Item 1. FINANCIAL STATEMENTS (UNAUDITED)

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Item 1. FINANCIAL STATEMENTS (UNAUDITED)

lululemon athletica inc.

CONSOLIDATED BALANCE SHEETS

(Unaudited; Amounts in thousands, except per share amounts)


	November 2, 2025		February 2, 2025
ASSETS
Current assets
Cash and cash equivalents	$	1,035,862	$	1,984,336
Accounts receivable, net	250,304		120,173
Inventories	1,997,844		1,442,081
Prepaid and receivable income taxes	430,303		182,253
Prepaid expenses and other current assets	209,348		251,459
	3,923,661		3,980,302
Property and equipment, net	1,952,012		1,780,617
Right-of-use lease assets	1,600,385		1,416,256
Goodwill	175,301		159,518
Intangible assets, net	7,689		11,673
Deferred income tax assets	21,581		17,085
Other non-current assets	274,563		237,841
	$	7,955,192	$	7,603,292
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	352,160	$	271,406
Accrued liabilities and other	621,155		559,463
Accrued compensation and related expenses	186,378		204,543
Current lease liabilities	317,482		275,154
Current income taxes payable	62,712		183,126
Unredeemed gift card liability	253,798		308,352
Other current liabilities	48,494		37,586
	1,842,179		1,839,630
Non-current lease liabilities	1,445,312		1,300,637
Deferred income tax liabilities	111,590		98,188
Other non-current liabilities	54,088		40,790
	3,453,169		3,279,245
Commitments and contingencies
Stockholders' equity
Undesignated preferred stock, $0.01 par value: 5,000 shares authorized; none issued and outstanding	—		—
Exchangeable stock, no par value: 60,000 shares authorized; 5,116 and 5,116 issued and outstanding	—		—
Special voting stock, $0.000005 par value: 60,000 shares authorized; 5,116 and 5,116 issued and outstanding	—		—
Common stock, $0.005 par value: 400,000 shares authorized; 112,789 and 116,166 issued and outstanding	564		581
Additional paid-in capital	646,238		638,190
Retained earnings	4,204,012		4,109,717
Accumulated other comprehensive loss	(348,791)		(424,441)
	4,502,023		4,324,047
	$	7,955,192	$	7,603,292

See accompanying notes to the unaudited interim consolidated financial statements

lululemon athletica inc.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited; Amounts in thousands, except per share amounts)


	Quarter Ended				Three Quarters Ended
	November 2, 2025		October 27, 2024		November 2, 2025		October 27, 2024
Net revenue	$	2,565,920	$	2,396,660	$	7,461,799	$	6,976,629
Cost of goods sold	1,140,004		995,054		3,175,555		2,887,770
Gross profit	1,425,916		1,401,606		4,286,244		4,088,859
Selling, general and administrative expenses	988,254		909,827		2,882,783		2,624,212

Amortization of intangible assets	1,776		1,118		5,136		1,118

Income from operations	435,886		490,661		1,398,325		1,463,529
Other income (expense), net	5,854		13,743		27,377		55,020
Income before income tax expense	441,740		504,404		1,425,702		1,518,549
Income tax expense	134,905		152,534		433,390		452,336
Net income	$	306,835	$	351,870	$	992,312	$	1,066,213

Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	$	(34,543)	$	(22,277)	$	139,936	$	(92,153)
Net investment hedge gains (losses)	16,977		12,292		(64,286)		36,607
Other comprehensive income (loss), net of tax	$	(17,566)	$	(9,985)	$	75,650	$	(55,546)
Comprehensive income	$	289,269	$	341,885	$	1,067,962	$	1,010,667

Basic earnings per share	$	2.59	$	2.87	$	8.30	$	8.57
Diluted earnings per share	$	2.59	$	2.87	$	8.29	$	8.55
Basic weighted-average number of shares outstanding	118,535		122,697		119,589		124,471
Diluted weighted-average number of shares outstanding	118,552		122,803		119,692		124,668

See accompanying notes to the unaudited interim consolidated financial statements

lululemon athletica inc.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited; Amounts in thousands)


	Quarter Ended November 2, 2025
	Exchangeable Stock	Special Voting Stock			Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
	Shares	Shares	Par Value		Shares	Par Value
Balance as of August 3, 2025	5,116	5,116	$	—	113,828	$	570	$	632,375	$	4,085,559	$	(331,225)	$	4,387,279
Net income										306,835				306,835
Other comprehensive income (loss), net of tax												(17,566)		(17,566)

Stock-based compensation expense								16,558						16,558
Common stock issued upon settlement of stock-based compensation					5	—		71						71
Shares withheld related to net share settlement of stock-based compensation					(2)	—		(246)						(246)
Repurchase of common stock, including excise tax					(1,042)	(6)		(2,520)		(188,382)				(190,908)
Balance as of November 2, 2025	5,116	5,116	$	—	112,789	$	564	$	646,238	$	4,204,012	$	(348,791)	$	4,502,023


	Quarter Ended October 27, 2024
	Exchangeable Stock	Special Voting Stock			Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
	Shares	Shares	Par Value		Shares	Par Value
Balance as of July 28, 2024	5,116	5,116	$	—	118,610	$	593	$	589,156	$	3,751,713	$	(309,817)	$	4,031,645
Net income										351,870				351,870
Other comprehensive income (loss), net of tax												(9,985)		(9,985)

