lululemon athletica (LULU) 10-K risk factor changes: FY2018 vs FY2017

We have occasionally received, and may in the future [removed: continue to] receive, shipments of products that fail to comply with our technical specifications or that fail to conform to our quality control standards.

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

Additionally, if the unacceptability of our products is not discovered until after such products are purchased by our guests, our guests could lose confidence in [removed: 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.

Because of the fragmented nature of the industry, we also compete with other apparel sellers, including those [removed: specializing in yoga apparel and other activewear.]

In fiscal [removed: 2016,] [added: 2017,] approximately [removed: 63%] [added: 59%] of our [removed: products] [added: fabrics] were produced by our top five [removed: manufacturing] [added: fabric] suppliers, and [removed: 40%] [added: no single manufacturer produced more than 35%] of raw materials [removed: were produced by a single manufacturer.][added: used.]

We have experienced, and may in the future [removed: continue to] experience, a significant disruption in the supply of fabrics or raw materials from current sources and we may be unable to locate alternative materials suppliers of comparable quality at an acceptable price, or at all.

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

[removed: These factors may cause us to experience increased costs, reduce] our prices to consumers or experience reduced sales in response to increased prices, any of which could cause our operating margin to decline if we are unable to offset these factors with reductions in operating costs and could have a material adverse effect on our financial conditions, operating results and cash flows.

If we fail to accurately forecast guest [removed: demand] [added: demand,] we may experience excess inventory levels or a shortage of products available for sale in our stores or for delivery to guests.

Any material disruption of our information [added: technology] systems [added: or unexpected network interruption] could disrupt our business and reduce our sales.

We are increasingly dependent on information [added: technology] systems [added: and third-parties] to operate our e-commerce websites, process transactions, respond to guest inquiries, manage inventory, purchase, sell and ship goods on a timely basis, and maintain cost-efficient operations.

[removed: 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 could, especially if the disruption or slowdown occurred during the holiday 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.

[removed: If] [added: In addition, if] changes in technology cause our information systems to become obsolete, or if our information systems are inadequate to handle our growth, we could lose guests.

Our limited operating experience and limited brand recognition in new international markets may limit our expansion [removed: strategy] and cause our business and growth to suffer.

Our failure to develop our business in new international markets or [removed: experiencing] disappointing growth outside of existing markets could harm our business and results of operations.

Our distribution facilities include computer controlled and automated equipment, which means their operations [removed: are complicated and] may be subject to a number of risks related to security or computer viruses, the proper operation of software and hardware, electronic or power interruptions, or other system failures.

Our effective income tax rates could be unfavorably impacted by a number of factors, including changes in the mix of earnings 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 repatriation of unremitted earnings for which we have not previously accrued [added: applicable] U.S. [added: income taxes and foreign withholding] taxes.

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: $2.3] [added: $2.6] billion in fiscal [removed: 2016.][added: 2017.]

Our leases generally have initial terms of between five and ten years, and generally can be extended [removed: only] in five-year increments if at all.

[added: 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.

[removed: Factors that could negatively affect our business include a potential significant revaluation] of [removed: the currencies used in these countries, which may result in an increase in the cost of] producing products, labor shortage and increases in labor costs, and difficulties in moving products manufactured out of the countries in which they are manufactured and through the ports on the western coast of North America, whether due to port congestion, labor disputes, product regulations and/or inspections or other factors, and natural disasters or health pandemics.

We are [removed: also] dependent on international trade agreements and regulations.

Our future success is substantially dependent on the continued service of our senior [removed: management.][added: management and identifying and attracting our next Chief Executive Officer.]

In [removed: the last several years, several] [added: addition to this change, a number of] members of our senior management team have left [removed: us and we have focused time and resources on recruiting] the [removed: new members of our current management team.][added: Company in the last several years.]

[removed: The continued turnover of senior management and] [added: These changes, or] the loss of [added: services of any of our other] key [added: executive officers or other] members of our [removed: executive team] [added: senior management team, or any negative public perception with respect to these individuals, may be disruptive to, or cause uncertainty in, our business and] could have a negative impact on our ability to manage and grow our business effectively.

During fiscal [removed: 2016,] [added: 2017,] approximately [removed: 47%] [added: 53%] of our products were [removed: produced] [added: manufactured] in South East Asia, approximately [removed: 28%] [added: 25%] in South Asia, approximately [removed: 15%] [added: 10%] in China, approximately [removed: 1%] [added: 8%] in [removed: North America,] [added: the Americas,] and the remainder in other regions.

We believe that our trademarks and other proprietary rights have significant value and are important to identifying and differentiating our products from those of our competitors and creating [removed: and sustaining demand for our products.]

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

specializing in yoga apparel and other activewear.

We work with a group of approximately 65 suppliers to provide the fabrics for our products.

We work with a group of approximately 47 vendors that manufacture our products, five of which produced approximately 64% of our products in fiscal 2017.

During fiscal 2017, no single manufacturer produced more than 25% of our product offerings.

These factors may cause us to experience increased costs, reduce

The failure of our information technology systems to operate properly or effectively, problems with transitioning to upgraded or replacement systems, or difficulty in integrating new systems, could adversely affect our business.

In addition, we have e-commerce websites in the United States, Canada, and internationally.

Our information technology systems, websites, and operations of third parties on whom we rely, may encounter damage or disruption or slowdown caused by a failure to successfully upgrade systems, system failures, viruses, computer "hackers" or

We have limited back-up systems and redundancies, and our information technology systems and websites have experienced system failures and electrical outages in the past which have disrupted our operations.

Any significant disruption in our information technology systems or websites could harm our reputation and credibility, and could have a material adverse effect on our business, financial condition and results of operations.

If the technology-based systems that give our customers the ability to shop with us online do not function effectively, our operating results, as well as our ability to grow our e-commerce business globally, could be materially adversely affected.

Many of our customers shop with us through our e-commerce websites and mobile apps.

Increasingly, customers are using tablets and smart phones to shop online with us and with our competitors and to do comparison shopping.

We are increasingly using social media and proprietary mobile apps to interact with our customers and as a means to enhance their shopping experience.

Any failure on our part to provide attractive, effective, reliable, user-friendly e-commerce platforms that offer a wide assortment of merchandise with rapid delivery options and that continually meet the changing expectations of online shoppers could place us at a competitive disadvantage, result in the loss of e-commerce and other sales, harm our reputation with customers, have a material adverse impact on the growth of our e-commerce business globally and could have a material adverse impact on our business and results of operations.

Risks specific to our e-commerce business also include diversion of sales from our company-operated stores, difficulty in recreating the in-store experience through direct channels and liability for online content.

Our failure to successfully respond to these risks might adversely affect sales in our e-commerce business, as well as damage our reputation and brands.

On February 2, 2018, our Chief Executive Officer resigned.

Such disruption could have a material adverse impact on our financial performance, financial condition, and the market price of our stock.

We may not be successful in identifying and attracting a highly qualified successor to our Chief Executive Officer, and our process to search for the successor may be time-consuming and divert management's attention and resources away from our business.

The search for our next Chief Executive Officer may have a negative impact on our senior management team, business, and financial performance and condition.

Changes in applicable U.S., Canadian, or other or foreign tax laws and regulations, or their interpretation and application, including the possibility of retroactive effect, could affect our income tax expense and profitability, as they have in fiscal 2017 upon passage of the U.S. Tax Cuts and Jobs Act.

We have recorded provisional amounts in fiscal 2017 in relation to the U.S. Tax Cuts and Jobs Act.

We may make adjustments to the provisional amounts as additional information is collected and analyzed, and as we complete our assessment of the impact that the U.S. Tax Cuts and Jobs Act has, if any, upon our reinvestment plans for the accumulated earnings of the Company's foreign subsidiaries.

As the Company completes its analysis of the U.S. Tax Cuts and Jobs Act it may also make adjustments to incorporate any additional interpretations or guidance that may be issued.

The Company may also identify additional effects of the U.S. Tax Cuts and Jobs Act that are not reflected as of January 28, 2018.

Any such adjustments may materially impact the provision for income taxes and our effective income tax rate in the period in which the adjustments are made, and in future periods.

Factors that could negatively affect our business include a potential significant revaluation of the currencies used in these countries, which may result in an increase in the cost

We have, and may continue to, enter into forward currency contracts, or other derivative instruments, in an effort to mitigate the foreign exchange risks which we are exposed to.

This may include entering into forward currency contracts to hedge against the foreign exchange gains and losses which arise on translation of our foreign subsidiaries' balance sheets into U.S. dollars, or entering into forward currency contracts in an effort to reduce our exposure to foreign exchange revaluation gains and losses that arise on monetary assets and liabilities held by our subsidiaries in a currency other than their functional currency.

Although we use financial instruments to hedge certain foreign currency risks, these measures may not succeed in fully offsetting the negative impact of foreign currency rate movements.

We are exposed to credit-related losses in the event of nonperformance by the counterparties to the forward currency contracts.

and sustaining demand for our products.

In addition, our technical athletic apparel is sold at a price premium to traditional athletic apparel.

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.

There have been proposals to reform U.S. and foreign tax laws that could significantly impact how U.S. multinational corporations are taxed on foreign earnings.

Although we cannot predict whether or in what form such proposals will pass, several of the proposals considered, if enacted into law, could have an adverse impact on our income tax expense and cash flows.

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.

Our future success is substantially dependent on the continued service of our senior management and other key employees.

In addition, if we're not effective with our succession planning, it may have a negative impact on our ability to fill senior management roles in a timely manner.

We currently generate a significant portion of our net revenue and incur a significant portion of our expenses in Canada.

We also hold a significant portion of our net assets in Canada.

The reporting currency for our consolidated financial statements is the U.S. dollar.

A weakening of the U.S. dollar against the Canadian dollar results in:

| • | 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; |

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

| • | foreign exchange revaluation losses by our Canadian subsidiaries on U.S. dollar cash and receivables denominated in U.S. dollars. |

During fiscal 2016, the change in the relative value of the U.S. dollar against the Canadian dollar resulted in a $41.7 million reduction in accumulated other comprehensive loss within stockholders' equity.

During fiscal 2015, the change in the relative value of the U.S. dollar against the Canadian dollar resulted in a $63.2 million increase 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 2015 would have resulted in additional income from operations of approximately $0.2 million in fiscal 2016.

