA185144067313)] |

| [removed: [Notes] [added: [Index for Notes] to the Consolidated Financial [removed: Statements](#s9687DA9CA3C35DE0E577EB32035F7EE5)] [added: Statements](#sb1a9ebeb36cc42dda1ec35b6dce5f477)] | [removed: [43](#s9687DA9CA3C35DE0E577EB32035F7EE5)] [added: [43](#sb1a9ebeb36cc42dda1ec35b6dce5f477)] |

We have audited the accompanying consolidated balance sheets of lululemon athletica inc. and its subsidiaries as of January [added: 29, 2017 and January] 31, 2016 and [removed: February 1, 2015 and] the related consolidated statements of operations and comprehensive income, stockholders' equity and cash flows for the [removed: 52 week] [added: 52-week] periods ended January [added: 29, 2017, January] 31, [removed: 2016, February 1, 2015] [added: 2016] and February [removed: 2, 2014.][added: 1, 2015.]

In addition, we have audited the financial statement schedule listed in the [added: accompanying] index appearing under Item 15(a)(2).

We also have audited lululemon athletica inc. and its subsidiaries' internal control over financial reporting as of January [removed: 31, 2016,] [added: 29, 2017,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission [removed: ("COSO").][added: (COSO).]

Management is responsible for these consolidated financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in [added: the accompanying] Management's Annual Report on Internal Control over Financial Reporting appearing under Item 9A.

Our responsibility is to express [removed: opinions] [added: an opinion] on these consolidated financial statements, [removed: on] the financial statement [removed: schedule,] [added: schedule] and [removed: on] the company's internal control over financial reporting based on our integrated audits.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements [added: and the financial statement schedule] are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of lululemon athletica inc. and its subsidiaries as of January [added: 29, 2017 and January] 31, 2016 and [removed: February 1, 2015 and] the results of their operations and their cash flows for the [removed: 52 week] [added: 52-week] periods ended January [added: 29, 2017, January] 31, 2016, [removed: February 1, 2015,] and February [removed: 2, 2014,] [added: 1, 2015] in conformity with accounting principles generally accepted in the United States of America.

Also, in our opinion, lululemon athletica inc. and its subsidiaries maintained, in all material respects, effective internal control over financial reporting as of January [removed: 31, 2016,] [added: 29, 2017,] based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

| | | January [added: 29, 2017 | | | | January] 31, 2016 | | | | February 1, 2015 | | |

| Cash and cash [removed: equivalents] [added: equivalents, beginning of period] | | $ | 501,482 | | | $ | 664,479 | | [added: | $ | 698,649 | |]

| Accounts receivable | | [removed: 13,108] [added: 9,200] | | | | [removed: 13,746] [added: 13,108] | | |

| Inventories | | [removed: 284,009] [added: 298,432] | | | | [removed: 208,116] [added: 284,009] | | |

| Prepaid and receivable income taxes | | [removed: 91,453] [added: 81,190] | | | | [removed: 40,547] [added: 91,453] | | |

| Other prepaid expenses and other current assets | | [removed: 26,987] [added: 39,069] | | | | [removed: 24,124] [added: 26,987] | | |

| Property and equipment, net | | [removed: 349,605] [added: 423,499] | | | | [removed: 296,008] [added: 349,605] | | |

| Goodwill and intangible assets, net | | [removed: 24,777] [added: 24,557] | | | | [removed: 26,163] [added: 24,777] | | |

| Deferred income tax assets | | [removed: 11,802] [added: 26,256] | | | | [removed: 16,018] [added: 11,802] | | |

| Other non-current assets | | [removed: 10,854] [added: 20,492] | | | | [removed: 7,012] [added: 10,854] | | |

| Accounts payable | | $ | [removed: 10,381] [added: 24,846] | | | $ | [removed: 9,339] [added: 10,381] | |

| Accrued inventory liabilities | | [removed: 25,451] [added: 8,601] | | | | [removed: 22,296] [added: 25,451] | | |

| Accrued compensation and related expenses | | [removed: 43,524] [added: 55,238] | | | | [removed: 29,932] [added: 43,524] | | |

| Income taxes payable | | [removed: 37,736] [added: 30,290] | | | | [removed: 20,073] [added: 37,736] | | |

