lululemon athletica 10-Q 2026-05-03

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 3, 2026

or

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-33608

lululemon athletica inc.

(Exact name of registrant as specified in its charter)

Delaware			20-3842867
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

1818 Cornwall Avenue, Vancouver, British Columbia V6J 1C7

(Address of principal executive offices)

Registrant's telephone number, including area code:

604-732-6124

Former name, former address and former fiscal year, if changed since last report:

N/A

Securities registered pursuant to Section 12(b) of the Act:

Title of each class						Trading symbol(s)						Name of each exchange on which registered
Common Stock, par value $0.005 per share						LULU						Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer			☑			Accelerated filer			☐
Non-accelerated filer			☐			Smaller reporting company			☐
Emerging growth company			☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of May 29, 2026, there were 108,437,957 shares of the registrant's common stock, par value $0.005 per share, outstanding.

Exchangeable and Special Voting Shares:

As of May 29, 2026, (1) there were outstanding 5,115,961 exchangeable shares of Lulu Canadian Holding, Inc., a wholly-owned subsidiary of the registrant. Exchangeable shares are exchangeable for an equal number of shares of the registrant's common stock; (2) there were outstanding 5,115,961 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. The special voting stock and the registrant's common stock generally vote together as a single class on all matters on which the common stock is entitled to vote.

TABLE OF CONTENTS

						Page
PART I. FINANCIAL INFORMATION
Item 1.			Financial Statements (Unaudited):			3
			Consolidated Balance Sheets			3
			Consolidated Statements of Operations and Comprehensive Income			4
			Consolidated Statements of Stockholders' Equity			5
			Consolidated Statements of Cash Flows			6
			Index for Notes to the Unaudited Interim Consolidated Financial Statements			7
Item 2.			Management's Discussion and Analysis of Financial Condition and Results of Operations			17
Item 3.			Quantitative and Qualitative Disclosures About Market Risk			29
Item 4.			Controls and Procedures			30
PART II. OTHER INFORMATION
Item 1.			Legal Proceedings			31
Item 1A.			Risk Factors			31
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			44
Item 5.			Other Information			44
Item 6.			Exhibits			45
Signatures						46

PART I

FINANCIAL INFORMATION

lululemon athletica inc.

CONSOLIDATED BALANCE SHEETS

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

						May 3, 2026						February 1, 2026
ASSETS
Current assets
Cash and cash equivalents						$	1,514,729					$	1,807,202
Accounts receivable, net						164,973						190,657
Inventories						1,687,088						1,700,753
Prepaid and receivable income taxes						422,167						352,469
Prepaid expenses and other current assets						205,618						211,620
						3,994,575						4,262,701
Property and equipment, net						2,045,719						2,033,720
Right-of-use lease assets						1,948,704						1,630,181
Goodwill						184,958						184,911
Intangible assets, net						4,399						6,283
Deferred income tax assets						24,778						24,037
Other non-current assets						328,308						314,910
						$	8,531,441					$	8,456,743
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable						$	294,323					$	331,421
Accrued liabilities and other						586,317						662,982
Accrued compensation and related expenses						172,395						187,887
Current lease liabilities						357,204						298,724
Current income taxes payable						50,130						43,948
Unredeemed gift card liability						296,361						316,632
Other current liabilities						37,586						45,954
						1,794,316						1,887,548
Non-current lease liabilities						1,778,804						1,499,717
Deferred income tax liabilities						75,251						52,278
Other non-current liabilities						57,469						55,360
						3,705,840						3,494,903
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; 109,308 and 111,380 issued and outstanding						547						557
Additional paid-in capital						681,152						669,392
Retained earnings						4,361,290						4,522,581
Accumulated other comprehensive loss						(217,388)						(230,690)
						4,825,601						4,961,840
						$	8,531,441					$	8,456,743