This assumes a consistent 10% appreciation in the U.S. dollar against the Canadian dollar throughout the fiscal year.

The timing of changes in the relative value of the U.S. dollar combined with the seasonal nature of our business, can affect the magnitude of the impact that fluctuations in foreign exchange rates have on our income from operations.

We have not historically hedged foreign currency fluctuations.

However, in the future, in an effort to mitigate these risks, we may at times enter into derivative financial instruments, although we have not historically done so.

We do not, and do not intend to, engage in the practice of trading derivative securities for profit.

Our

Fiscal [removed: 2016,] [added: 2017,] fiscal [removed: 2015,] [added: 2016,] and fiscal [removed: 2014] [added: 2015] were 52 week years.

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

[removed: | • | Direct to consumer] [added: The increase in] net revenue [removed: increased 13% in fiscal 2016 compared] [added: from our direct] to [removed: fiscal 2015, or by 13% on a constant dollar basis,] [added: consumer segment was] primarily [removed: as a] [added: the] result of increased traffic on our e-commerce websites, [added: improved conversion rates, and] increased dollar value per [removed: transaction, and improved conversion rates. |][added: transaction.]

[removed: | • | Income from operations for fiscal 2016] [added: Net revenue] increased [removed: 14% to $421.2] [added: $283.9] million, [removed: from $369.1 million] [added: or 14%, to $2.3 billion] in fiscal [removed: 2015. As a percentage of net revenue, income] [added: 2016] from [removed: operations increased to 18.0% compared to 17.9% of net revenue] [added: $2.1 billion] in fiscal 2015. [removed: |]

Management's Discussion and Analysis of Financial Condition and Results of Operations" for reconciliations between constant dollar changes in net revenue, total comparable sales, comparable store sales, and direct to consumer net revenue, and [removed: the] [added: adjusted gross profit, gross margin, income from operations, operating margin, income tax expense,] effective tax [removed: rate] [added: rates,] and diluted earnings per [removed: share excluding certain tax and related interest adjustments,] [added: share,] and the most directly comparable measures calculated in accordance with GAAP.

Net revenue is comprised of company-operated store sales, direct to consumer sales through www.lululemon.com, [removed: www.ivivva.com, and] other country and region specific websites, and [added: mobile apps, including mobile apps on in-store devices that allow demand to be fulfilled via our distribution centers, and] other net revenue, which includes outlet sales, [removed: showroom sales,] sales from temporary locations, sales to wholesale accounts, [added: showroom sales,] warehouse sales, and license and supply arrangement net revenue, which consists of royalties as well as sales of our products to licensees.

Selling, general and administrative expenses consist of all operating costs not otherwise included in cost of goods [removed: sold.][added: sold or asset impairment and restructuring costs.]

We expect selling, general and administrative expenses to increase in fiscal [removed: 2017] [added: 2018] 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.

| | | Fiscal Year Ended [added: January 28, 2018] | | | | | | | | | | | [added: | | | |]

| | | January [removed: 29, 2017] [added: 28, 2018] | | | | January [removed: 31, 2016] [added: 29, 2017] | | | | [removed: February 1, 2015] [added: January 31, 2016] | | |

| Net revenue | | $ | [removed: 2,344,392] [added: 2,649,181] | | | $ | [removed: 2,060,523] [added: 2,344,392] | | | $ | [removed: 1,797,213] [added: 2,060,523] | |

| Cost of goods sold | | [removed: 1,144,775] [added: 1,250,391] | | | | [removed: 1,063,357] [added: 1,144,775] | | | | [removed: 883,033] [added: 1,063,357] | | |

| Gross profit | | [removed: 1,199,617] [added: 1,398,790] | | | | [removed: 997,166] [added: 1,199,617] | | | | [removed: 914,180] [added: 997,166] | | |

| Selling, general and administrative expenses | | [removed: 778,465] [added: 904,264] | | | | [removed: 628,090] [added: 778,465] | | | | [removed: 538,147] [added: 628,090] | | |

| Income from operations | | [removed: 421,152] [added: 456,001] | | | | [removed: 369,076] [added: 421,152] | | | | [removed: 376,033] [added: 369,076] | | |

| Other income (expense), net | | [removed: 1,577] [added: 3,997] | | | | [removed: (581] [added: 1,577] | | [removed: )] | | [removed: 7,102] [added: (581] | | [added: )] |

| Income before income tax expense | | [removed: 422,729] [added: 459,998] | | | | [removed: 368,495] [added: 422,729] | | | | [removed: 383,135] [added: 368,495] | | |

| Income tax expense | | [removed: 119,348] [added: 201,336] | | | | [removed: 102,448] [added: 119,348] | | | | [removed: 144,102] [added: 102,448] | | |

| Net income | | $ | [removed: 303,381] [added: 258,662] | | | $ | [removed: 266,047] [added: 303,381] | | | $ | [removed: 239,033] [added: 266,047] | |

| | | Fiscal Year Ended [added: January 29, 2017] | | | | | | | | [added: | | |]

| | | January [added: 28, 2018 | | | January] 29, 2017 | | | January 31, 2016 | | [removed: | February 1, 2015 | |]

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

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

| Selling, general and administrative expenses | | [removed: 33.2] [added: 34.1] | | | [removed: 30.5] [added: 33.2] | | | [removed: 30.0] [added: 30.5] | |

| Income from operations | | [removed: 18.0] [added: 17.2] | | | [removed: 17.9] [added: 18.0] | | | [removed: 20.9] [added: 17.9] | |

| Other income (expense), net | | [removed: —] [added: 0.2] | | | — | | | [removed: 0.4] [added: —] | |

| Income before income tax expense | | [removed: 18.0] [added: 17.4] | | | [removed: 17.9] [added: 18.0] | | | [removed: 21.3] [added: 17.9] | |

| Income tax expense | | [removed: 5.1] [added: 7.6] | | | [removed: 5.0] [added: 5.1] | | | [removed: 8.0] [added: 5.0] | |

| Net income | | [removed: 12.9] [added: 9.8] | % | | 12.9 | % | | [removed: 13.3] [added: 12.9] | % |

Net revenue [added: from our company-operated stores segment] increased [removed: $283.9] [added: $188.0] million, or [removed: 14%,] [added: 12%,] to [removed: $2.344] [added: $1.7] billion in fiscal 2016 from [removed: $2.061] [added: $1.5] billion in fiscal 2015.

Net revenue from our company-operated stores segment increased [removed: $188.0] [added: $132.7] million, or [removed: 12%,] [added: 8%,] to [removed: $1.704] [added: $1.8] billion in fiscal [removed: 2016] [added: 2017] from [removed: $1.516] [added: $1.7] billion in fiscal [removed: 2015.][added: 2016.]

| • | 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, [removed: which included 27 stores in the United States, four] [added: including 31] stores in [removed: Canada, three] [added: North America, eight] stores in [removed: each of China] [added: Asia Pacific,] and [removed: the United Kingdom, two] [added: four] stores in [removed: South Korea, and one store in each of Australia, Hong Kong, Singapore, and Switzerland.] [added: Europe.] |

Gross profit increased $202.5 million, or 20%, to [removed: $1.200] [added: $1.2] billion in fiscal 2016 from $997.2 million in fiscal 2015.

The increase in selling, general and administrative expenses was [removed: principally comprised of:][added: primarily due to:]

| • | an increase in net foreign exchange [removed: 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 [removed: 2015.] [added: 2015;] |

On a segment basis, we determine income from operations without taking into account our general corporate [removed: expenses.][added: expenses and the costs we incur in connection with the restructuring of our ivivva operations.]

There was also a $20.3 million increase in foreign exchange [removed: revaluation] losses.

This was primarily the result of a $1.8 million reduction in net interest expense related to certain tax adjustments that are outlined in Note [removed: 15] [added: 14] to the [added: audited] consolidated financial statements included in Item 8 of Part II of this report, as well as interest earned on our increased cash and cash equivalents in fiscal 2016 compared to fiscal 2015.

Fiscal 2016 and fiscal 2015 included certain tax adjustments which resulted in net income tax recoveries of $10.7 million and $7.4 million, respectively, as outlined in Note [removed: 15] [added: 14] to the [added: audited] consolidated financial statements included in Item 8 of Part II of this report.

On a constant dollar basis, assuming the average exchange rates in fiscal [removed: 2015] [added: 2017] remained constant with the average exchange rates in fiscal [removed: 2014,] [added: 2016,] net revenue increased [removed: $352.2] [added: $290.6] million, or [removed: 20%.][added: 12%.]

Fiscal 2017 was a strong year for our company.

New stores and new store formats, product innovations, and an enhanced e-commerce offering, combined with successful community and brand initiatives helped drive a 13% increase in net revenue.

We had a 7% increase in total comparable sales.

Our product design and development teams launched a number of new category innovations this year.

For women, our newest fabric Everlux was created for high intensity, indoor workouts and the Enlite bra offers guests proprietary technology for running and high impact training.

For men, we expanded our popular ABC pant franchise to include slim and jogger styles, and all of our men's fixed waist bottoms now feature our ABC construction.

We look forward to delivering on a strong pipeline of innovation and product rollouts in fiscal 2018.

During the year, we opened 46 net new lululemon branded company-operated stores, including 30 in North America, 14 in Asia Pacific, and two in Europe.

Our multiple formats now include standard, co-located, local, and select flagship locations, which allow us to cater to our guests where they live, work, and sweat.

As of January 28, 2018, we had 57 stores in Asia Pacific and 13 stores in Europe, including our European flagship on London's Regent Street which showcases the fullest expression of our brand to both local and travelling guests.

We expanded in Germany in fiscal 2017 with a new location in Munich.

In Asia, we opened nine new stores in China during fiscal 2017, in addition to growing our local e-commerce presence via Tmall, and opening company-operated stores in Japan.

We relaunched our websites at the end of the third quarter of fiscal 2017, improving the online experience through upgraded visuals, added video content, more intuitive navigation, enhanced storytelling, and the integration of ivivva.

The sales performance of our e-commerce business, which accelerated throughout the year, culminated in a 44% increase in direct to consumer net revenue in the fourth quarter of fiscal 2017 compared to the fourth quarter of fiscal 2016.

In fiscal 2018 we plan to continue to develop our omni-channel experience to serve guests wherever and however they choose to shop, including launching a WeChat store in China.