| Unredeemed gift card liability | | [removed: 57,736] [added: 70,454] | | | | [removed: 46,252] [added: 57,736] | | |

| Other accrued liabilities | | [removed: 50,676] [added: 52,020] | | | | [removed: 31,989] [added: 50,676] | | |

| Deferred income tax liabilities | | [removed: 10,759] [added: 7,262] | | | | [removed: 3,633] [added: 10,759] | | |

| Other non-current liabilities | | [removed: 50,332] [added: 48,857] | | | | [removed: 43,131] [added: 50,332] | | |

| Exchangeable stock, no par value: 60,000 shares authorized; [removed: 9,804] [added: 9,781] and [removed: 9,833] [added: 9,804] issued and outstanding | | — | | | | — | | |

| Special voting stock, $0.000005 par value: 60,000 shares authorized; [removed: 9,804] [added: 9,781] and [removed: 9,833] [added: 9,804] issued and outstanding | | — | | | | — | | |

| Common stock, $0.005 par value: 400,000 shares authorized; [removed: 127,482] [added: 127,304] and [removed: 132,112] [added: 127,482] issued and outstanding | | 637 | | | | [removed: 661] [added: 637] | | |

| Additional paid-in capital | | [removed: 245,533] [added: 266,622] | | | | [removed: 241,695] [added: 245,533] | | |

| Retained earnings | | [removed: 1,019,515] [added: 1,294,214] | | | | [removed: 1,020,619] [added: 1,019,515] | | |

| Accumulated other comprehensive loss | | [removed: (238,203] [added: (201,500] | | ) | | [removed: (173,407] [added: (238,203] | | ) |

| | | January [removed: 31, 2016] [added: 29, 2017] | | | | [removed: February 1, 2015] [added: January 31, 2016] | | | | February [removed: 2, 2014] [added: 1, 2015] | | |

| March 28, 2017 |

| | | January 29, 2017 | | | | January 31, 2016 | | |

| Cash and cash equivalents | | $ | 734,846 | | | $ | 501,482 | |

| | | 1,162,737 | | | | 917,039 | | |

| | | $ | 1,657,541 | | | $ | 1,314,077 | |

| | | 241,449 | | | | 225,504 | | |

| | | 297,568 | | | | 286,595 | | |

| | | 1,359,973 | | | | 1,027,482 | | |

| | | $ | 1,657,541 | | | $ | 1,314,077 | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net income | | | | | | | | | | | | | | | | | | | | | | | 303,381 | | | | | | | | 303,381 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | Exchangeable Stock | | | Special Voting Stock | | | | | | | Common Stock | | | | | | | Additional Paid-in Capital | | | | Retained Earnings | | | | Accumulated Other Comprehensive Income (Loss) | | | | Total | | |

| | | Shares | | | Shares | | | Par Value | | | | Shares | | | Par Value | | | | | | | | | | | | | | | | | | |

| Repurchase of common stock | | | | | | | | | | | | (455 | ) | | (2 | | ) | | (643 | | ) | | (28,682 | | ) | | | | | | (29,327 | | ) |

| Balance at January 29, 2017 | | 9,781 | | | 9,781 | | | $ | — | | | 127,304 | | | $ | 637 | | | $ | 266,622 | | | $ | 1,294,214 | | | $ | (201,500 | ) | | $ | 1,359,973 | |

| Net income | | $ | 303,381 | | | $ | 266,047 | | | $ | 239,033 | |

| Deferred debt financing costs | | (923 | | ) | | — | | | | — | | |

| | | |

| --- | --- | --- |

| | | |

| Note 1 | [Nature of Operations and Basis of Presentation](#s021332D9F4706D674082185143DF5FC1) | [44](#s021332D9F4706D674082185143DF5FC1) |

| Note 2 | [Summary of Significant Accounting Policies](#sC9137B88A2E9871282D8185143438D9B) | [44](#sC9137B88A2E9871282D8185143438D9B) |

| Note 3 | [Inventories](#s5F2E67F16671F2550ECE18514395D5EB) | [49](#s5F2E67F16671F2550ECE18514395D5EB) |