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
						May 3, 2026						May 4, 2025
Net revenue						$	2,471,603					$	2,370,660
Cost of goods sold						1,132,785						987,534
Gross profit						1,338,818						1,383,126
Selling, general and administrative expenses						1,059,988						942,871
Amortization of intangible assets						1,884						1,630
Income from operations						276,946						438,625
Other income (expense), net						9,131						11,786
Income before income tax expense						286,077						450,411
Income tax expense						91,029						135,839
Net income						$	195,048					$	314,572
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment						$	11,987					$	169,772
Net investment hedge gains (losses)						1,315						(82,053)
Other comprehensive income (loss), net of tax						$	13,302					$	87,719
Comprehensive income						$	208,350					$	402,291
Basic earnings per share						$	1.69					$	2.61
Diluted earnings per share						$	1.69					$	2.60
Basic weighted-average number of shares outstanding						115,414						120,632
Diluted weighted-average number of shares outstanding						115,482						120,843

See accompanying notes to the unaudited interim consolidated financial statements

lululemon athletica inc.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited; Amounts in thousands)

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This Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with the unaudited interim consolidated financial statements and related notes in Item 1 of this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements and MD&A in our Annual Report on Form 10-K for fiscal 2025.

This Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about our financial condition, results of operations, business strategies, growth opportunities, market trends, and future performance. Forward-looking statements can often be identified by words such as "may," "will," "expects," "plans," "anticipates," "believes," "estimates," "intends," and similar expressions.

These forward-looking statements are based on our current expectations and assumptions, are subject to risks and uncertainties, and may differ materially from actual results due to various factors, including those described under "Risk Factors" and elsewhere in this report. We undertake no obligation to update any forward-looking statements, except as required by applicable law.

Our 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 2026 will end on January 31, 2027 and will be a 52-week year. Fiscal 2025 was a 52-week year and ended on February 1, 2026. Fiscal 2026 and fiscal 2025 are referred to as "2026," and "2025," respectively. The first quarter of 2026 and 2025 ended on May 3, 2026 and May 4, 2025, respectively.

Components of this MD&A include:

• Overview

• Financial Highlights and Market Conditions and Trends

• Quarter-to-Date Results of Operations

• Comparable Sales

• Non-GAAP Financial Measures

• Seasonality

• Liquidity and Capital Resources

• Critical Accounting Policies and Estimates

• Operating Locations

We use comparable sales as a metric to evaluate the performance of our business. Refer to the Comparable Sales section of this MD&A for further information.

We provide constant dollar changes, which is a non-GAAP financial measure, as supplemental information to help investors understand the underlying growth rate of net revenue excluding the impact of changes in foreign currency exchange rates. Refer to the Non-GAAP Financial Measures section of this MD&A for reconciliations between the non-GAAP financial measures and the most directly comparable measures calculated in accordance with GAAP.

We disclose material non-public information through one or more of the following channels: our investor relations website (http://corporate.lululemon.com/investors), the social media channels identified on our investor relations website, press releases, SEC filings, public conference calls, and webcasts. Information contained on or accessible through our websites is not incorporated into, and does not form a part of, this quarterly report or any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.

Overview

lululemon athletica inc. is principally a designer, distributor, and retailer of technical athletic apparel, footwear, and accessories. Our vision is to create transformative products and experiences that build meaningful connections, unlocking greater possibility and wellbeing for all. 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, acting with courage, valuing connection and inclusion, and choosing to have fun. These core values attract passionate and motivated employees who are driven to achieve personal and professional goals, and share our purpose "to elevate human potential by helping people feel their best."

We offer a comprehensive line of technical athletic apparel, footwear, and accessories marketed under the lululemon brand which includes:

• Pants, shorts, tops, and jackets designed for a healthy lifestyle including athletic activities such as yoga, running, training, and most other activities;

• Apparel designed for being on the move; and

• Fitness-inspired accessories.

Financial Highlights

The summary below compares the first quarter of 2026 to the first quarter of 2025:

• Net revenue increased 4% to $2.5 billion. On a constant dollar basis, net revenue increased 2%.

• Comparable sales increased 1%, or decreased 2% on a constant dollar basis.

–Americas comparable sales decreased 5%, or 6% on a constant dollar basis.

–China Mainland comparable sales increased 20%, or 13% on a constant dollar basis.

–Rest of World comparable sales increased 5%, or 1% on a constant dollar basis.

• Gross profit decreased 3% to $1.3 billion.