Our grassroots approach to brand-building - locally led by stores and store associates, who we call educators - enables us to connect with and uniquely understand our guest.

We hosted several events during the year, including our annual SeaWheeze half marathon in Vancouver, The Ghost Race in 15 cities in North America, the Sweatlife Festival in London, and Unroll China across multiple cities.

We complemented our local efforts with our first global marketing campaign "This Is Yoga", followed by men's focused "Strength To Be" and finally, for holiday, "Breathe It All In".

We look forward to continuing this strong momentum into fiscal 2018, focusing on our four key strategic growth pillars: Digital, Men's, North America, and International, underpinned by innovations in product, our distinctive brand and community approach, and our vertically-integrated model.

The summary below provides both GAAP and non-GAAP financial measures.

In connection with the restructuring of our ivivva operations, we recognized pre-tax costs totaling $47.2 million in fiscal 2017, and a related income tax recovery of $12.7 million.

We recognized a provisional income tax expense of $59.3 million in fiscal 2017 related to the U.S. Tax Cuts and Jobs Act.

The adjusted financial measures exclude these items, and also exclude certain discrete items related to our transfer pricing arrangements and taxes on repatriation of foreign earnings which were recognized during the fiscal 2016.

For the fiscal year ended January 28, 2018, compared to the fiscal year ended January 29, 2017:

| • | Net revenue increased 13% to $2.6 billion. On a constant dollar basis, net revenue increased 12%. |

| • | Gross profit increased 17% to $1.4 billion. Adjusted gross profit increased 17% to $1.4 billion. |

| • | Gross margin increased 160 basis points to 52.8%. Adjusted gross margin increased 190 basis points to 53.1%. |

| • | Income from operations increased 8% to $456.0 million. Adjusted income from operations increased 19% to $503.2 million. |

| • | Operating margin decreased 80 basis points to 17.2%. Adjusted operating margin increased 100 basis points to 19.0%. |

| • | Income tax expense increased 69% to $201.3 million. Our effective tax rate for fiscal 2017 was 43.8% compared to 28.2% for fiscal 2016. The adjusted effective tax rate was 30.5% for fiscal 2017 compared to 30.7% for fiscal 2016. |

| • | Diluted earnings per share were $1.90 for fiscal 2017 compared to $2.21 in fiscal 2016. Adjusted diluted earnings per share were $2.59 for fiscal 2017 compared to $2.14 for fiscal 2016. |

Asset impairment and restructuring costs consist of the lease termination, impairment of property and equipment, employee related costs, and other restructuring costs recognized in connection with the restructuring of our ivivva operations.

| Asset impairment and restructuring costs | | 38,525 | | | | — | | | | — | | |

| Asset impairment and restructuring costs | | 1.5 | | | — | | | — | |

Comparison of Fiscal 2017 to Fiscal 2016

Net revenue increased $304.8 million, or 13%, to $2.6 billion in fiscal 2017 from $2.3 billion in fiscal 2016.

| Company-operated stores | | $ | 1,837,065 | | | $ | 1,704,357 | | | 69.3 | % | | 72.7 | % |

| Direct to consumer | | 577,590 | | | | 453,287 | | | | 21.8 | | | 19.3 | |

| Other | | 234,526 | | | | 186,748 | | | | 8.9 | | | 8.0 | |

| Net revenue | | $ | 2,649,181 | | | $ | 2,344,392 | | | 100.0 | % | | 100.0 | % |

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. |

| • | 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 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. |

| • | Diluted earnings per share for fiscal 2016 were $2.21 compared to $1.89 in fiscal 2015. Excluding the above tax and related interest adjustments, diluted earnings per share were $2.14 for fiscal 2016 and $1.86 for fiscal 2015. |

| | | | | | | | | | |

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

| | | | | | | | | | |

Comparison of Fiscal 2015 to Fiscal 2014

Net revenue increased $263.3 million, or 15%, to $2.061 billion in fiscal 2015 from $1.797 billion in fiscal 2014.

| | | 2015 | | | | 2014 | | | | 2015 | | | 2014 | |

| Company-operated stores | | $ | 1,516,323 | | | $ | 1,348,225 | | | 73.6 | % | | 75.0 | % |

| Direct to consumer | | 401,525 | | | | 321,180 | | | | 19.5 | | | 17.9 | |

| Other | | 142,675 | | | | 127,808 | | | | 6.9 | | | 7.1 | |

| Net revenue | | $ | 2,060,523 | | | $ | 1,797,213 | | | 100.0 | % | | 100.0 | % |

Net revenue from our company-operated stores segment increased $168.1 million, or 12%, to $1.516 billion in fiscal 2015 from $1.348 billion in fiscal 2014.

During fiscal 2015 we opened 61 net new stores, which included 49 stores in the United States, three stores in Canada, four stores in the United Kingdom, two stores in Hong Kong, and one store in each of Germany, Puerto Rico, and Singapore.

The increase in net revenue was partially offset by a decrease of $7.3 million from comparable store sales.

Comparable store sales decreased by less than 1% in fiscal 2015 compared to fiscal 2014.

Comparable store sales on a constant dollar basis 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.

The increase in net revenue from our direct to consumer segment was primarily the result of an increase in the number of transactions which was driven by increased traffic and higher conversion rates on our e-commerce websites.

This was partially offset by fewer temporary locations open during fiscal 2015 compared to fiscal 2014.

Gross profit increased $83.0 million, or 9%, to $997.2 million in fiscal 2015 from $914.2 million in fiscal 2014.

| • | an increase in fixed costs, such as occupancy costs and depreciation, relative to the increase in net revenue, of 90 basis points; |

| • | an unfavorable impact of foreign exchange rates on product costs which contributed to a decrease in gross margin of 90 basis points; and |

| • | a decrease in product margin of 70 basis points, primarily due to an increase in markdowns and discounts, as well as other product related costs. |

| • | an increase in other costs of $10.9 million for our operating channels such as repairs and maintenance costs, digital marketing expenses, and store community costs. |

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

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

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

During fiscal [removed: 2015,] [added: 2017,] the change in the relative value of the U.S. dollar against the Canadian dollar resulted in a [removed: $63.2] [added: $44.4] million [removed: increase] [added: reduction] in accumulated other comprehensive loss within stockholders' equity.

A 10% [removed: appreciation] [added: depreciation] in the relative value of the U.S. dollar against the Canadian dollar compared to the exchange rates in effect for fiscal [removed: 2016] [added: 2017] would have resulted in additional income from operations of approximately [removed: $0.2] [added: $1.0] million in fiscal [removed: 2016.][added: 2017.]

This assumes a consistent 10% [removed: appreciation] [added: depreciation] in the U.S. dollar against the Canadian dollar throughout the fiscal year.

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

As of January [removed: 29, 2017,] [added: 28, 2018,] aside from letters of credit of [removed: $0.8] [added: $1.2] million, we had no other borrowings outstanding under this credit facility.

As of January 28, 2018, we had certain forward currency contracts outstanding in order to hedge a portion of the foreign currency exposure that arises on translation of a Canadian subsidiary into U.S. dollars.

We also had certain forward currency contracts outstanding in an effort to reduce our exposure to the foreign exchange revaluation gains and losses that are recognized by our Canadian subsidiaries on U.S. dollar denominated monetary assets and liabilities.

Please refer to Note 12 to our audited consolidated financial statements included in Item 8 of Part II of this report for further information, including details of the notional amounts outstanding.

In the future, in an effort to reduce foreign exchange risks, we may enter into further derivative financial instruments including hedging additional currency pairs.

| • | the following impacts to the consolidated statements of operations: |

| | |

| --- | --- |

| | |

| --- | --- |

| – | derivative valuation gains on forward currency contracts not designated in a hedging relationship; |

| | |

| --- | --- |

| • | the following impacts to the consolidated balance sheets: |

| | |

| --- | --- |

| – | an increase in the foreign currency translation adjustment which arises on the translation of our Canadian subsidiaries' balance sheets into U.S. dollars; and |

| | |

| --- | --- |

| – | a decrease in the foreign currency translation adjustment from derivative valuation losses on forward currency contracts, entered into as net investment hedges of a Canadian subsidiary. |

Our cash and cash equivalent balances are held in the form of cash on hand, bank balances, and short-term deposits with original maturities of three months or less.

We do not believe these balances are subject to material interest rate risk.

Credit Risk.

We have cash and cash equivalents on deposit with various large, reputable financial institutions.

The amount of cash and cash equivalents held with certain financial institutions exceeds government-insured limits.

We are also exposed to credit-related losses in the event of nonperformance by the financial institutions that are counterparties to our forward currency contracts.

The credit risk amount is our unrealized gains on our derivative instruments, based on foreign currency rates at the time of nonperformance.

We have not experienced any losses related to these items, and we believe credit risk to be minimal.

We seek to minimize our credit risk by entering into transactions with credit worthy and reputable financial institutions and by monitoring the credit standing of the financial institutions with whom we transact.

We seek to limit the amount exposure with any one counterparty.

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates.

Our market risk exposure is primarily a result of fluctuations in interest rates and foreign currency exchange rates.

We do not hold or issue financial instruments for trading purposes.

We have not historically hedged foreign currency fluctuations.

However, in the future, in an effort to mitigate these risks, we may at times enter into derivative financial instruments, although we have not historically done so.

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

[removed: We] [added: Since our inception, we have fostered a distinctive corporate culture; 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.

These core values attract passionate and motivated employees who are driven to [removed: succeed] [added: achieve personal] and [added: professional goals, and] share our purpose of "elevating the world [removed: from mediocrity to greatness."][added: through the power of practice."]

In this Annual Report on Form 10-K ("10-K" or "Report") for the fiscal year ended January [removed: 29, 2017] [added: 28, 2018] ("fiscal [removed: 2016"),] [added: 2017"),] lululemon athletica inc. (together with its subsidiaries) is referred to as "lululemon," "the Company," "we," "us" or "our."

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

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

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

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

Our direct to consumer segment includes the net revenue which we generate from our [removed: lululemon and ivivva] e-commerce [removed: websites, www.lululemon.com and www.ivivva.com, and] [added: website www.lululemon.com,] other country and region specific [removed: websites.][added: websites, and mobile apps, including mobile apps on in-store devices that allow demand to be fulfilled via our distribution centers.]