| Note 5 | [Goodwill and Intangible Assets](#s87DC2AFD63372DB30747185143CF3A13) | [50](#s87DC2AFD63372DB30747185143CF3A13) |

| Note 6 | [Other Accrued Liabilities](#s3F0B7B0915A20D9DCD3918514428B92B) | [50](#s3F0B7B0915A20D9DCD3918514428B92B) |

| Note 7 | [Other Non-Current Liabilities](#s8B2EBC584F009720B33F185144C85A3C) | [51](#s8B2EBC584F009720B33F185144C85A3C) |

| Note 8 | [Long-Term Debt and Credit Facilities](#s620DD2E7BED5A4419B751851449823F0) | [51](#s620DD2E7BED5A4419B751851449823F0) |

| Note 9 | [Stockholders' Equity](#sE81BB2EF77C445A1D9A61851449D20A5) | [51](#sE81BB2EF77C445A1D9A61851449D20A5) |

| Note 10 | [Stock-Based Compensation and Benefit Plans](#s4829642D24E987371DF81851438BFE32) | [52](#s4829642D24E987371DF81851438BFE32) |

| Note 11 | [Earnings Per Share](#s397072453B92CB02D0B5185144A7A9B7) | [55](#s397072453B92CB02D0B5185144A7A9B7) |

| Note 12 | [Commitments and Contingencies](#s6D962D9121D7E873C3561851433BEC42) | [55](#s6D962D9121D7E873C3561851433BEC42) |

| Note 13 | [Related Party Balances and Transactions](#s1FAEC81E2BBC3EAE98F6185144202877) | [57](#s1FAEC81E2BBC3EAE98F6185144202877) |

| Note 14 | [Supplemental Cash Flow Information](#sCB236898D113CFEB85691851447384F7) | [57](#sCB236898D113CFEB85691851447384F7) |

| Note 15 | [Income Taxes](#s4DE931ABD241DE50A8601851435115AD) | [57](#s4DE931ABD241DE50A8601851435115AD) |

| Note 16 | [Segmented Financial Information](#sDBABCE09ACC23A1436B318514364DC15) | [61](#sDBABCE09ACC23A1436B318514364DC15) |

| | |

| March 29, 2016 |

| | | 917,039 | | | | 951,012 | | |

| | | $ | 1,314,077 | | | $ | 1,296,213 | |

| | | 225,504 | | | | 159,881 | | |

| | | 286,595 | | | | 206,645 | | |

| | | 1,027,482 | | | | 1,089,568 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance at February 3, 2013 | | 32,065 | | | | | 32,065 | | | $ | — | | | 112,371 | | | $ | 562 | | | $ | 221,372 | | | $ | 644,275 | | | $ | 21,090 | | | $ | 887,299 | |

| Net income | | | | | | | | | | | | | | | | | | | | | | | | | 279,547 | | | | | | | | 279,547 | | |

| Cash and cash equivalents, beginning of period | | $ | 664,479 | | | $ | 698,649 | | | $ | 590,179 | |

The accompanying consolidated financial statements include the financial position, results of operations and cash flows of the Company during the three-year period ended January 31, 2016.

Certain comparative figures have been reclassified to conform to the financial presentation adopted for the current year.

| | | | |

| --- | --- | --- | --- |

Company is contractually obligated to remove in order to comply with the lease agreement.

When gift cards are redeemed for apparel, the Company recognizes the related revenue.

In July 2015, the FASB deferred the effective date for public companies to years, and interim periods within those years, beginning after December 15, 2017, with early application permitted only as of years, and interim periods within those years, beginning after December 15, 2016.

This guidance is effective for public companies for years, and interim periods within those years, beginning on or after December 15, 2015, and early application is permitted.

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

This guidance is effective for public companies for years, and interim periods within those years, beginning on or after December 15, 2016, with earlier application permitted as of the beginning of an interim or annual reporting period.

In November 2015, the FASB amended ASC Topic 740, Income Taxes ("ASC 740") to simplify the presentation of deferred income taxes.

The amendments in this update require that deferred income tax liabilities and assets be classified as noncurrent in a classified balance sheet.

The guidance is effective for public entities for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, and early application is permitted.