Stock-based compensation expense								24,169						24,169
Common stock issued upon settlement of stock-based compensation					15	—		1,514						1,514
Shares withheld related to net share settlement of stock-based compensation					(3)	—		(888)						(888)
Repurchase of common stock, including excise tax					(1,576)	(8)		(3,549)		(409,036)				(412,593)
Balance as of October 27, 2024	5,116	5,116	$	—	117,046	$	585	$	610,402	$	3,694,547	$	(319,802)	$	3,985,732


	Three Quarters Ended November 2, 2025
	Exchangeable Stock	Special Voting Stock			Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
	Shares	Shares	Par Value		Shares	Par Value
Balance as of February 2, 2025	5,116	5,116	$	—	116,166	$	581	$	638,190	$	4,109,717	$	(424,441)	$	4,324,047
Net income										992,312				992,312
Other comprehensive income (loss), net of tax												75,650		75,650

Stock-based compensation expense								37,805						37,805
Common stock issued upon settlement of stock-based compensation					250	—		5,549						5,549
Shares withheld related to net share settlement of stock-based compensation					(94)	—		(26,760)						(26,760)
Repurchase of common stock, including excise tax					(3,533)	(17)		(8,546)		(898,017)				(906,580)
Balance as of November 2, 2025	5,116	5,116	$	—	112,789	$	564	$	646,238	$	4,204,012	$	(348,791)	$	4,502,023


	Three Quarters Ended October 27, 2024
	Exchangeable Stock	Special Voting Stock			Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders' Equity
	Shares	Shares	Par Value		Shares	Par Value
Balance as of January 28, 2024	5,116	5,116	$	—	121,106	$	606	$	575,369	$	3,920,362	$	(264,256)	$	4,232,081
Net income										1,066,213				1,066,213
Other comprehensive income (loss), net of tax												(55,546)		(55,546)

Stock-based compensation expense								71,494						71,494
Common stock issued upon settlement of stock-based compensation					239	—		7,277						7,277
Shares withheld related to net share settlement of stock-based compensation					(90)	—		(34,259)						(34,259)
Repurchase of common stock, including excise tax					(4,209)	(21)		(9,479)		(1,292,028)				(1,301,528)
Balance as of October 27, 2024	5,116	5,116	$	—	117,046	$	585	$	610,402	$	3,694,547	$	(319,802)	$	3,985,732

See accompanying notes to the unaudited interim consolidated financial statements

lululemon athletica inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; Amounts in thousands)


	Three Quarters Ended
	November 2, 2025		October 27, 2024
Cash flows from operating activities
Net income	$	992,312	$	1,066,213
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	361,703		312,931

Stock-based compensation expense	37,805		71,494
Settlement of derivatives not designated in a hedging relationship	(18,077)		(19,645)
Changes in operating assets and liabilities:
Accounts receivable	(127,419)		(19,436)
Inventories	(517,484)		(477,682)
Prepaid and receivable income taxes	(248,050)		(74,915)
Prepaid expenses and other current assets	46,697		(31,499)
Other non-current assets	(41,425)		(60,638)
Accounts payable	72,810		45,579
Accrued liabilities and other	70,108		171,566
Accrued compensation and related expenses	(22,644)		(133,630)
Current and non-current income taxes payable	(126,764)		70,615
Unredeemed gift card liability	(57,270)		(66,623)
Right-of-use lease assets and current and non-current lease liabilities	2,020		16,234
Other current and non-current liabilities	35,284		759
Net cash provided by operating activities	459,606		871,323
Cash flows from investing activities
Purchase of property and equipment	(497,602)		(454,250)
Settlement of net investment hedges	12,282		15,041
Acquisition, net of cash acquired	—		(130,996)
Other investing activities	(3,737)		(5,009)
Net cash used in investing activities	(489,057)		(575,214)
Cash flows from financing activities
Proceeds from settlement of stock-based compensation	5,549		7,277
Taxes paid related to net share settlement of stock-based compensation	(26,760)		(34,259)
Repurchase of common stock	(906,580)		(1,301,528)

Other financing activities	(11,205)		—
Net cash used in financing activities	(938,996)		(1,328,510)
Effect of foreign currency exchange rate changes on cash and cash equivalents	19,973		(23,151)
Decrease in cash and cash equivalents	(948,474)		(1,055,552)
Cash and cash equivalents, beginning of period	$	1,984,336	$	2,243,971
Cash and cash equivalents, end of period	$	1,035,862	$	1,188,419

See accompanying notes to the unaudited interim consolidated financial statements

lululemon athletica inc.

INDEX FOR NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL

STATEMENTS


Note 1	Nature of Operations and Basis of Presentation	9
Note 2	Recent Accounting Pronouncements	9
Note 3	Revolving Credit Facilities	10
Note 4	Supply Chain Financing Program	10
Note 5	Stock-Based Compensation and Benefit Plans	11
Note 6	Fair Value Measurement	12
Note 7	Derivative Financial Instruments	13
Note 8	Earnings Per Share	15
Note 9	Supplementary Financial Information	15
Note 10	Segmented Information	16
Note 11	Disaggregated Net Revenue	19
Note 12	Legal Proceedings and Other Contingencies	19
Note 13	Subsequent Events	20

lululemon athletica inc.

NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL

STATEMENTS

Note 1. Nature of Operations and Basis of Presentation

Nature of operations

lululemon athletica inc., a Delaware corporation, ("lululemon" and, together with its subsidiaries unless the context otherwise requires, the "Company") is engaged in the design, distribution, and retail of technical athletic apparel, footwear, and accessories. The Company organizes its operations into four regional markets: Americas, China Mainland, Asia Pacific ("APAC"), and Europe and the Middle East ("EMEA"). It conducts its business through a number of different channels in each market, including company-operated stores, e-commerce, outlets, temporary locations, wholesale, license and supply arrangements, and a re-commerce program. There were 796 and 767 company-operated stores as of November 2, 2025 and February 2, 2025, respectively.

Basis of presentation

The unaudited interim consolidated financial statements, including the financial position as of November 2, 2025 and the results of operations and cash flows for the periods disclosed, are presented in U.S. dollars and have been prepared by the Company under the rules and regulations of the Securities and Exchange Commission ("SEC"). The financial information is presented in accordance with United States generally accepted accounting principles ("GAAP") for interim financial information and, accordingly, does not include all of the information and footnotes required by GAAP for complete financial statements. The financial information as of February 2, 2025 is derived from the Company's audited consolidated financial statements and related notes for the fiscal year ended February 2, 2025, which are included in Item 8 in the Company's fiscal 2024 Annual Report on Form 10-K filed with the SEC on March 27, 2025. These unaudited interim consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. These unaudited interim consolidated financial statements should be read in conjunction with the Company's consolidated financial statements and related notes included in Item 8 in the Company's fiscal 2024 Annual Report on Form 10-K.

On September 10, 2024, the Company acquired the lululemon branded retail locations and operations run by a third party in Mexico. The Company had previously granted the third party the right to operate retail locations and to sell lululemon products in Mexico. The results of operations, financial position, and cash flows of the Mexico operations have been included in the Company's consolidated financial statements since the date of acquisition.

The Company's fiscal year ends on the Sunday closest to January 31 of the following year, typically resulting in a 52-week year, but occasionally giving rise to an additional week, resulting in a 53-week year. Fiscal 2025 will end on February 1, 2026 and will be a 52-week year. Fiscal 2024 was a 53-week year and ended on February 2, 2025. Fiscal 2025 and fiscal 2024 are referred to as "2025," and "2024," respectively. The first three quarters of 2025 and 2024 ended on November 2, 2025 and October 27, 2024, respectively.

The Company's business is affected by the pattern of seasonality common to most retail apparel businesses. Historically, the Company has recognized a significant portion of its operating profit in the fourth fiscal quarter of each year as a result of increased net revenue during the holiday season.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of net revenue and expenses during the reporting period. Actual results could differ from those estimates.

Note 2. Recent Accounting Pronouncements

The Company considers the applicability and impact of all Accounting Standard Updates ("ASUs"). ASUs recently issued not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on the Company's consolidated financial position or results of operations.

Recently issued accounting pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This disclosure requires expanded disclosure within the rate reconciliation as well as disaggregation of annual taxes paid. This amendment is effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact that this new guidance may have on its financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. Entities will be required to provide disaggregated disclosures for certain income statement expense line items. This amendment is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, and will be applied retrospectively for periods presented in the financial statements. The Company is currently evaluating the impact that this new guidance may have on its financial statement disclosures.

In September 2025, the FASB issued ASU 2025‑06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350‑40): Targeted Improvements to the Accounting for Internal-Use Software. The amendment replaces the previous project-stage model with a principles-based approach for capitalizing internal-use software costs. This guidance is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company is currently evaluating the impact that this new guidance may have on its accounting policies and related disclosures.

Note 3. Revolving Credit Facilities

Americas revolving credit facility

On October 15, 2025, the Company entered into an amended and restated unsecured revolving credit agreement, which provides for $600.0 million in commitments under an unsecured five-year revolving credit facility. The credit facility has a maturity date of October 15, 2030, subject to two one-year extensions at the request of the Company. Subject to the conditions stated in the credit agreement, the Company may request increases in aggregate commitments thereunder up to a total of $1.0 billion. The credit facility permits prepayment of borrowings and reductions or terminations of commitments from time to time without premium or penalty, subject to customary breakage costs.

As of November 2, 2025, the Company had no borrowings outstanding under this credit facility other than $7.0 million in outstanding letters of credit and guarantee.

Borrowings under the credit facility bear interest at variable rates based on the Secured Overnight Financing Rate as administered by the Federal Reserve Bank of New York ("SOFR"), or an alternate base rate, plus applicable margin. The credit agreement contains customary financial, affirmative and negative covenants applicable to the Company and its subsidiaries, including limitations on indebtedness, liens, fundamental changes, dispositions of assets, changes in the nature of business, and restrictions on subsidiary dividends and distributions, as well as financial covenants based on leverage and fixed charge coverage ratios. The Company was in compliance with all such covenants as of November 2, 2025.

China Mainland revolving credit facility

The Company has an uncommitted and unsecured Chinese Yuan-denominated revolving credit facility totaling the equivalent of USD $42.2 million, which is reviewed annually and provides for short-term borrowing and the issuance of guarantees. As of November 2, 2025, there were no borrowings or guarantees outstanding, letters of credit totaling USD $7.8 million were issued, and the Company was in compliance with all applicable terms of the credit facility.