Segment information is included in Note [removed: 16] [added: 19] to our [added: audited] consolidated financial statements included in Item 8 of Part II of this report.

As of January [removed: 29, 2017,] [added: 28, 2018,] our retail footprint included [removed: 406] [added: 404] company-operated stores.

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

Our company-operated stores by brand, and by country, as of January [removed: 29, 2017] [added: 28, 2018] and January [removed: 31, 2016,] [added: 29, 2017,] are summarized in the table below:

| | | January [removed: 29, 2017] [added: 28, 2018] | | | January [removed: 31, 2016] [added: 29, 2017] | |

| United States | | [removed: 245] [added: 4] | | | [removed: 229] [added: 42] | |

| Canada | | [removed: 51] [added: 57] | | | [removed: 48] [added: 51] | |

| Australia | | [removed: 27] [added: 28] | | | [removed: 26] [added: 27] | |

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

| New Zealand | | [removed: 5] [added: 6] | | | 5 | |

| [removed: China] [added: China(2)] | | [removed: 3] [added: 15] | | | [removed: —] [added: 6] | |

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

| South Korea | | [removed: 2] [added: 3] | | | [removed: —] [added: 2] | |

| Germany | | [removed: 1] [added: 2] | | | 1 | |

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

| United [removed: States] [added: States(1)] | | [removed: 42] [added: 270] | | | [removed: 31] [added: 246] | |

| Canada | | [removed: 13] [added: 3] | | | [removed: 12] [added: 13] | |

| Total | | [removed: 406] [added: 404] | | | [removed: 363] [added: 406] | |

We opened [removed: 43] [added: 46] net new [added: lululemon branded] company-operated stores in fiscal [removed: 2016,] [added: 2017,] including [removed: 12] [added: 16] net new stores outside of North America.

In fiscal [removed: 2017,] [added: 2018,] our new store growth will come primarily from new company-operated stores in the United States and an acceleration in our company-operated store openings in Asia.

During fiscal [removed: 2016,] [added: 2017,] our company-operated stores open at least one year, which average approximately [removed: 2,941] [added: 3,012] square feet, averaged sales of [removed: $1,521] [added: $1,554] per square foot.

Direct to consumer is a substantial part of our business, representing approximately [removed: 19.3%] [added: 21.8%] of our net revenue in fiscal [removed: 2016.][added: 2017.]

We believe that [removed: a direct to consumer channel] [added: e-commerce] is convenient for our core customer and enhances the image of our brand.

Other net revenue accounted for [removed: 8.0%] [added: 8.9%] of total net revenue in fiscal [removed: 2016,] [added: 2017,] compared to [removed: 6.9%] [added: 8.0%] in fiscal [removed: 2015,] [added: 2016,] and [removed: 7.1%] [added: 6.9%] of total net revenue in fiscal [removed: 2014.][added: 2015.]

| • | Outlets and warehouse sales - We utilize outlets as well as [added: physical] warehouse sales, which are held from time to time, to sell slow moving inventory and inventory from prior seasons to retail customers at discounted prices. |

| • | Temporary locations - Our temporary [removed: locations] [added: locations, including seasonal stores,] are typically opened for a short period of time in markets in which we may not already have a presence. |

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

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

As of January [removed: 29, 2017,] [added: 28, 2018,] there were three licensed [removed: stores] [added: retail locations] in the United Arab [removed: Emirates and] [added: Emirates,] one [removed: licensed store] in Qatar, [added: and one in Mexico, which are] not included in the above company-operated stores table.

We utilize a community-based approach to [removed: building] [added: build] brand awareness and customer loyalty.

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

We have a mission to create transformational products and experiences which enable people to live a life they love, and have developed a brand for those pursuing an active, mindful lifestyle.

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

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

In this way, we believe we solve problems for our guests, helping us advance our product lines and differentiate us from the competition.

Our guests seek a combination of performance, style, and sensation in their athletic apparel, choosing products that allow them to feel great however they exercise.

Since consumer purchase decisions are driven by both an actual need for functional products and a desire to live a particular lifestyle, we believe the credibility of our brand and the authentic community experiences we offer expand our potential market beyond just athletes to those who pursue an active, mindful, and balanced life.

Although our primary and largest customer group is made up of women, we also design a comprehensive men's line and have a targeted strategy in place to serve our male guests.

Our business is growing as more men discover the technical rigor and premium quality of our products, and are attracted by our distinctive brand.

North America is our largest market by geographical split, offering a mature health and wellness industry and sophisticated consumer.

Additionally, we are expanding internationally across Europe (including the United Kingdom and Germany) and Asia Pacific (including China, South Korea, and Japan).

We are expanding in these regions via a decentralized model, allowing for local community insight and consumer preference to inform our strategic expansion.

We operate in both the physical and digital space to better cater to the shopping desires of our guest.

At the end of fiscal 2017, we had 404 stores in 12 countries across the globe.

In addition to being a venue to sell product, our stores give us a direct connection to our guest, which we view as a valuable tool in helping us build our brand and product line.

| Japan | | 2 | | | — | |

| Ireland | | 1 | | | — | |

| | | 397 | | | 351 | |

| | | 7 | | | 55 | |

__________

| (1) | Included within the United States as of January 28, 2018 and January 29, 2017, was one company-operated store in the Commonwealth of Puerto Rico. |

| (2) | Included within China as of January 28, 2018, were three company-operated stores in the Hong Kong Special Administrative Region and one company-operated store in the Taiwan Province. As of January 29, 2017, there were three company-operated stores in the Hong Kong Special Administrative Region and no company-operated stores in the Taiwan Province. |

In fiscal 2017, we closed three of our lululemon branded company-operated stores, and on August 20, 2017, as part of the restructuring of our ivivva operations, we closed 48 of our 55 ivivva branded company-operated stores.

The seven remaining ivivva branded stores remain in operation and are not expected to close.

We continue to evolve and integrate our digital and physical channels in order to enrich our interactions with our guests, and to provide an enhanced omni-channel experience.

| | |

| --- | --- |

| | |

| --- | --- |

The initial term of the agreement for the Middle East expires in January 2020, and the initial term of the agreement for Mexico expires in November 2026.

Our first global marketing campaign launched in fiscal 2017, and we plan to continue to explore how we complement and amplify our community-based initiatives with global brand-building activity.

our products in fiscal 2017.

We also believe our ability to introduce new product innovations and combine function and fashion sets us apart from our competition.

Excluding the costs we incurred in connection with the ivivva restructuring, we generated approximately 51% of our operating profit during the fourth quarter of fiscal 2017.

We believe that our people are key to the success of our business, and we strive to foster a distinctive corporate culture rooted in our core business values which attract passionate and motivated employees who are driven to achieve personal and professional goals.

In addition, we own many other trademarks for

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

Our design team continues to source and develop technically advanced fabrics and innovative functional features that we believe will help advance our product lines and differentiate us from the competition.

Our primary target customer is a sophisticated and educated woman who understands the importance of an active, healthy lifestyle.

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

We believe she pursues exercise to achieve physical fitness and inner peace.

As women have continued to embrace a variety of fitness and athletic activities, including yoga, we believe we have been able to effectively address their unique fit and performance needs by incorporating style along with comfort and functionality into our products through our vertical retail strategy.

Although we were founded to address the unique needs of women, we are also successfully designing products for men and female youth who appreciate the technical rigor and premium quality of our products.

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

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.

As of January 29, 2017, we operated 406 stores located in the United States, Canada, Australia, the United Kingdom, New Zealand, China, Hong Kong, Singapore, South Korea, Germany, Puerto Rico and Switzerland.

We believe our vertical retail strategy allows us to interact more directly with, and gain feedback from, our customers, whom we call guests, while providing us with greater control of our brand.

| Hong Kong | | 3 | | | 2 | |

| Puerto Rico | | 1 | | | 1 | |

| | | 351 | | | 320 | |

| | | 55 | | | 43 | |

In fiscal 2016, we closed three of our company-operated stores.

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 believe our distribution infrastructure will be sufficient to accommodate our expected store growth and expanded product offerings over the next several years.

In addition to the legal matters described in Note [removed: 12] [added: 16] to our [added: audited] 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, employment claims, and similar matters.

For the fiscal year ended January [removed: 29, 2017][added: 28, 2018]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [removed: or] a smaller reporting [added: company, or an emerging growth] company.

See the definitions of "large accelerated filer," "accelerated [removed: filer" and] [added: filer,"] "smaller reporting [added: company," and "emerging growth] company" in Rule 12b-2 of the Exchange Act.

The aggregate market value of the voting stock held by non-affiliates of the registrant on July [removed: 29, 2016] [added: 28, 2017] was approximately [removed: $4,913,000,000.][added: $4,703,000,000.]

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: 29, 2016.][added: 28, 2017.]

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 voting stock of the registrant on July [removed: 29, 2016.][added: 28, 2017.]

At March [removed: 23, 2017] [added: 21, 2018] there were [removed: 127,272,795] [added: 125,679,588] shares of the registrant's common stock, par value $0.005 per share, outstanding.

At March [removed: 23, 2017,] [added: 21, 2018,] there were outstanding [removed: 9,780,927] [added: 9,776,421] exchangeable shares of Lulu Canadian Holding, Inc., a wholly-owned subsidiary of the registrant.

In addition, at March [removed: 23, 2017,] [added: 21, 2018,] the registrant had outstanding [removed: 9,780,927] [added: 9,776,421] 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.