The Company early adopted this standard retrospectively in the fourth quarter of fiscal 2015, with no significant impact to its consolidated financial statements.

The standard is effective for public entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early application is permitted.

| | | $ | 284,009 | | | $ | 208,116 | |

| | | $ | 349,605 | | | $ | 296,008 | |

| | | 23,830 | | | | 24,413 | | |

| | | 947 | | | | 1,750 | | |

The estimated aggregate future amortization expense is as follows:

| | | | | |

| --- | --- | --- | --- | --- |

| 2016 | | $ | 629 | |

| 2017 | | 247 | | |

| 2018 | | 71 | | |

| Thereafter | | — | | |

| | | $ | 50,676 | | | $ | 31,989 | |

| Tenant inducements | | 24,609 | | | | 22,294 | | |

Based on this evaluation, management concluded that we maintained effective internal control over financial reporting as of January [removed: 31, 2016.][added: 29, 2017.]

The effectiveness of our internal control over financial reporting as of January [removed: 31, 2016] [added: 29, 2017] has been audited by PricewaterhouseCoopers LLP our independent registered public accounting firm, as stated in their report in Item 8 of Part II of this Form 10-K.

There were no changes in our internal control over financial reporting during the fourth quarter of the fiscal year ended January [removed: 31, 2016] [added: 29, 2017] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The information required by this item concerning our directors, director nominees and Section 16 beneficial ownership reporting compliance is incorporated by reference to our definitive Proxy Statement for our [removed: 2016] [added: 2017] Annual Meeting of Stockholders under the captions "Election of Directors," "Section 16(a) Beneficial Ownership Reporting Compliance," "Executive Officers" and "Corporate Governance."

Any amendments, other than technical, administrative or other non-substantive amendments, to our Code of Business Conduct and Ethics or waivers from the provisions of the Code of Business Conduct and Ethics for our principal executive officer and our principal financial and accounting officer will be [added: promptly] disclosed on our website [removed: within four business days] following the effective date of such amendment or waiver.

The information required by this item is incorporated by reference to our [removed: 2016] [added: 2017] Proxy Statement under the captions "Executive Compensation" and "Executive Compensation Tables."

The information required by this item is incorporated by reference to our [removed: 2016] [added: 2017] Proxy Statement under the caption "Principal Stockholders and Stock Ownership by Management."

Equity Compensation Plan Information (as of January [removed: 31, 2016)][added: 29, 2017)]

| (1) | This amount represents the following: (a) [removed: 867,212] [added: 918,143] shares subject to outstanding options, (b) [removed: 394,973] [added: 390,111] shares subject to outstanding performance-based restricted stock units, and (c) [removed: 333,049] [added: 360,250] shares subject to outstanding restricted stock units. The options, performance-based restricted stock units and restricted stock units are all under our 2007 Equity Incentive Plan or our 2014 Equity Incentive Plan. Restricted shares outstanding under our 2014 Equity Incentive Plan have already been reflected in our total outstanding common stock balance. |

| (3) | This includes (a) [removed: 14,690,742] [added: 14,299,075] shares of our common stock available for future issuance [removed: pursuant to] [added: under] our 2014 Equity Incentive Plan and (b) [removed: 5,163,282] [added: 5,039,806] shares of our common stock available for future issuance [removed: pursuant to] [added: under] our Employee Share Purchase Plan. The number of shares remaining available for future issuance under our 2014 Equity Incentive Plan is reduced by 1.7 shares for each award other than stock options granted and by one share for each stock option award granted. Outstanding awards that expire or are canceled without having been exercised or settled in full are available for issuance again under our 2014 Equity Incentive Plan and shares that are withheld in satisfaction of tax withholding obligations for full value awards are also again available for issuance. No further awards may be issued under the predecessor plan, our 2007 Equity Incentive Plan. |

| Equity compensation plans approved by stockholders | | 1,668,504 | | | $ | 59.20 | | | 19,338,881 | |

| Total | | 1,668,504 | | | $ | 59.20 | | | 19,338,881 | |

| Equity compensation plans approved by stockholders | | 1,595,234 | | | $ | 49.54 | | | 19,854,024 | |

| Total | | 1,595,234 | | | $ | 49.54 | | | 19,854,024 | |

The information required by this item is incorporated by reference to our [removed: 2016] [added: 2017] Proxy Statement under the captions "Certain Relationships and Related Party Transactions" and "Corporate Governance."