Note 4. Supply Chain Financing Program

The Company facilitates a voluntary supply chain financing ("SCF") program that allows its suppliers to elect to sell the receivables owed to them by the Company to a third party financial institution. Participating suppliers negotiate arrangements directly with the financial institution. If a supplier chooses to participate in the SCF program it may request an invoice be paid earlier than it would by the Company, and the financial institution at its sole and absolute discretion, may elect to make an early payment to the supplier at a discount. The Company’s obligations to its suppliers, including amounts due and scheduled payment terms, are not impacted by a supplier's participation in the arrangement and the Company provides no guarantees to any third parties under the SCF program.

As of November 2, 2025 and February 2, 2025, $46.9 million and $36.3 million, respectively, were outstanding under the SCF program and presented within accounts payable.

Note 5. Stock-Based Compensation and Benefit Plans

Stock-based compensation plans

The Company's eligible employees participate in various stock-based compensation plans, provided directly by the Company.

Stock-based compensation expense charged to income for the plans was $37.4 million and $70.5 million for the first three quarters of 2025 and 2024, respectively. Total unrecognized compensation cost for all stock-based compensation plans was $113.9 million as of November 2, 2025, which is expected to be recognized over a weighted-average period of 2.2 years.

A summary of the balances of the Company's stock-based compensation plans as of November 2, 2025, and changes during the first three quarters of 2025, is presented below:


	Stock Options			Performance-Based Restricted Stock Units			Restricted Shares			Restricted Stock Units
	Number	Weighted-Average Exercise Price		Number	Weighted-Average Grant Date Fair Value		Number	Weighted-Average Grant Date Fair Value		Number	Weighted-Average Grant Date Fair Value
	(In thousands, except per share amounts)
Balance as of February 2, 2025	849	$	314.27	177	$	371.83	5	$	317.86	239	$	371.09
Granted	318	275.26		168	304.07		6	252.28		208	266.34
Exercised/released	44	135.53		100	373.03		5	317.86		101	368.24
Forfeited/expired	69	337.83		12	329.43		—	—		30	328.71
Balance as of November 2, 2025	1,054	$	308.47	233	$	324.76	6	$	252.28	316	$	307.12
Exercisable as of November 2, 2025	496	$	294.21

The Company's performance-based restricted stock units ("PSUs") are awarded to eligible employees and entitle the grantee to receive a maximum of two shares of common stock per PSU if the Company achieves specified performance goals and the grantee remains employed during the vesting period. The fair value of PSUs is based on the closing price of the Company's common stock on the grant date. Expense for PSUs is recognized when it is probable that the performance goal will be achieved.

The grant date fair value of the restricted shares and restricted stock units is based on the closing price of the Company's common stock on the grant date.

The grant date fair value of each stock option granted is estimated on the date of grant using the Black-Scholes model. The closing price of the Company's common stock on the grant date is used in the model. The assumptions used to calculate the fair value of the options granted are evaluated and revised, as necessary, to reflect market conditions and the Company's historical experience. The expected term of the options is based upon the historical experience of similar awards, giving consideration to expectations of future exercise behavior. Expected volatility is based upon the historical volatility of the Company's common stock for the period corresponding with the expected term of the options. The risk-free interest rate is based on the U.S. Treasury yield curve for the period corresponding with the expected term of the options. The following are weighted averages of the assumptions that were used in calculating the fair value of stock options granted during the first three quarters of 2025:


	First Three Quarters
	2025
Expected term	4.00 years
Expected volatility	38.70	%
Risk-free interest rate	4.00	%
Dividend yield	—	%

Employee share purchase plan

The Company has an Employee Share Purchase Plan ("ESPP"). Contributions are made by eligible employees, subject to certain limits defined in the ESPP, and the Company matches one-third of the contribution. The maximum number of shares

authorized to be purchased under the ESPP is 6.0 million shares. All shares purchased under the ESPP are purchased in the open market. During the third quarter of 2025, there were 58.7 thousand shares purchased. As of November 2, 2025, 4.1 million shares remain authorized to be purchased under the ESPP.

Defined contribution pension plans

The Company offers defined contribution pension plans to its eligible employees. Participating employees may elect to defer and contribute a portion of their eligible compensation to a plan up to limits stated in the plan documents, not to exceed the dollar amounts set by applicable laws. The Company matches 50% to 75% of the contribution depending on the participant's length of service, and the contribution is subject to a two-year vesting period. The Company's net expense for the defined contribution plans was $17.8 million and $16.4 million in the first three quarters of 2025 and 2024, respectively.

Note 6. Fair Value Measurement

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are made using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value:

Level 1 - defined as observable inputs such as quoted prices in active markets;
Level 2 - defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and
Level 3 - defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

Assets and liabilities measured at fair value on a recurring basis

The fair value measurement is categorized in its entirety by reference to its lowest level of significant input. As of November 2, 2025 and February 2, 2025, the Company held certain assets and liabilities that are required to be measured at fair value on a recurring basis:


	November 2, 2025		Level 1		Level 2		Level 3		Balance Sheet Classification
	(In thousands)
Money market funds	$	34,795	$	34,795	$	—	$	—	Cash and cash equivalents


Forward currency contract assets	21,800		—		21,800		—		Prepaid expenses and other current assets
Forward currency contract liabilities	21,527		—		21,527		—		Other current liabilities


	February 2, 2025		Level 1		Level 2		Level 3		Balance Sheet Classification
	(In thousands)
Money market funds	$	240,918	$	240,918	$	—	$	—	Cash and cash equivalents

Term deposits	8		—		8		—		Cash and cash equivalents
Forward currency contract assets	76,848		—		76,848		—		Prepaid expenses and other current assets
Forward currency contract liabilities	74,638		—		74,638		—		Other current liabilities

The Company records cash, accounts receivable, accounts payable, and accrued liabilities at cost. The carrying values of these instruments approximate their fair value due to their short-term maturities.