• Gross margin decreased 410 basis points to 54.2%.

• Income from operations decreased 37% to $276.9 million.

• Operating margin decreased 730 basis points to 11.2%.

• Income tax expense decreased 33% to $91.0 million. Our effective tax rate for the first quarter of 2026 was 31.8% compared to 30.2% for the first quarter of 2025.

• Diluted earnings per share were $1.69 compared to $2.60 in the first quarter of 2025.

Market Conditions and Trends

Net revenue in the Americas decreased 3%, and comparable sales in the Americas decreased 5%. We experienced lower conversion rates, reduced store traffic, and a decrease in average order value in the Americas. We also experienced a decrease in product margin in the Americas segment of 500 basis points, primarily reflective of the impact of higher tariffs. We have initiated an action plan to drive sustainable net revenue growth in the Americas, structured around three strategic pillars: product creation, product activation, and enterprise enablement. This includes a plan to increase the reliance of full price selling to drive sustainable revenue growth.

Net revenue in China Mainland and Rest of World increased 30% and 13%, respectively, and comparable sales increased 20% and 5%, respectively. We experienced increased traffic in these markets which led to higher comparable sales. We opened 19 net new stores in China Mainland and 13 net new stores in Rest of World which contributed to the respective increases in net revenue.

Across all markets, our business continues to be influenced by macroeconomic conditions, including trade policies, shifting consumer demand and sentiment, foreign currency fluctuations, and geopolitical instability. These factors have had varying effects across our markets and are expected to continue to impact our business throughout the remainder of 2026 and beyond.

Import Tariffs

During 2025, the United States implemented a series of trade-related policies, including removing the de minimis exemption for low-value shipments imported into the United States, and implementing higher tariffs under different statutes, including under the International Emergency Economic Power Act ("IEEPA"). These changes in the tariff landscape, including the de minimis exemption removal, had a significant adverse effect on our business and results of operations in 2025, which continues in 2026.

On February 20, 2026, the U.S. Supreme Court invalidated tariffs imposed under the IEEPA. Immediately following this IEEPA decision, the U.S. Administration initiated new tariffs at different rates under alternative legislative powers. The U.S. Administration also confirmed that the IEEPA decision does not impact the removal of the de minimis exemption. We paid $230 million of tariffs under the IEEPA and have commenced submitting refund claims for eligible IEEPA tariffs paid, including associated interest. The ultimate amounts that we may recover remain uncertain and as of May 3, 2026, we have not recognized an asset in relation to IEEPA refund claims.

There remains significant uncertainty regarding the duration and scope of newly initiated tariffs and whether the United States will pursue additional trade actions or impose further tariffs, or currently enforced tariffs may be invalidated through legal challenges.

Because this is an evolving area, future developments may change our expectations materially. For additional information on related risks, please see “Risk Factors” in this report.

Other Factors Affecting Our Business

Foreign currency fluctuations positively impacted our financial results during the first quarter of 2026, increasing net revenue growth by $52.2 million compared to the first quarter of 2025. We expect ongoing exchange rate volatility to continue to affect our financial results.

Quarter-to-Date Results of Operations: First Quarter Results

The following table summarizes key components of our results of operations for the periods indicated:

						First Quarter
						2026						2025						2026						2025
						(In thousands)												(Percentage of net revenue)
Net revenue						$	2,471,603					$	2,370,660					100.0		%				100.0		%
Cost of goods sold						1,132,785						987,534						45.8						41.7
Gross profit						1,338,818						1,383,126						54.2						58.3
Selling, general and administrative expenses						1,059,988						942,871						42.9						39.8
Amortization of intangible assets						1,884						1,630						0.1						0.1
Income from operations						276,946						438,625						11.2						18.5
Other income (expense), net						9,131						11,786						0.4						0.5
Income before income tax expense						286,077						450,411						11.6						19.0
Income tax expense						91,029						135,839						3.7						5.7
Net income						$	195,048					$	314,572					7.9		%				13.3		%