The information required by this item is incorporated by reference to our [removed: 2016] [added: 2017] Proxy Statement under the caption "Fees for Professional Services."

| For the year ended February [removed: 2, 2014] [added: 1, 2015] | | $ | [removed: (1,000] [added: (91] | ) | | $ | [removed: (3,462] [added: —] | [removed: )] | | $ | [removed: 3,364] [added: —] | | | $ | [removed: (1,098] [added: (91] | ) |

| For the year ended February 1, 2015 | | [removed: (1,098] [added: $] | [added: (1,098] | ) | | [removed: (3,564] [added: $] | [added: (3,564] | ) | | [added: $ |] 3,338 | | | [added: $] | (1,324 | [removed: |] ) |

| [removed: Slow Moving and] Obsolescence [added: and Quality] Provision on Finished Goods and Raw Materials | | | | | | | | | | | | | | | | |

| For the year ended February [removed: 2, 2014] [added: 1, 2015] | | $ | [removed: (5,250] [added: (5,493] | ) | | $ | [removed: (22,449] [added: (2,566] | ) | | $ | [removed: 22,206] [added: 4,454] | | | $ | [removed: (5,493] [added: (3,605] | ) |

| For the year ended February 1, 2015 | | [removed: (5,493] [added: $] | [added: 1,655] | [removed: )] | | [removed: (2,566] [added: $] | [added: 672] | [removed: )] | | [removed: 4,454] [added: $] | [added: —] | | | [removed: (3,605] [added: $] | [added: 2,327] | [removed: )] |

| For the year ended February [removed: 2, 2014] [added: 1, 2015] | | $ | [removed: (519] [added: (911] | ) | | $ | [removed: (6,327] [added: (8,064] | ) | | $ | [removed: 5,935] [added: 7,907] | | | $ | [removed: (911] [added: (1,068] | ) |

| For the year ended [removed: February 2, 2014 |] [added: January 29, 2017] | [removed: $] | (91 | [removed: )] | [added: )] | [removed: $] | — | | | [removed: $] | — | | | [removed: $] | (91 | [added: |] ) |

| 10.3* | | Form of Non-Qualified Stock Option Agreement (with clawback provision) | | | | [removed: 8-K] [added: 10-Q] | | [removed: 10.2] [added: 10.1] | | 001-33608 | | [removed: 12/11/2014] [added: 6/8/2016] |

| 10.4* | | Form of Notice of Grant of Performance Shares and Performance Shares Agreement (with clawback provision) | | | | 10-Q | | [removed: 10.1] [added: 10.2] | | 001-33608 | | [removed: 6/9/2015] [added: 6/8/2016] |

| 10.5* | | Form of Notice of Grant of Restricted Stock Units and Restricted Stock Units Agreement (with clawback provision) | | | | 10-Q | | [removed: 10.2] [added: 10.3] | | 001-33608 | | [removed: 6/9/2015] [added: 6/8/2016] |

| [removed: 10.6*] [added: 10.5*] | | Form of Notice of Grant of Restricted Stock Units and Restricted Stock Units Agreement [removed: (no tolling of vesting, with] [added: (with] clawback provision) | | | | [removed: 8-K] [added: 10-Q] | | [removed: 10.10] [added: 10.3] | | 001-33608 | | [removed: 12/11/2014] [added: 6/8/2016] |

| [removed: 10.7*] [added: 10.6*] | | Form of Restricted Stock Award Agreement | | | | [removed: 8-K] [added: 10-Q] | | 10.12 | | 001-33608 | | 12/11/2014 |

| [removed: 10.8*] [added: 10.7*] | | Amended and Restated LIPO Investments (USA), Inc. Option Plan and form of Award Agreement | | | | S-1 | | 10.3 | | 333-142477 | | 5/1/2007 |

| [removed: 10.9] [added: 10.8] | | Second Amended and Restated Registration Rights Agreement dated June 18, 2015 between lululemon athletica inc. and the parties named therein | | | | 10-Q | | 10.2 | | 001-33608 | | 9/10/2015 |