The Company has short-term, highly liquid investments classified as cash equivalents, which are invested in money market funds and short-term deposits with original maturities of three months or less. The Company records cash equivalents at their original purchase prices plus interest that has accrued at the stated rate.

The fair values of the forward currency contract assets and liabilities are determined using observable Level 2 inputs, including foreign currency spot exchange rates, forward pricing curves, and interest rates. The fair values consider the credit risk of the Company and its counterparties. The Company's Master International Swap Dealers Association, Inc., Agreements

and other similar arrangements allow net settlements under certain conditions. However, the Company records all derivatives on its consolidated balance sheets at fair value and does not offset derivative assets and liabilities.

Note 7. Derivative Financial Instruments

Foreign currency exchange risk

The Company is exposed to risks associated with changes in foreign currency exchange rates and uses derivative financial instruments to manage its exposure to certain of these foreign currency exchange rate risks. The Company does not enter into derivative contracts for speculative or trading purposes.

The Company currently hedges against changes in the Canadian dollar and Chinese Yuan to the U.S. dollar exchange rate and changes in the Euro and Australian dollar to the Canadian dollar exchange rate using forward currency contracts.

Net investment hedges

The Company is exposed to foreign currency exchange gains and losses which arise on translation of its international subsidiaries' balance sheets into U.S. dollars. These gains and losses are recorded as other comprehensive income (loss), net of tax in accumulated other comprehensive income or loss within stockholders' equity.

The Company holds a significant portion of its assets in Canada and enters into forward currency contracts designed to hedge a portion of the foreign currency exposure that arises on translation of a Canadian subsidiary into U.S. dollars. These forward currency contracts are designated as net investment hedges. The Company assesses hedge effectiveness based on changes in forward rates. The Company recorded no ineffectiveness from net investment hedges during the first three quarters of 2025.

The Company classifies the cash flows at settlement of its net investment hedges within investing activities in the consolidated statements of cash flows.

Derivatives not designated as hedging instruments

The Company is exposed to gains and losses arising from changes in foreign currency exchange rates associated with transactions which are undertaken by its subsidiaries in currencies other than their functional currency. Such transactions include intercompany transactions and inventory purchases. These transactions result in the recognition of certain foreign currency denominated monetary assets and liabilities which are remeasured to the quarter-end or settlement date foreign currency exchange rate. The resulting foreign currency gains and losses are recorded in selling, general and administrative expenses.

During the first three quarters of 2025, the Company entered into certain forward currency contracts designed to economically hedge the foreign currency exchange revaluation gains and losses that are recognized by its Canadian and Chinese subsidiaries on specific monetary assets and liabilities denominated in currencies other than the functional currency of the entity. The Company has not applied hedge accounting to these instruments and the change in fair value of these derivatives is recorded within selling, general and administrative expenses.

The Company classifies the cash flows at settlement of its forward currency contracts which are not designated in hedging relationships within operating activities in the consolidated statements of cash flows.

Quantitative disclosures about derivative financial instruments

The Company presents its derivative assets and derivative liabilities at their gross fair values within prepaid expenses and other current assets and other current liabilities on the consolidated balance sheets. However, the Company's Master International Swap Dealers Association, Inc., Agreements and other similar arrangements allow net settlements under certain conditions. As of November 2, 2025, there were derivative assets of $21.8 million and derivative liabilities of $21.5 million subject to enforceable netting arrangements.

The notional amounts and fair values of forward currency contracts were as follows:


	November 2, 2025						February 2, 2025
	Gross Notional		Assets		Liabilities		Gross Notional		Assets		Liabilities
	(In thousands)
Derivatives designated as net investment hedges:
Forward currency contracts	$	1,314,000	$	21,350	$	—	$	1,969,000	$	74,908	$	—
Derivatives not designated in a hedging relationship:
Forward currency contracts	1,555,024		450		21,527		2,167,657		1,940		74,638
Net derivatives recognized on consolidated balance sheets:
Forward currency contracts			$	21,800	$	21,527			$	76,848	$	74,638

The forward currency contracts designated as net investment hedges outstanding as of November 2, 2025 mature on different dates between November 2025 and March 2026.

The forward currency contracts not designated in a hedging relationship outstanding as of November 2, 2025 mature on different dates between November 2025 and March 2026.

The pre-tax gains and losses on foreign currency exchange forward contracts recorded in accumulated other comprehensive income or loss were as follows:


	Third Quarter				First Three Quarters
	2025		2024		2025		2024
	(In thousands)
Gains (losses) recognized in net investment hedge gains (losses):
Derivatives designated as net investment hedges	$	22,882	$	16,538	$	(41,276)	$	49,250

No gains or losses have been reclassified from accumulated other comprehensive income or loss into net income for derivative financial instruments in a net investment hedging relationship, as the Company has not sold or liquidated (or substantially liquidated) its hedged subsidiary.