[removed: |] Portions of [added: the] Proxy Statement for the [removed: 2017] [added: 2018] Annual Meeting of Stockholders [removed: | |] [added: have been incorporated by reference into] Part III [removed: |][added: of this Annual Report on Form 10-K.]

| Item 1. | [removed: [BUSINESS](#sFDCD16A6734991DDBB3318514F8FCE0E)] [added: [BUSINESS](#sDCE6D91C278E5AB6800A29F87DE3411D)] | [removed: [1](#sFDCD16A6734991DDBB3318514F8FCE0E)] [added: [1](#sDCE6D91C278E5AB6800A29F87DE3411D)] |

| Item 1A. | [RISK [removed: FACTORS](#s425AADF2A36C1F130A1718514FC7E95A)] [added: FACTORS](#s342CB58300BE538BB64EB7584FDC7416)] | [removed: [5](#s425AADF2A36C1F130A1718514FC7E95A)] [added: [6](#s342CB58300BE538BB64EB7584FDC7416)] |

| Item 2. | [removed: [PROPERTIES](#s5346D730DDE743B551D118514FE92ADC)] [added: [PROPERTIES](#s51B4461BEB9456CB8F1BF02765A5F865)] | [removed: [13](#s5346D730DDE743B551D118514FE92ADC)] [added: [15](#s51B4461BEB9456CB8F1BF02765A5F865)] |

| Item 3. | [LEGAL [removed: PROCEEDINGS](#sF17EE8D6B13330B34E3E18515004880F)] [added: PROCEEDINGS](#s6BF658E5234D5F7C9DC7DFF54DCB3F0C)] | [removed: [14](#sF17EE8D6B13330B34E3E18515004880F)] [added: [15](#s6BF658E5234D5F7C9DC7DFF54DCB3F0C)] |

| Item 5. | [MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY [removed: SECURITIES](#s6C3F665A77EACBE839FC185149664F08)] [added: SECURITIES](#sEF2D907E3A1150FA9B527B65265E1213)] | [removed: [15](#s6C3F665A77EACBE839FC185149664F08)] [added: [16](#sEF2D907E3A1150FA9B527B65265E1213)] |

| Item 6. | [SELECTED CONSOLIDATED FINANCIAL [removed: DATA](#s6F3F5FEB70D7FE2EAD2E1851473CBE80)] [added: DATA](#sB36145D3098A5153860A891CCB1CC30A)] | [removed: [18](#s6F3F5FEB70D7FE2EAD2E1851473CBE80)] [added: [18](#sB36145D3098A5153860A891CCB1CC30A)] |

| Item 7. | [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF [removed: OPERATIONS](#s29C945FE2D91CC11F3AD185150D8AF33)] [added: OPERATIONS](#s6C2F46D0ECCB5CD793C4CA26FEAF8D00)] | [removed: [19](#s29C945FE2D91CC11F3AD185150D8AF33)] [added: [20](#s6C2F46D0ECCB5CD793C4CA26FEAF8D00)] |

| Item 7A. | [QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET [removed: RISK](#s57971B694A7C10419C781851529F0812)] [added: RISK](#s0CA1652DB0B35B138A19D8A8E5CBEDD4)] | [removed: [34](#s57971B694A7C10419C781851529F0812)] [added: [38](#s0CA1652DB0B35B138A19D8A8E5CBEDD4)] |

| Item 8. | [FINANCIAL STATEMENTS AND SUPPLEMENTARY [removed: DATA](#sC38814ADB414B9987171185152D22E0E)] [added: DATA](#s0004231B68925F6A8491CF6D1D5F8552)] | [removed: [36](#sC38814ADB414B9987171185152D22E0E)] [added: [40](#s0004231B68925F6A8491CF6D1D5F8552)] |

| | [INDEX FOR NOTES TO THE CONSOLIDATED FINANCIAL [removed: STATEMENTS](#sb1a9ebeb36cc42dda1ec35b6dce5f477)] [added: STATEMENTS](#s897B1C89E3505482B860D459AE981AA1)] | [removed: [43](#sb1a9ebeb36cc42dda1ec35b6dce5f477)] [added: [48](#s897B1C89E3505482B860D459AE981AA1)] |

| Item 9A. | [CONTROLS AND [removed: PROCEDURES](#sD2A12E48EF39042FCD9A185157603164)] [added: PROCEDURES](#s51EBEE8D27FD589EBEBA8464FE0E2D95)] | [removed: [63](#sD2A12E48EF39042FCD9A185157603164)] [added: [73](#s51EBEE8D27FD589EBEBA8464FE0E2D95)] |

| [PART [removed: III](#s5EBC29BAA4BE2378E42418515781625F)] [added: III](#s86BC29D666FB5D23AB5D212C35C58323)] | | |

| Item 10. | [DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE [removed: GOVERNANCE](#s28B47585553B0C2F212D185157B47909)] [added: GOVERNANCE](#sD01557379FE15E0F910C5A124396661B)] | [removed: [64](#s28B47585553B0C2F212D185157B47909)] [added: [75](#sD01557379FE15E0F910C5A124396661B)] |

| Item 11. | [EXECUTIVE [removed: COMPENSATION](#sEA64BF8AF4DA6EB3C3D8185157D4B843)] [added: COMPENSATION](#s52FFF05CAE39585C92F3D604F0A6D342)] | [removed: [64](#sEA64BF8AF4DA6EB3C3D8185157D4B843)] [added: [75](#s52FFF05CAE39585C92F3D604F0A6D342)] |

| Item 12. | [SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER [removed: MATTERS](#s67B9CD55AA2885E3A5AF185147439484)] [added: MATTERS](#s1AAAE0A63D775AA0B054CCCF06096F2C)] | [removed: [64](#s67B9CD55AA2885E3A5AF185147439484)] [added: [75](#s1AAAE0A63D775AA0B054CCCF06096F2C)] |

| Item 13. | [CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR [removed: INDEPENDENCE](#sC40E471CF7F77639C17C185158269887)] [added: INDEPENDENCE](#s49B925243E7857C1A8B8D2C3E0D3A56C)] | [removed: [65](#sC40E471CF7F77639C17C185158269887)] [added: [75](#s49B925243E7857C1A8B8D2C3E0D3A56C)] |

| Item 14. | [PRINCIPAL ACCOUNTANT FEES AND [removed: SERVICES](#sDB935DA8B339F091ABE418515859CB45)] [added: SERVICES](#s3D9B5BDCB6695A7FAF56F913FFE5ADF1)] | [removed: [65](#sDB935DA8B339F091ABE418515859CB45)] [added: [76](#s3D9B5BDCB6695A7FAF56F913FFE5ADF1)] |

| Item 15. | [EXHIBITS AND FINANCIAL STATEMENT [removed: SCHEDULE](#s64A86D1FCA1E5779D5D8185158ACEEDA)] [added: SCHEDULE](#s68839660A1E85853A0BE91D56CF6420F)] | [removed: [66](#s64A86D1FCA1E5779D5D8185158ACEEDA)] [added: [77](#s68839660A1E85853A0BE91D56CF6420F)] |

10-K 1 lulu-20180128x10k.htm 10-K

| Emerging growth company | | o | | | | |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

| [PART I](#s43A9C853B0BD5D89A59CBB1EEB534D93) | | |

| [PART II](#s6F298920FEE75C14A95CF37DA1751C76) | | |

| [PART IV](#s5AB7255296DC5BD49EC1485EFF35FCA2) | | |

This report and some documents incorporated herein by reference include estimates, projections, statements relating to our business plans, objectives, and expected operating results that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

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

| | | |

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

| | | |

| DOCUMENT | | PARTS INTO WHICH INCORPORATED |

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

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

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

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended.

As of January [removed: 29, 2017,] [added: 28, 2018,] we operated [removed: five] [added: four] distribution centers located in the United States, Canada, and Australia.

During fiscal [removed: 2016] [added: 2017] we [removed: began relocating] [added: completed the relocation of] our [removed: existing leased] distribution center [added: facilities] in Vancouver, BC to a new [removed: 145,000] [added: 155,000] square foot leased premises in Vancouver, BC.

In addition to those distribution centers, we hold inventory at warehouses managed by third-parties in Hong Kong, [removed: China,] [added: Rotterdam,] and [removed: the Netherlands.][added: Shanghai.]

The general location, use and approximate size of our principal owned properties [removed: at] [added: as of] January [removed: 29, 2017,] [added: 28, 2018,] are set forth below:

The general location, use, approximate size and lease renewal date of our principal non-retail leased properties [removed: at] [added: as of] January [removed: 29, 2017,] [added: 28, 2018,] are set forth below:

| Vancouver, BC | | Distribution Center | | [removed: 145,000] [added: 155,000] | | | January 2031 |

| Melbourne, VIC | | Distribution Center | | [removed: 55,000] [added: 50,000] | | | [removed: July 2017] [added: October 2022] |

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

As of January [removed: 29, 2017,] [added: 28, 2018,] we leased approximately [removed: 1.2] [added: 1.3] million gross square feet relating to [removed: 404] [added: 402] of our [removed: 406] [added: 404] stores.

Our [added: store] leases generally have initial terms of between five and 10 years, and generally can be extended [removed: only] in five-year increments, if at all.

We regularly evaluate our distribution infrastructure and consolidate or expand our distribution capacity as we believe appropriate for our operations and to meet anticipated needs.

This was completed in early fiscal 2017.

We believe our current administrative offices, distribution centers, and the warehouse space available through our third-party logistics providers will be sufficient for our near term expansion plans.

| Vancouver, BC | | Distribution Center | | 110,000 | | | April 2017 |

| Fiscal Year Ended January [removed: 31, 2016] [added: 28, 2018] | | | | | | | | |

As of March [removed: 23, 2017,] [added: 21, 2018,] 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 [removed: January 29, 2012] [added: February 3, 2013] (the date of our fiscal year end five years ago) and January [removed: 29, 2017,] [added: 28, 2018,] 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 [removed: January 29, 2012] [added: February 3, 2013] 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.