| [removed: 10.10] [added: 10.9] | | Exchange Trust Agreement dated July 26, 2007 between lululemon athletica inc., Lulu Canadian Holding, Inc. and Computershare Trust Company of Canada | | | | 10-Q | | 10.5 | | 001-33608 | | 9/10/2007 |

| [removed: 10.11] [added: 10.10] | | Exchangeable Share Support Agreement dated July 26, 2007 between lululemon athletica inc., Lululemon Callco ULC and Lulu Canadian Holding, Inc. | | | | 10-Q | | 10.6 | | 001-33608 | | 9/10/2007 |

| [removed: 10.12] [added: 10.11] | | Amended and Restated Declaration of Trust for Forfeitable Exchangeable Shares dated July 26, 2007, by and among the parties named therein | | | | 10-Q | | 10.7 | | 001-33608 | | 9/10/2007 |

| [removed: 10.13] [added: 10.12] | | Amended and Restated Arrangement Agreement dated as of June 18, 2007, by and among the parties named therein (including Plan of Arrangement and Exchangeable Share Provisions) | | | | S-1/A | | 10.14 | | 333-142477 | | 7/9/2007 |

| [removed: 10.14] [added: 10.13] | | Form of Indemnification Agreement between lululemon athletica inc. and its directors and certain officers | | | | S-1/A | | 10.16 | | 333-142477 | | 7/9/2007 |

| [removed: 10.15] [added: 10.14] | | Purchase and Sale Agreement between 2725312 Canada Inc and lululemon athletica inc., dated December 22, 2010 | | | | 10-K | | 10.12 | | 001-33608 | | 3/17/2011 |

| [removed: 10.16*] [added: 10.15*] | | Outside Director Compensation Plan | | [added: X] | | [removed: 10-K] | | [removed: 10.24] | | [removed: 001-33608] | | [removed: 3/26/2015] |

| [removed: 10.17*] [added: 10.16*] | | lululemon athletica inc. Employee Share Purchase Plan | | | | 10-Q | | 10.3 | | 001-33608 | | 11/29/2007 |

| [removed: 10.18*] [added: 10.17*] | | Executive Employment Agreement, [removed: dated] effective as of December 1, [removed: 2013] [added: 2013,] between lululemon athletica inc. and Laurent Potdevin | | | | 8-K | | 10.1 | | 001-33608 | | 12/11/2013 |

| [removed: 10.19*] [added: 10.18*] | | Executive Employment [removed: Agreement with Stuart C. Haselden, dated] [added: Agreement,] effective as of January 2, [removed: 2015] [added: 2015, between lululemon athletica inc. and Stuart C. Haselden] | | | | 8-K | | 10.1 | | 001-33608 | | 1/7/2015 |

| [removed: 10.20*] [added: 10.19*] | | Executive Employment Agreement, effective as of November 24, [removed: 2014] [added: 2014,] between lululemon athletica inc. and Scott (Duke) Stump | | | | 10-Q | | 10.13 | | 001-33608 | | 12/11/2014 |

| [removed: 10.21*] [added: 10.20*] | | Executive Employment Agreement, effective as of June 4, [removed: 2015] [added: 2015,] between lululemon athletica inc. and Miguel Almeida | | | | 10-Q | | 10.1 | | 001-33608 | | 9/10/2015 |

| [removed: 10.22*] [added: 10.21*] | | Executive Employment Agreement, effective as of October 26, [removed: 2015] [added: 2015,] between lululemon athletica inc. and Lee Holman | | [removed: X] | | [added: 10-K] | | [added: 10.22] | | [added: 001-33608] | | [added: 3/30/2016] |

| [removed: 10.23*] [added: 10.22*] | | Executive Employment Agreement, effective as of November 5, [removed: 2015] [added: 2015,] between lululemon athletica inc. and Gina Warren | | | | 10-Q | | 10.1 | | 001-33608 | | 12/9/2015 |

| 101 | | The following financial statements from the Company's 10-K for the fiscal year ended January [removed: 31, 2016,] [added: 29, 2017,] formatted in XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income, (iii) Consolidated Statements of Stockholders' Equity, (iv) Consolidated Statements of Cash Flows (v) Notes to the Consolidated Financial Statements | | X | | | | | | | | |