The pre-tax net foreign currency exchange and derivative gains and losses recorded in the consolidated statement of operations were as follows:


	Third Quarter				First Three Quarters
	2025		2024		2025		2024
	(In thousands)
Gains (losses) recognized in selling, general and administrative expenses:
Foreign currency exchange gains (losses)	$	16,955	$	13,423	$	(51,042)	$	44,194
Derivatives not designated in a hedging relationship	(25,762)		(20,260)		33,469		(49,298)
Net foreign currency exchange and derivative gains (losses)	$	(8,807)	$	(6,837)	$	(17,573)	$	(5,104)

Credit risk

The Company is exposed to credit-related losses in the event of nonperformance by the counterparties to the forward currency contracts. The credit risk amount is the Company's unrealized gains on its derivative instruments, based on foreign currency rates at the time of nonperformance.

The Company's forward currency contracts are generally entered into with what the Company believes are investment grade credit worthy and reputable financial institutions that are monitored by the Company for counterparty risk.

The Company's derivative contracts contain certain credit risk-related contingent features. Under certain circumstances, including an event of default, bankruptcy, termination, and cross default under the Company's revolving credit facility, the Company may be required to make immediate payment for outstanding liabilities under its derivative contracts.

Note 8. Earnings Per Share

The details of the computation of basic and diluted earnings per share are as follows:


	Third Quarter				First Three Quarters
	2025		2024		2025		2024
	(In thousands, except per share amounts)
Net income	$	306,835	$	351,870	$	992,312	$	1,066,213
Basic weighted-average number of shares outstanding	$	118,535	$	122,697	$	119,589	$	124,471
Assumed conversion of dilutive stock options and awards	17		106		103		197
Diluted weighted-average number of shares outstanding	118,552		122,803		119,692		124,668
Basic earnings per share	$	2.59	$	2.87	$	8.30	$	8.57
Diluted earnings per share	$	2.59	$	2.87	$	8.29	$	8.55

The Company's calculation of weighted-average shares includes the common stock of the Company as well as the exchangeable shares. Exchangeable shares are the economic equivalent of common shares in all material respects. All classes of stock have, in effect, the same economic rights and share equally in undistributed net income. For the first three quarters of 2025 and 2024, 0.1 million and 0.1 million stock options and awards, respectively, were anti-dilutive to earnings per share and therefore have been excluded from the computation of diluted earnings per share.

On March 23, 2022, the Company's board of directors approved a stock repurchase program authorizing up to $1.0 billion of common shares, which was fully utilized during the first quarter of 2024.

Subsequently, the board of directors approved a new repurchase program authorizing up to $3.0 billion in aggregate, including $1.0 billion initially authorized on November 29, 2023, and additional $1.0 billion increases on May 29, 2024 and December 3, 2024. This program does not have an expiration date or require a minimum number of shares to be repurchased. Repurchases may be made on the open market at prevailing prices or through privately negotiated transactions, including under plans pursuant to Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934. The timing and amount of repurchases will depend on market conditions, trading eligibility, and other factors. As of November 2, 2025, the remaining authorized amount available under the program, excluding commissions and excise taxes, was $0.7 billion.

During the first three quarters of 2025 and 2024, 3.5 million and 4.2 million shares, respectively, were repurchased at a total cost including commissions and excise taxes of $906.6 million and $1.3 billion, respectively.

Subsequent to November 2, 2025, and up to December 5, 2025, 0.6 million shares were repurchased at a total cost including commissions and excise taxes of $103.9 million.

Note 9. Supplementary Financial Information

A summary of certain consolidated balance sheet accounts is as follows:


	November 2, 2025		February 2, 2025
	(In thousands)
Inventories:
Inventories, at cost	$	2,105,155	$	1,526,055
Inventory provisions and reserves	(107,311)		(83,974)
	$	1,997,844	$	1,442,081


	November 2, 2025		February 2, 2025
	(In thousands)
Prepaid expenses and other current assets:
Prepaid expenses	$	155,207	$	147,680
Forward currency contract assets	21,800		76,848
Other current assets	32,341		26,931
	$	209,348	$	251,459
Property and equipment, net:
Land	$	77,202	$	74,461
Buildings	28,301		27,655
Leasehold improvements	1,331,212		1,227,247
Furniture and fixtures	194,570		177,651
Computer hardware	215,891		202,479
Computer software	1,463,531		1,274,322
Equipment and vehicles	58,895		51,453
Work in progress	321,898		206,398
Property and equipment, gross	3,691,500		3,241,666
Accumulated depreciation	(1,739,488)		(1,461,049)
	$	1,952,012	$	1,780,617
Other non-current assets:
Cloud computing arrangement implementation costs	$	182,687	$	161,759
Security deposits	55,660		44,076
Other	36,216		32,006
	$	274,563	$	237,841
Accrued liabilities and other:
Accrued operating expenses	$	209,334	$	166,745
Forward currency contract liabilities	21,527		74,638
Sales return allowances	72,057		73,892
Accrued freight	38,129		53,121
Accrued duty	126,189		45,400
Accrued digital marketing	29,721		45,392
Accrued capital expenditures	28,732		36,690
Accrued rent	22,333		17,962
Sales tax collected	31,921		16,967
Other	41,212		28,656
	$	621,155	$	559,463

Note 10. Segmented Information

The Company's segments are based on the financial information the Chief Operating Decision Maker ("CODM"), who is the Chief Executive Officer, uses to evaluate performance and allocate resources. The CODM approves the annual budget on a segment level, and regularly assesses the performance of the Company's segments using key financial metrics, including net revenue and segmented income from operations.