[removed: ][added: ]

| | | [removed: 29-Jan-12 | | | |] 03-Feb-13 | | | | 02-Feb-14 | | | | 01-Feb-15 | | | | 31-Jan-16 | | | | 29-Jan-17 | | | [added: | 28-Jan-18 | | |]

| S&P 500 Apparel, Accessories & Luxury Goods Index | | $ | 100.00 | | | $ | [removed: 91.54] [added: 114.44] | | | $ | [removed: 104.75] [added: 117.40] | | | $ | [removed: 107.46] [added: 97.15] | | | $ | [removed: 88.93] [added: 81.50] | | | $ | [removed: 74.60] [added: 106.09] | |

The following table provides information regarding our purchases of shares of our common stock during the thirteen weeks ended January [removed: 29, 2017] [added: 28, 2018] related to our stock repurchase program:

| October [removed: 31, 2016] [added: 30, 2017] - November [removed: 27, 2016] [added: 26, 2017] | | — | | | $ | — | | | — | | | $ | — | |

| (1) | Monthly information is presented by reference to our fiscal periods during our fourth quarter of fiscal [removed: 2016.] [added: 2017.] |

| (2) | Our stock repurchase program was approved by our board of directors in [removed: December 2016.] [added: November 2017.] Common shares [added: generally] are repurchased in the open market at prevailing market prices, including under [removed: 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 [removed: may] [added: are expected to] be [removed: made up until December 2018,] [added: completed by November 2019,] and the maximum dollar value of shares to be repurchased is [removed: $100] [added: $200] million. |

The following table provides information regarding our purchases of shares of our common stock during the thirteen weeks ended January [removed: 29, 2017] [added: 28, 2018] related to our Employee Share Purchase Plan:

| (1) | Monthly information is presented by reference to our fiscal periods during our fourth quarter of fiscal [removed: 2016.] [added: 2017.] |

| Fourth Quarter | | $ | 79.85 | | | $ | 60.24 | |

| Third Quarter | | 63.83 | | | | 57.39 | | |

| Second Quarter | | 62.02 | | | | 47.91 | | |

| First Quarter | | 67.76 | | | | 49.43 | | |

| lululemon athletica inc. | | $ | 100.00 | | | $ | 67.33 | | | $ | 97.61 | | | $ | 91.47 | | | $ | 98.47 | | | $ | 116.53 | |

| S&P 500 Index | | $ | 100.00 | | | $ | 117.81 | | | $ | 131.84 | | | $ | 128.22 | | | $ | 151.65 | | | $ | 189.86 | |

| November 27, 2017 - December 31, 2017 | | 13,317 | | | 74.56 | | | | 13,317 | | | 199,007,128 | | |

| January 1, 2018 - January 28, 2018 | | — | | | — | | | | — | | | 199,007,128 | | |

| Total | | 13,317 | | | | | | | 13,317 | | | | | |

| October 30, 2017 - November 26, 2017 | | 10,476 | | | $ | 63.56 | | | 10,476 | | | 4,918,281 | |

| November 27, 2017 - December 31, 2017 | | 13,974 | | | 73.70 | | | | 13,974 | | | 4,904,307 | |

| January 1, 2018 - January 28, 2018 | | 8,276 | | | 78.95 | | | | 8,276 | | | 4,896,031 | |

| Total | | 32,726 | | | | | | | 32,726 | | | | |

| Fourth Quarter | | $ | 62.07 | | | $ | 44.09 | |

| Third Quarter | | 66.70 | | | | 48.28 | | |

| Second Quarter | | 68.80 | | | | 59.79 | | |

| First Quarter | | 69.77 | | | | 60.96 | | |

| 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 | |

| 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 | | | | |

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: 28, 2018, January] 29, 2017, January 31, 2016, February 1, [removed: 2015, February 2, 2014] [added: 2015] and February [removed: 3, 2013.][added: 2, 2014.]

The consolidated statement of operations and comprehensive income data for each of the years ended January [added: 28, 2018, January] 29, [removed: 2017,] [added: 2017 and] January 31, 2016 and [removed: February 1, 2015 and] the consolidated balance sheet data as of January [removed: 29, 2017] [added: 28, 2018] and January [removed: 31, 2016] [added: 29, 2017] is derived from, and qualified by reference to, our audited consolidated financial statements and related notes appearing elsewhere in this Annual Report.

| | | January [added: 28, 2018 | | | | January] 29, 2017 | | | | January 31, 2016 | | | | February 1, 2015 | | | | February 2, 2014 | | | [removed: | February 3, 2013 | | |]

| Net revenue | | $ | [removed: 2,344,392] [added: 2,649,181] | | | $ | [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] | |

| Cost of goods sold | | [removed: 1,144,775] [added: 1,250,391] | | | | [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] | | |

| Gross profit | | [removed: 1,199,617] [added: 1,398,790] | | | | [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] | | |

| Selling, general and administrative expenses | | [removed: 778,465] [added: 904,264] | | | | [removed: 628,090] [added: 778,465] | | | | [removed: 538,147] [added: 628,090] | | | | [removed: 448,718] [added: 538,147] | | | | [removed: 386,387] [added: 448,718] | | |

| Income from operations | | [removed: 421,152] [added: 456,001] | | | | [removed: 369,076] [added: 421,152] | | | | [removed: 376,033] [added: 369,076] | | | | [removed: 391,358] [added: 376,033] | | | | [removed: 376,439] [added: 391,358] | | |

| Other income (expense), net | | [added: 3,997 | | | |] 1,577 | | | | (581 | | ) | | 7,102 | | | | 5,768 | | | [removed: | 4,957 | | |]

| Income before income tax expense | | [removed: 422,729] [added: 459,998] | | | | [removed: 368,495] [added: 422,729] | | | | [removed: 383,135] [added: 368,495] | | | | [removed: 397,126] [added: 383,135] | | | | [removed: 381,396] [added: 397,126] | | |

| Income tax expense | | [removed: 119,348] [added: 201,336] | | | | [removed: 102,448] [added: 119,348] | | | | [removed: 144,102] [added: 102,448] | | | | [removed: 117,579] [added: 144,102] | | | | [removed: 109,965] [added: 117,579] | | |

| Net income | | [removed: 303,381] [added: $] | [added: 258,662] | | | [removed: 266,047] [added: $] | [added: 303,381] | | | [removed: 239,033] [added: $] | [added: 266,047] | | | [removed: 279,547] [added: $] | [added: 239,033] | | | [removed: 271,431] [added: $] | [added: 279,547] | |

| Other comprehensive income [removed: (loss):] [added: (loss), net of tax:] | | | | | | | | | | | | | | | | | | | | |

| Foreign currency translation adjustment | | [removed: 36,703] [added: 58,577] | | | | [removed: (64,796] [added: 36,703] | | [removed: )] | | [removed: (105,339] [added: (64,796] | | ) | | [removed: (89,158] [added: (105,339] | | ) | | [removed: (459] [added: (89,158] | | ) |

| Comprehensive income | | $ | [removed: 340,084] [added: 317,239] | | | $ | [removed: 201,251] [added: 340,084] | | | $ | [removed: 133,694] [added: 201,251] | | | $ | [removed: 190,389] [added: 133,694] | | | $ | [removed: 270,097] [added: 190,389] | |

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

| Diluted earnings per share | | $ | [removed: 2.21] [added: 1.90] | | | $ | [removed: 1.89] [added: 2.21] | | | $ | [removed: 1.66] [added: 1.89] | | | $ | [removed: 1.91] [added: 1.66] | | | $ | [removed: 1.85] [added: 1.91] | |

| Basic weighted-average number of shares outstanding | | [removed: 137,086] [added: 135,988] | | | | [removed: 140,365] [added: 137,086] | | | | [removed: 143,935] [added: 140,365] | | | | [removed: 144,913] [added: 143,935] | | | | [removed: 144,000] [added: 144,913] | | |

| Diluted weighted-average number of shares outstanding | | [removed: 137,302] [added: 136,198] | | | | [removed: 140,610] [added: 137,302] | | | | [removed: 144,298] [added: 140,610] | | | | [removed: 146,043] [added: 144,298] | | | | [removed: 145,806] [added: 146,043] | | |

| | | January [added: 28, 2018 | | | | January] 29, 2017 | | | | January 31, 2016 | | | | February 1, 2015 | | | | February 2, 2014 | | | [removed: | February 3, 2013 | | |]

| Cash and cash equivalents | | $ | [removed: 734,846] [added: 990,501] | | | $ | [removed: 501,482] [added: 734,846] | | | $ | [removed: 664,479] [added: 501,482] | | | $ | [removed: 698,649] [added: 664,479] | | | $ | [removed: 590,179] [added: 698,649] | |

| Total assets | | [removed: 1,657,541] [added: 1,998,483] | | | | [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] | | |

| Total stockholders' equity | | [removed: 1,359,973] [added: 1,596,960] | | | | [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] | | |

| Asset impairment and restructuring costs | | 38,525 | | | | — | | | | — | | | | — | | | | — | | |

| Inventories | | 329,562 | | | | 298,432 | | | | 284,009 | | | | 208,116 | | | | 188,790 | | |

The consolidated statement of operations and comprehensive income for the year ended February 3, 2013 covers a 53 week period compared to a 52 week period for the other years.

| Net income attributable to non-controlling interest | | — | | | | — | | | | — | | | | — | | | | 875 | | |

| Net income attributable to lululemon athletica inc. | | $ | 303,381 | | | $ | 266,047 | | | $ | 239,033 | | | $ | 279,547 | | | $ | 270,556 | |

| [Report of Independent Registered Public Accounting [removed: Firm](#s8835A3A8E692588B1069185152F2340B)] [added: Firm](#s93B91D3F6AF15691ACD1C16EEB3F3D97)] | [removed: [37](#s8835A3A8E692588B1069185152F2340B)] [added: [41](#s93B91D3F6AF15691ACD1C16EEB3F3D97)] |

| [Consolidated Balance [removed: Sheets](#sB61725BED88397A47CAC185144BF7615)] [added: Sheets](#sE3492C757FA55509A9924B2817483131)] | [removed: [38](#sB61725BED88397A47CAC185144BF7615)] [added: [43](#sE3492C757FA55509A9924B2817483131)] |

| [Consolidated Statements of Operations and Comprehensive [removed: Income](#s3519C18B2EFF97665F14185144CCE535)] [added: Income](#sB2B3A7A7B6B059A6B31A6DC4C86867F2)] | [removed: [39](#s3519C18B2EFF97665F14185144CCE535)] [added: [44](#sB2B3A7A7B6B059A6B31A6DC4C86867F2)] |

| [Consolidated Statements of Stockholders' [removed: Equity](#s73483B264593A21B34A1185144E951D2)] [added: Equity](#s29F2DB5074C05794A556D92A7D6FD0C6)] | [removed: [40](#s73483B264593A21B34A1185144E951D2)] [added: [45](#s29F2DB5074C05794A556D92A7D6FD0C6)] |

| [Consolidated Statements of Cash [removed: Flows](#s303D1BA239BF8A2913BA185144067313)] [added: Flows](#s8DA364BE4201588FB055E5ED4DF6762F)] | [removed: [42](#s303D1BA239BF8A2913BA185144067313)] [added: [47](#s8DA364BE4201588FB055E5ED4DF6762F)] |

| [Index for Notes to the Consolidated Financial [removed: Statements](#sb1a9ebeb36cc42dda1ec35b6dce5f477)] [added: Statements](#s897B1C89E3505482B860D459AE981AA1)] | [removed: [43](#sb1a9ebeb36cc42dda1ec35b6dce5f477)] [added: [48](#s897B1C89E3505482B860D459AE981AA1)] |

To the Stockholders [added: and Board] of [added: Directors of] lululemon athletica inc.