| * | [added: |] Denotes a compensatory plan, contract or arrangement, in which our directors or executive officers may participate. | [added: | | | | | | | | | |]

| | [added: |] Furnished herewith. | [added: | | | | | | | | | |]

| /s/ LAURENT POTDEVIN | | Director and Chief Executive Officer | | March [removed: 29, 2016] [added: 28, 2017] |

| /s/ STUART C. HASELDEN | | Chief Financial Officer (Principal | | March [removed: 29, 2016] [added: 28, 2017] |

| /s/ MICHAEL CASEY | | Director, Co-Chairman of the Board | | March [removed: 29, 2016] [added: 28, 2017] |

| /s/ DAVID M. MUSSAFER | | Director, Co-Chairman of the Board | | March [removed: 29, 2016] [added: 28, 2017] |

| /s/ ROBERT BENSOUSSAN | | Director | | March [removed: 29, 2016] [added: 28, 2017] |

| /s/ STEVEN J. COLLINS | | Director | | March [removed: 29, 2016] [added: 28, 2017] |

| /s/ KATHRYN HENRY | | Director | | March [removed: 29, 2016] [added: 28, 2017] |

| /s/ MARTHA A.M. MORFITT | | Director | | March [removed: 29, 2016] [added: 28, 2017] |

| /s/ EMILY WHITE | | Director | | March [removed: 29, 2016] [added: 28, 2017] |

| For the year ended January 29, 2017 | | (427 | | ) | | (5,168 | | ) | | 5,260 | | | | (335 | | ) |

| For the year ended January 29, 2017 | | (5,156 | | ) | | (3,200 | | ) | | 3,343 | | | | (5,013 | | ) |

| For the year ended January 29, 2017 | | (1,199 | | ) | | (13,915 | | ) | | 12,806 | | | | (2,308 | | ) |

| For the year ended January 29, 2017 | | 4,459 | | | | 269 | | | | — | | | | 4,728 | | |

| 10.23* | | Executive Employment Agreement, effective as of December 5, 2016, between lululemon athletica canada inc. and Celeste Burgoyne | | X | | | | | | | | |

| 10.24 | | Credit Agreement, dated as of December 15, 2016, among lululemon athletica inc., lululemon athletica canada inc., Lulu Canadian Holding, Inc. and lululemon usa inc., as borrowers, Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer, HSBC Bank Canada, as syndication agent and letter of credit issuer, and each other lender party thereto. | | | | 8-K | | 10.1 | | 001-33608 | | 12/21/2016 |

| | Date: | | March 28, 2017 |

| /s/ JON MCNEILL | | Director | | March 28, 2017 |

| Jon McNeill | | | | |

| 10.3* | | Form of Non-Qualified Stock Option Agreement (with clawback provision) | | | | 10-Q | | 10.1 | | 001-33608 | | 6/8/2016 |

| 10.4* | | Form of Notice of Grant of Performance Shares and Performance Shares Agreement (with clawback provision) | | | | 10-Q | | 10.2 | | 001-33608 | | 6/8/2016 |

| 10.6* | | Form of Restricted Stock Award Agreement | | | | 10-Q | | 10.12 | | 001-33608 | | 12/11/2014 |

| 10.7* | | Amended and Restated LIPO Investments (USA), Inc. Option Plan and form of Award Agreement | | | | S-1 | | 10.3 | | 333-142477 | | 5/1/2007 |

| 10.8 | | Second Amended and Restated Registration Rights Agreement dated June 18, 2015 between lululemon athletica inc. and the parties named therein | | | | 10-Q | | 10.2 | | 001-33608 | | 9/10/2015 |

| 10.9 | | Exchange Trust Agreement dated July 26, 2007 between lululemon athletica inc., Lulu Canadian Holding, Inc. and Computershare Trust Company of Canada | | | | 10-Q | | 10.5 | | 001-33608 | | 9/10/2007 |

| 10.10 | | Exchangeable Share Support Agreement dated July 26, 2007 between lululemon athletica inc., Lululemon Callco ULC and Lulu Canadian Holding, Inc. | | | | 10-Q | | 10.6 | | 001-33608 | | 9/10/2007 |