The Company reports three segments: Americas, China Mainland, and Rest of World, which is comprised of its non-significant operating segments APAC and EMEA reported on a combined basis. The Company does not report capital expenditures and assets by segment as that information is not reviewed by the CODM.


	Third Quarter 2025
	Americas		China Mainland		Rest of World		Total Segments		Corporate(1)		Total
	(In thousands)
Net revenue	$	1,733,382	$	465,362	$	367,176	$	2,565,920	$	—	$	2,565,920
Product costs(2)	583,551		110,484		100,579		794,614		—		794,614
Other cost of sales(2)	167,970		55,702		65,916		289,588		55,802		345,390
Selling, general and administrative expenses	464,373		126,160		115,724		706,257		281,997		988,254
Amortization of intangible assets	—		—		—		—		1,776		1,776
Income from operations	$	517,488	$	173,016	$	84,957	$	775,461	$	(339,575)	$	435,886
Other income (expense), net											5,854
Income before income tax expense											$	441,740

Supplemental information:
Depreciation and amortization(3)	$	58,035	$	9,573	$	9,418	$	77,026	$	50,433	$	127,459


	Third Quarter 2024
	Americas		China Mainland		Rest of World		Total Segments		Corporate(1)		Total
	(In thousands)
Net revenue	$	1,770,382	$	318,338	$	307,940	$	2,396,660	$	—	$	2,396,660
Product costs(2)	518,202		73,164		80,881		672,247		—		672,247
Other cost of sales(2)	159,259		48,555		57,105		264,919		57,888		322,807
Selling, general and administrative expenses	437,982		86,019		101,192		625,193		284,634		909,827
Amortization of intangible assets	—		—		—		—		1,118		1,118
Income from operations	$	654,939	$	110,600	$	68,762	$	834,301	$	(343,640)	$	490,661
Other income (expense), net											13,743
Income before income tax expense											$	504,404

Supplemental information:
Depreciation and amortization(3)	$	51,726	$	8,136	$	8,151	$	68,013	$	45,586	$	113,599


	First Three Quarters 2025
	Americas		China Mainland		Rest of World		Total Segments		Corporate(1)		Total
	(In thousands)
Net revenue	$	5,166,157	$	1,226,361	$	1,069,281	$	7,461,799	$	—	$	7,461,799
Product costs(2)	1,579,844		284,518		299,292		2,163,654		—		2,163,654
Other cost of sales(2)	483,007		157,114		187,587		827,708		184,193		1,011,901
Selling, general and administrative expenses	1,377,093		305,588		343,346		2,026,027		856,756		2,882,783
Amortization of intangible assets	—		—		—		—		5,136		5,136
Income from operations	$	1,726,213	$	479,141	$	239,056	$	2,444,410	$	(1,046,085)	$	1,398,325
Other income (expense), net											27,377
Income before income tax expense											$	1,425,702

Supplemental information:
Depreciation and amortization(3)	$	163,975	$	27,020	$	26,704	$	217,699	$	144,004	$	361,703


	First Three Quarters 2024
	Americas		China Mainland		Rest of World		Total Segments		Corporate(1)		Total
	(In thousands)
Net revenue	$	5,134,079	$	936,313	$	906,237	$	6,976,629	$	—	$	6,976,629
Product costs(2)	1,494,392		213,386		251,815		1,959,593		—		1,959,593
Other cost of sales(2)	456,894		142,147		156,738		755,779		172,398		928,177
Selling, general and administrative expenses	1,293,587		231,317		288,241		1,813,145		811,067		2,624,212
Amortization of intangible assets	—		—		—		—		1,118		1,118
Income from operations	$	1,889,206	$	349,463	$	209,443	$	2,448,112	$	(984,583)	$	1,463,529
Other income (expense), net											55,020
Income before income tax expense											$	1,518,549

Supplemental information:
Depreciation and amortization(3)	$	143,876	$	23,923	$	22,064	$	189,863	$	123,068	$	312,931

(1)Corporate includes centrally managed support functions including product design, raw material development, product innovation, sourcing, supply chain, and global merchandising which are included in other cost of sales. Administrative corporate expenses include technology, brand and marketing, finance, human resources, legal, and other head office costs.

(2)Cost of goods sold is made up of product costs and other cost of sales. Product costs include the cost of purchased merchandise, costs incurred to deliver inventory to the Company's distribution centers, shrink and inventory provision expenses, the cost of digital content subscription services, and hemming costs. Other cost of sales includes occupancy and depreciation expense for company-operated stores, distribution center costs, and product department costs.

(3)The amounts of depreciation and amortization disclosed by reportable segment are included within other cost of sales and selling, general and administrative expenses.

Note 11. Disaggregated Net Revenue

In addition to the disaggregation of net revenue by reportable segment in Note 10. Segmented Information, the following table disaggregates the Company's net revenue by geographic area.

Prior to the acquisition of the Mexico operations on September 10, 2024, wholesale sales to the third party under the license and supply arrangement by lululemon athletica canada inc. were disclosed as net revenue recognized within Canada.