We have audited the accompanying consolidated balance sheets of lululemon athletica inc. and its [removed: subsidiaries] [added: subsidiaries, (together, the Company)] as of January [removed: 29, 2017] [added: 28, 2018] and January [removed: 31, 2016] [added: 29, 2017,] and the related consolidated statements of operations and comprehensive income, stockholders' equity and cash flows for [added: each of] the [removed: 52-week] [added: 52 week] periods ended January [added: 28, 2018, January] 29, [removed: 2017,] [added: 2017 and] January 31, [removed: 2016] [added: 2016, including the related notes] and [removed: February 1, 2015.][added: the financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the "consolidated financial statements").]

We also have audited [removed: lululemon athletica inc. and its subsidiaries'] [added: the Company's] internal control over financial reporting as of January [removed: 29, 2017,] [added: 28, 2018,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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

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

We conducted our audits in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]

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

Our audits [removed: of the consolidated financial statements] [added: also] included [removed: examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing] [added: evaluating] the accounting principles used and significant estimates made by management, as well as evaluating the overall [added: presentation of the] consolidated financial [removed: statement presentation.][added: statements.]

A company's internal control over financial reporting includes those policies and procedures [removed: that:] [added: that] (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of [removed: lululemon athletica inc. and its subsidiaries] [added: the Company] as of January [removed: 29, 2017] [added: 28, 2018] and January [removed: 31, 2016] [added: 29, 2017,] and [removed: the] [added: their] results of [removed: their] operations and their cash flows for [added: each of] the [removed: 52-week] [added: 52 week] periods ended January [added: 28, 2018, January] 29, 2017, [added: and] January 31, [removed: 2016, and February 1, 2015] [added: 2016] in conformity with accounting principles generally accepted in the United States of [removed: America.][added: America (US GAAP).]

[removed: Also,] [added: Also] in our opinion, [removed: lululemon athletica inc. and its subsidiaries] [added: the Company] maintained, in all material respects, effective internal control over financial reporting as of January [removed: 29, 2017,] [added: 28, 2018,] based on criteria established in Internal Control - Integrated Framework (2013) issued by [added: the] COSO.

| | | January [added: 28, 2018 | | | | January] 29, 2017 | | | | January 31, 2016 | | |

| Cash and cash equivalents | | $ | [removed: 734,846] [added: 990,501] | | | $ | [removed: 501,482] [added: 734,846] | |

| Accounts receivable | | [removed: 9,200] [added: 19,173] | | | | [removed: 13,108] [added: 9,200] | | |

| Inventories | | [removed: 298,432] [added: 329,562] | | | | [removed: 284,009] [added: 298,432] | | |

| Prepaid and receivable income taxes | | [removed: 81,190] [added: 48,948] | | | | [removed: 91,453] [added: 81,190] | | |

| Other prepaid expenses and other current assets | | [removed: 39,069] [added: 48,098] | | | | [removed: 26,987] [added: 39,069] | | |

| Property and equipment, net | | [removed: 423,499] [added: 473,642] | | | | [removed: 349,605] [added: 423,499] | | |

| Goodwill and intangible assets, net | | [removed: 24,557] [added: 24,679] | | | | [removed: 24,777] [added: 24,557] | | |

| Deferred income tax assets | | [removed: 26,256] [added: 32,491] | | | | [removed: 11,802] [added: 26,256] | | |

| Other non-current assets | | [removed: 20,492] [added: 31,389] | | | | [removed: 10,854] [added: 20,492] | | |

| Accounts payable | | $ | [removed: 24,846] [added: 24,646] | | | $ | [removed: 10,381] [added: 24,846] | |

| Accrued inventory liabilities | | [removed: 8,601] [added: 13,027] | | | | [removed: 25,451] [added: 8,601] | | |

| Accrued compensation and related expenses | | [removed: 55,238] [added: 70,141] | | | | [removed: 43,524] [added: 55,238] | | |

| [removed: Income] [added: Current income] taxes payable | | [removed: 30,290] [added: 15,700] | | | | [removed: 37,736] [added: 30,290] | | |

| Unredeemed gift card liability | | [removed: 70,454] [added: 82,668] | | | | [removed: 57,736] [added: 70,454] | | |

| Deferred income tax liabilities | | [removed: 7,262] [added: 1,336] | | | | [removed: 10,759] [added: 7,262] | | |

[removed: | Other non-current liabilities | | 48,857 | | | | 50,332 | | |][added: OTHER NON-CURRENT LIABILITIES]

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

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

| Common stock, $0.005 par value: 400,000 shares authorized; [removed: 127,304] [added: 125,650] and [removed: 127,482] [added: 127,304] issued and outstanding | | [removed: 637] [added: 628] | | | | 637 | | |

| Additional paid-in capital | | [removed: 266,622] [added: 284,253] | | | | [removed: 245,533] [added: 266,622] | | |

| Retained earnings | | [removed: 1,294,214] [added: 1,455,002] | | | | [removed: 1,019,515] [added: 1,294,214] | | |

| Accumulated other comprehensive loss | | [removed: (201,500] [added: (142,923] | | ) | | [removed: (238,203] [added: (201,500] | | ) |

Opinions on the Financial Statements and Internal Control over Financial Reporting

Basis for Opinions

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Definition and Limitations of Internal Control over Financial Reporting

| Vancouver, Canada |

| March 26, 2018 |

We have served as the Company's auditor since 2006.

| | | 1,436,282 | | | | 1,162,737 | | |

| | | $ | 1,998,483 | | | $ | 1,657,541 | |

| Lease termination liabilities | | 6,427 | | | | — | | |

| Other current liabilities | | 79,989 | | | | 52,561 | | |

| | | 292,598 | | | | 241,990 | | |

| Non-current income taxes payable | | 48,268 | | | | — | | |

| | | 401,523 | | | | 297,568 | | |

| | | 1,596,960 | | | | 1,359,973 | | |

| | | $ | 1,998,483 | | | $ | 1,657,541 | |

| Asset impairment and restructuring costs | | 38,525 | | | | — | | | | — | | |

| Net income | | | | | | | | | | | | | | | | | | | | | | | 258,662 | | | | | | | | 258,662 | | |

| Repurchase of common stock | | | | | | | | | | | | (1,861 | ) | | (10 | | ) | | (2,377 | | ) | | (97,874 | | ) | | | | | | (100,261 | | ) |

| Balance at January 28, 2018 | | 9,781 | | | 9,781 | | | $ | — | | | 125,650 | | | $ | 628 | | | $ | 284,253 | | | $ | 1,455,002 | | | $ | (142,923 | ) | | $ | 1,596,960 | |

| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | | | | |

| Asset impairment for ivivva restructuring | | 11,593 | | | | — | | | | — | | |

| Settlement of derivatives not designated in a hedging relationship | | 6,227 | | | | — | | | | — | | |

| Other non-current assets | | 9,194 | | | | (8,958 | | ) | | (4,835 | | ) |

| Lease termination liabilities | | 6,427 | | | | — | | | | — | | |

| Non-current income taxes payable | | 48,268 | | | | — | | | | — | | |

| Other accrued and non-current liabilities | | 30,810 | | | | (956 | | ) | | 26,878 | | |

| Net cash provided by operating activities | | 489,337 | | | | 386,392 | | | | 297,538 | | |

| Settlement of net investment hedges | | (7,203 | | ) | | — | | | | — | | |

| Other investing activities | | (8,325 | | ) | | — | | | | — | | |

| Net cash used in financing activities | | (97,862 | | ) | | (26,611 | | ) | | (272,491 | | ) |

| Note 11 | [Fair Value Measurement](#sfc77fe89642942a4bf2e51cc6c21a9d0) | [61](#sfc77fe89642942a4bf2e51cc6c21a9d0) |

| Note 12 | [Derivative Financial Instruments](#s5b65cb392ced46288a607a66c3242a23) | [61](#s5b65cb392ced46288a607a66c3242a23) |

| Note 13 | [Asset Impairment and Restructuring](#saa962cc3b5524aa6aaf03794b81ee4fc) | [63](#saa962cc3b5524aa6aaf03794b81ee4fc) |

| Note 21 | [Subsequent Event](#sf57dde4ac2d44beb8919469e5745db89) | [73](#sf57dde4ac2d44beb8919469e5745db89) |

NOTE 1.

On June 1, 2017, the Company announced a plan to restructure its ivivva operations.

On August 20, 2017, as part of this plan, the Company closed 48 of its 55 ivivva branded company-operated stores.

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

In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

| Vancouver, British Columbia |

| March 28, 2017 |

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

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

| Other accrued liabilities | | 52,020 | | | | 50,676 | | |

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

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

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

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

| Balance at February 2, 2014 | | 29,955 | | | 29,955 | | | $ | — | | | 115,342 | | | $ | 577 | | | $ | 240,351 | | | $ | 923,822 | | | $ | (68,068 | ) | | $ | 1,096,682 | |

| Net income | | | | | | | | | | | | | | | | | | | | | | | 239,033 | | | | | | | | 239,033 | | |

| Common stock issued upon exchange of exchangeable shares | | (20,122 | ) | | (20,122 | ) | | — | | | | 20,122 | | | 101 | | | | (101 | | ) | | | | | | | | | | — | | |

| Tax benefits from stock-based compensation | | | | | | | | | | | | | | | | | | | 413 | | | | | | | | | | | | 413 | | |

| Repurchase of common stock | | | | | | | | | | | | (3,657 | ) | | (18 | | ) | | (5,177 | | ) | | (142,236 | | ) | | | | | | (147,431 | | ) |

| Items not affecting cash | | | | | | | | | | | | |

| Tax benefits from stock-based compensation | | (1,273 | | ) | | 1,202 | | | | (413 | | ) |

| Other accrued liabilities | | 467 | | | | 19,563 | | | | 3,788 | | |

| Other non-current assets and liabilities | | (10,381 | | ) | | 2,480 | | | | 5,004 | | |

| Net cash provided by operating activities | | 385,119 | | | | 298,740 | | | | 314,449 | | |

| Tax benefits from stock-based compensation | | 1,273 | | | | (1,202 | | ) | | 413 | | |

| Net cash used in financing activities | | (25,338 | | ) | | (273,693 | | ) | | (149,077 | | ) |

Cost is determined using weighted-average costs.