| 10.11 | | Amended and Restated Declaration of Trust for Forfeitable Exchangeable Shares dated July 26, 2007, by and among the parties named therein | | | | 10-Q | | 10.7 | | 001-33608 | | 9/10/2007 |

| 10.12 | | Amended and Restated Arrangement Agreement dated as of June 18, 2007, by and among the parties named therein (including Plan of Arrangement and Exchangeable Share Provisions) | | | | S-1/A | | 10.14 | | 333-142477 | | 7/9/2007 |

| 10.13 | | Form of Indemnification Agreement between lululemon athletica inc. and its directors and certain officers | | | | S-1/A | | 10.16 | | 333-142477 | | 7/9/2007 |

| 10.14 | | Purchase and Sale Agreement between 2725312 Canada Inc and lululemon athletica inc., dated December 22, 2010 | | | | 10-K | | 10.12 | | 001-33608 | | 3/17/2011 |

| 10.15* | | Outside Director Compensation Plan | | X | | | | | | | | |

| 10.16* | | lululemon athletica inc. Employee Share Purchase Plan | | | | 10-Q | | 10.3 | | 001-33608 | | 11/29/2007 |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | Incorporated by Reference | | | | | | |

| Exhibit No. | | Exhibit Title | | Filed Herewith | | Form | | Exhibit No. | | File No. | | Filing Date |

| 10.17* | | Executive Employment Agreement, effective as of December 1, 2013, between lululemon athletica inc. and Laurent Potdevin | | | | 8-K | | 10.1 | | 001-33608 | | 12/11/2013 |

| 10.18* | | Executive Employment Agreement, effective as of January 2, 2015, between lululemon athletica inc. and Stuart C. Haselden | | | | 8-K | | 10.1 | | 001-33608 | | 1/7/2015 |

| 10.19* | | Executive Employment Agreement, effective as of November 24, 2014, between lululemon athletica inc. and Scott (Duke) Stump | | | | 10-Q | | 10.13 | | 001-33608 | | 12/11/2014 |

| 10.20* | | Executive Employment Agreement, effective as of June 4, 2015, between lululemon athletica inc. and Miguel Almeida | | | | 10-Q | | 10.1 | | 001-33608 | | 9/10/2015 |

| 10.21* | | Executive Employment Agreement, effective as of October 26, 2015, between lululemon athletica inc. and Lee Holman | | | | 10-K | | 10.22 | | 001-33608 | | 3/30/2016 |

| 10.22* | | Executive Employment Agreement, effective as of November 5, 2015, between lululemon athletica inc. and Gina Warren | | | | 10-Q | | 10.1 | | 001-33608 | | 12/9/2015 |

| 10.23* | | Executive Employment Agreement, effective as of December 5, 2016, between lululemon athletica canada inc. and Celeste Burgoyne | | X | | | | | | | | |

| 10.24 | | Credit Agreement, dated as of December 15, 2016, among lululemon athletica inc., lululemon athletica canada inc., Lulu Canadian Holding, Inc. and lululemon usa inc., as borrowers, Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer, HSBC Bank Canada, as syndication agent and letter of credit issuer, and each other lender party thereto. | | | | 8-K | | 10.1 | | 001-33608 | | 12/21/2016 |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| For the year ended February 1, 2015 | | (911 | | ) | | (8,064 | | ) | | 7,907 | | | | (1,068 | | ) |

| For the year ended February 2, 2014 | | $ | 1,828 | | | $ | (173 | ) | | $ | — | | | $ | 1,655 | |

| For the year ended February 1, 2015 | | 1,655 | | | | 672 | | | | — | | | | 2,327 | | |

| For the year ended February 1, 2015 | | (91 | | ) | | — | | | | — | | | | (91 | | ) |

| | |

| --- | --- |

| | | | | |

| /s/ ROANN COSTIN | | Director | | March 29, 2016 |

| RoAnn Costin | | | | |

| /s/ WILLIAM H. GLENN | | Director | | March 29, 2016 |

| William H. Glenn | | | | |

| /s/ RHODA M. PITCHER | | Director | | March 29, 2016 |

| Rhoda M. Pitcher | | | | |