	Third Quarter				First Three Quarters
	2025		2024		2025		2024
	(In thousands)
United States	$	1,380,973	$	1,424,234	$	4,158,499	$	4,186,614
Canada	331,596		335,484		945,709		936,801
Mexico	20,813		10,664		61,949		10,664
Americas	1,733,382		1,770,382		5,166,157		5,134,079

China Mainland	465,362		318,338		1,226,361		936,313
Hong Kong SAR, Taiwan, and Macau SAR	46,463		41,050		138,201		125,349
People's Republic of China	511,825		359,388		1,364,562		1,061,662

Other geographic areas	320,713		266,890		931,080		780,888
	$	2,565,920	$	2,396,660	$	7,461,799	$	6,976,629

The following table disaggregates the Company's net revenue by category. Accessories and other categories is primarily composed of accessories, footwear, and lululemon Studio.


	Third Quarter				First Three Quarters
	2025		2024		2025		2024
	(In thousands)
Women's apparel	$	1,644,952	$	1,555,686	$	4,727,445	$	4,467,048
Men's apparel	596,241		551,430		1,765,627		1,644,653
Accessories and other categories	324,727		289,544		968,727		864,928
	$	2,565,920	$	2,396,660	$	7,461,799	$	6,976,629

The following table disaggregates the Company's net revenue by channel.


	Third Quarter				First Three Quarters
	2025		2024		2025		2024
	(In thousands)
Company-operated stores	$	1,206,558	$	1,210,523	$	3,614,617	$	3,496,661
E-commerce	1,066,750		944,777		3,020,733		2,761,201
Other channels	292,612		241,360		826,449		718,767
	$	2,565,920	$	2,396,660	$	7,461,799	$	6,976,629

Note 12. Legal Proceedings and Other Contingencies

In addition to the legal proceedings described below, the Company is, from time to time, involved in routine legal matters, and audits and inspections by governmental agencies and other third parties which are incidental to the conduct of its business. This includes legal matters such as initiation and defense of proceedings to protect intellectual property rights, employment claims, product liability claims, personal injury claims, and similar matters. The Company believes the ultimate resolution of any such legal proceedings, audits, and inspections is not reasonably likely to have a material adverse effect on its consolidated balance sheets, results of operations or cash flows; however litigation and regulatory matters are inherently uncertain, and it is possible that an adverse outcome in one or more matters could have a material impact in a particular reporting period. The Company has recognized immaterial provisions related to the expected outcome of legal proceedings.

On August 8, 2024, lululemon athletica inc. and certain officers of the Company were named as defendants in a purported securities class action (Patel v. Lululemon Athletica Inc., et al., No. 1:24-cv-06033) in the United States District Court for the Southern District of New York. On March 10, 2025, plaintiffs filed an amended complaint, asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegedly false and misleading public statements and omissions by defendants during the period December 8, 2023 to July 24, 2024 relating to lululemon's business, product offerings, and inventory allocation that plaintiffs allege artificially inflated the Company’s stock price. The amended complaint currently seeks unspecified monetary damages. On May 19, 2025, defendants moved to dismiss the amended complaint. The Company intends to defend the action vigorously.

Since November 4, 2024, six stockholder derivative complaints have been filed in the United States Court for the Southern District of New York: Bhavsar v. McDonald et al., No. 1:24-cv-08405; Muszynski v. McDonald et al., No. 1:24-cv-08507; Holtz v. McDonald et al., No. 1:24-cv-08572; Wong v. McDonald et al., No. 1:24-cv-08752; Kanaly v. McDonald et al., No. 1:24-cv-08839; and Wasserman v. McDonald et al., No. 1:25-cv-02793 (collectively, the "Derivative Actions."). The complaints in the Derivative Actions are generally based on the same allegations alleged in the securities action complaint and assert claims against certain of the Company’s current and former directors and officers for, among other things, alleged breaches of fiduciary duty and violations of Sections 10(b), 14(a), and 20(a) of the Exchange Act. Certain of the Derivative Actions also assert claims based on alleged false and misleading statements during the period October 28, 2020 to April 25, 2024 relating to the Company’s "IDEA" program. The complaints seek, among other things, monetary damages and equitable relief on behalf of the Company, as well as an award of attorneys’ fees and costs. On May 15, 2025, plaintiff in Bhavsar v. McDonald et al. voluntarily dismissed the complaint and that action has been terminated. On August 1, 2025, the Derivative Actions were consolidated for all purposes under the caption In re lululemon athletica inc. Stockholder Derivative Litigation, Master File No. 1:24-cv-08507. The Derivative Actions are stayed pending a ruling on the motion to dismiss the securities class action.

Note 13. Subsequent Events

Subsequent to November 2, 2025, on December 11, 2025, the board of directors of lululemon and Calvin McDonald mutually agreed that Mr. McDonald will step down from his position as Chief Executive Officer, effective January 31, 2026. To support an orderly transition of his responsibilities, Mr. McDonald will continue with lululemon in a senior advisor capacity through March 31, 2026. Mr. McDonald is also stepping down as a member of lululemon's board of directors, effective January 31, 2026.

In connection with these changes, the board of directors appointed Marti Morfitt, currently serving as chair of the board of directors, to serve as executive chair, effective immediately. The board of directors also appointed Meghan Frank, lululemon's chief financial officer, and Andre Maestrini, lululemon's president and chief commercial officer, to serve as interim co-Chief Executive Officers, effective January 31, 2026, while lululemon conducts a search for a permanent CEO.

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