For finished goods, market is defined as net realizable value, and for raw materials, market is defined as replacement cost.

The

Currency translation

The aggregate revaluation foreign exchange gains (losses) included in selling, general and administrative expenses amount to $(8.3) million, $12.0 million, and $6.4 million for the years ended January 29, 2017, January 31, 2016, and February 1, 2015, respectively.

The fair value of these financial instruments approximates their carrying value, unless otherwise noted.

The Company is not exposed to significant credit risk on its cash and cash equivalents and accounts receivable.

amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, and expands the related disclosure requirements.

In 2015, the FASB deferred the effective date for this guidance, and in 2016, the FASB issued several updates that clarify the guidance in this topic.

ASC 606 may be adopted either on a full retrospective basis or using a modified retrospective method with a cumulative adjustment to equity.

In June 2014, the FASB amended ASC Topic 718, Compensation - Stock Compensation ("ASC 718") for share-based payments in which the terms of the award provide that a performance target can be achieved after the requisite service period.

The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition.

In April 2015, the FASB amended ASC Subtopic 350-40, Intangibles - Goodwill and Other - Internal-Use Software to provide guidance to customers about whether a cloud computing arrangement includes a software license.

This guidance requires that if a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses.

If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract.

The adoption did not have a material impact on the Company's consolidated financial statements.

This guidance will be effective for the Company beginning in its first quarter of fiscal 2017 and the Company does not expect the adoption to have a material impact on its consolidated financial statements.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial [added: and accounting] officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of the end of the period covered by this report, or the Evaluation Date.

Based upon the evaluation, our principal executive officer and principal financial [added: and accounting] officer concluded that our disclosure controls and procedures were effective as of the Evaluation Date.

Disclosure controls and procedures include controls and procedures designed to reasonably ensure that such information is accumulated and communicated to our management, including our [removed: chief] [added: principal] executive officer and [removed: chief] [added: principal] financial [added: and accounting] officer, as appropriate to allow timely decisions regarding required disclosure.

Management, including our principal executive officer and principal financial [added: and accounting] officer, does not expect that our internal controls will prevent or detect all errors and all fraud.

Based on this evaluation, management concluded that we maintained effective internal control over financial reporting as of January [removed: 29, 2017.][added: 28,]

The effectiveness of our internal control over financial reporting as of January [removed: 29, 2017] [added: 28, 2018] 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: 29, 2017] [added: 28, 2018] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

2018.

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: 2017] [added: 2018] Annual Meeting of Stockholders under the captions "Election of Directors," "Section 16(a) Beneficial Ownership Reporting Compliance," "Executive Officers" and "Corporate Governance."

The information required by this item is incorporated by reference to our [removed: 2017] [added: 2018] Proxy Statement under the captions "Executive Compensation" and "Executive Compensation Tables."

The information required by this item is incorporated by reference to our [removed: 2017] [added: 2018] Proxy Statement under the caption "Principal Stockholders and Stock Ownership by Management."

Equity Compensation Plan Information (as of January [removed: 29, 2017)][added: 28, 2018)]

| (1) | This amount represents the following: (a) [removed: 918,143] [added: 1,117,048] shares subject to outstanding options, (b) [removed: 390,111] [added: 328,660] shares subject to outstanding performance-based restricted stock units, and (c) [removed: 360,250] [added: 426,977] 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: 14,299,075] [added: 13,815,668] shares of our common stock available for future issuance under our 2014 Equity Incentive Plan and (b) [removed: 5,039,806] [added: 4,896,031] shares of our common stock available for future issuance 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 | | 1,872,685 | | | $ | 56.44 | | | 18,711,699 | |

| Total | | 1,872,685 | | | $ | 56.44 | | | 18,711,699 | |

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

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

The information required by this item is incorporated by reference to our [removed: 2017] [added: 2018] 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: 2017] [added: 2018] Proxy Statement under the caption "Fees for Professional Services."

| For the year ended January 31, 2016 | | [removed: (1,324] [added: $] | [added: (1,324] | ) | | [removed: (5,633] [added: $] | [added: (5,633] | ) | | [added: $ |] 6,530 | | | [added: $] | (427 | [removed: |] ) |

| For the year ended January 31, 2016 | | [removed: (3,605] [added: $] | [added: (3,605] | ) | | [removed: (3,139] [added: $] | [added: (3,139] | ) | | [added: $ |] 1,588 | | | [added: $] | (5,156 | [removed: |] ) |

| For the year ended January 31, 2016 | | [removed: (1,068] [added: $] | [added: (1,068] | ) | | [removed: (12,790] [added: $] | [added: (12,790] | ) | | [added: $ |] 12,659 | | | [added: $] | (1,199 | [removed: |] ) |

| For the year ended January 31, 2016 | | [removed: 2,327] [added: $] | [added: (2,327] | [added: )] | | [removed: 2,132] [added: $] | [added: (2,132] | [added: )] | | [removed: —] [added: $] | [added: —] | | | [removed: 4,459] [added: $] | [added: (4,459] | [added: )] |

| For the year ended January 29, 2017 | | [removed: 4,459] [added: (4,459] | | [added: )] | | [removed: 269] [added: (269] | | [added: )] | | — | | | | [removed: 4,728] [added: (4,728] | | [added: )] |

| For the year ended [removed: February 1, 2015] [added: January 31, 2016] | | $ | (91 | ) | | $ | — | | | $ | — | | | $ | (91 | ) |

| For the year ended January [removed: 31, 2016] [added: 28, 2018] | | (91 | | ) | | [removed: —] [added: (1,752] | | [added: )] | | — | | | | [removed: (91] [added: (1,843] | | ) |

| 3.1 | | [removed: Amended] [added: [Amended] and Restated Certificate of Incorporation of lululemon athletica [removed: inc.] [added: inc.](http://www.sec.gov/Archives/edgar/data/1397187/000094523407000526/o37284exv3w1.htm)] | | | | 8-K | | 3.1 | | 001-33608 | | 8/8/2007 |

| 3.2 | | [removed: Certificate] [added: [Certificate] of Amendment to Amended and Restated Certificate of Incorporation of lululemon athletica [removed: inc.] [added: inc.](http://www.sec.gov/Archives/edgar/data/1397187/000095012311063729/c19022exv3w1.htm)] | | | | 8-K | | 3.1 | | 001-33608 | | 7/1/2011 |

| 3.3 | | [removed: Bylaws] [added: [Bylaws] of lululemon athletica [removed: inc.] [added: inc.](http://www.sec.gov/Archives/edgar/data/1397187/000139718715000039/lulu-20150603xex31.htm)] | | | | 8-K | | 3.1 | | 001-33608 | | 6/5/2015 |

| 4.1 | | [removed: Form] [added: [Form] of Specimen Stock Certificate of lululemon athletica [removed: inc.] [added: inc.](http://www.sec.gov/Archives/edgar/data/1397187/000089322007002383/o36921a4exv4w1.htm)] | | | | S-1/A | | 4.1 | | 001-33608 | | 7/9/2007 |

| 10.1* | | [removed: lululemon] [added: [lululemon] athletica inc. 2014 Equity Incentive [removed: Plan] [added: Plan](http://www.sec.gov/Archives/edgar/data/1397187/000139718714000041/lulu-20140611xex101.htm)] | | | | 8-K | | 10.1 | | 001-33608 | | 6/13/2014 |

| 10.2* | | Form of Non-Qualified Stock Option Agreement (for outside directors) | | | | 10-Q | | 10.2 | | [removed: 001-33608] [added: 0001-33608] | | 12/6/2012 |

| 10.3* | | Form of Non-Qualified Stock Option Agreement (with clawback provision) | | | | 10-Q | | 10.1 | | 001-33608 | | [removed: 6/8/2016] [added: 6/1/2017] |

| 10.4* | | Form of Notice of Grant of Performance Shares and Performance Shares Agreement (with clawback provision) | | | | 10-Q | | 10.2 | | 001-33608 | | [removed: 6/8/2016] [added: 6/1/2017] |

| 10.5* | | Form of Notice of Grant of Restricted Stock Units and Restricted Stock Units Agreement (with clawback provision) | | | | 10-Q | | 10.3 | | 001-33608 | | [removed: 6/8/2016] [added: 6/1/2017] |

| 10.6* | | [removed: Form] [added: [Form] of Restricted Stock Award [removed: Agreement] [added: Agreement](http://www.sec.gov/Archives/edgar/data/1397187/000139718714000077/lulu-20141102xex1012.htm)] | | | | 10-Q | | 10.12 | | 001-33608 | | 12/11/2014 |

| 10.7* | | [removed: Amended] [added: [Amended] and Restated LIPO Investments (USA), Inc. Option Plan and form of Award [removed: Agreement] [added: Agreement](http://www.sec.gov/Archives/edgar/data/1397187/000094523407000314/o35800exv10w3.htm)] | | | | S-1 | | 10.3 | | 333-142477 | | 5/1/2007 |

| 10.8 | | [removed: Second] [added: [Second] Amended and Restated Registration Rights Agreement dated June 18, 2015 between lululemon athletica inc. and the parties named [removed: therein] [added: therein](http://www.sec.gov/Archives/edgar/data/1397187/000139718715000060/lulu-20150802xex102.htm)] | | | | 10-Q | | 10.2 | | 001-33608 | | 9/10/2015 |

| 10.9 | | [removed: Exchange] [added: [Exchange] Trust Agreement dated July 26, 2007 between lululemon athletica inc., Lulu Canadian Holding, Inc. and Computershare Trust Company of [removed: Canada] [added: Canada](http://www.sec.gov/Archives/edgar/data/1397187/000094523407000575/o37285exv10w5.htm)] | | | | 10-Q | | 10.5 | | 001-33608 | | 9/10/2007 |

| 10.10 | | [removed: Exchangeable] [added: [Exchangeable] Share Support Agreement dated July 26, 2007 between lululemon athletica inc., Lululemon Callco ULC and Lulu Canadian Holding, [removed: Inc.] [added: Inc.](http://www.sec.gov/Archives/edgar/data/1397187/000094523407000575/o37285exv10w6.htm)] | | | | 10-Q | | 10.6 | | 001-33608 | | 9/10/2007 |