Net Revenue

						First Quarter
						2026						2025						2026						2025						Year over year change
						(In thousands)												(Percentage of net revenue)												(In thousands)						(Percentage)						(Constant dollar change)
Americas						$	1,621,210					$	1,674,558					65.6		%				70.6		%				$	(53,348)					(3)		%				(4)		%
China Mainland						478,395						368,101						19.4						15.5						110,294						30		%				23		%
Rest of World						371,998						328,001						15.1						13.8						43,997						13		%				9		%
Net revenue						$	2,471,603					$	2,370,660					100.0		%				100.0		%				$	100,943					4		%				2		%

The increase in net revenue was primarily due to increased China Mainland and Rest of World net revenue, partially offset by decreased Americas net revenue. Global comparable sales increased 1%, or decreased 2% on a constant dollar basis, primarily due to lower conversion rates as well as a decrease in average order value, partially offset by higher traffic.

Gross Margin

						First Quarter
						2026						2025						Year over year change
						(In thousands)												(In thousands)						(Percentage)
Gross profit						$	1,338,818					$	1,383,126					$	(44,308)					(3.2)		%
Gross margin						54.2		%				58.3		%				(410) basis points

The decrease in gross margin was primarily due to:

• a net decrease in product margin of 270 basis points, comprised of:

–a net decrease of 330 basis points primarily from higher tariffs as well as markdowns including credit card affiliate programs and higher inventory provisions, partially offset by higher pricing and lower product costs; and

–a favorable impact of foreign currency exchange rates of 60 basis points.

• a net increase in other cost of sales as a percentage of net revenue of 140 basis points, comprised of:

–an increase in occupancy and depreciation costs of 130 basis points, primarily driven by new and expanded company-operated stores as well as increased penetration in China Mainland and Rest of World; and

–an increase in costs related to our distribution centers and product departments of 10 basis points.

Selling, General and Administrative Expenses

						First Quarter
						2026						2025						Year over year change
						(In thousands)												(In thousands)						(Percentage)
Selling, general and administrative expenses						$	1,059,988					$	942,871					$	117,117					12.4		%
Selling, general and administrative expenses as a % of net revenue						42.9		%				39.8		%				310 basis points

The increase in selling, general and administrative expenses was primarily due to:

• a net increase in head office costs of $63.1 million, comprised of:

–an increase in employee costs of $29.6 million primarily due to increased salaries and wages expense, primarily as a result of increased wage rates;

*–*an increase in brand and community expenses of $22.5 million;

–an increase in technology costs, including cloud computing amortization, of $6.5 million;

–an increase in depreciation of $4.5 million;

–a net increase in contractor, advisory, and professional services of $1.1 million, which includes costs associated with proxy contest matters of $11.4 million in 2026, partially offset by lower other advisory and professional fees; and

–a decrease in other head office costs of $1.1 million.

• an increase in costs related to our operating channels of $56.4 million, comprised of:

–an increase in employee costs of $31.2 million primarily due to increased salaries and wages expense for retail employees;

–an increase in variable costs of $14.3 million primarily due to increased distribution costs;

–an increase in digital marketing expenses of $3.5 million;

–an increase in technology costs of $2.9 million; and

–an increase in other operating costs of $4.5 million.

The increase in selling, general and administrative expenses was partially offset by a decrease in net foreign currency exchange and derivative revaluation losses of $2.4 million.

Selling, general and administrative expenses as a percentage of net revenue increased 310 basis points, primarily due to an increase in head office costs of 180 basis points and an increase in costs related to our operating channels of 140 basis points.

Segment Results

On a segment basis, we determine income from operations without taking into account corporate expenses. Corporate expenses include the cost of 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.

Americas

						First Quarter
						2026						2025						Year over year change
						(In thousands)												(In thousands)						(Percentage)
Net revenue						$	1,621,210					$	1,674,558					$	(53,348)					(3.2)		%
Product costs						545,559						480,820						64,739						13.5
Other cost of sales						183,972						156,647						27,325						17.4
Gross profit						891,679						1,037,091						(145,412)						(14.0)
Selling, general and administrative expenses						483,199						447,760						35,439						7.9
Segmented income from operations						$	408,480					$	589,331					$	(180,851)					(30.7)		%
Product margin						66.3		%				71.3		%				(500) basis points
Gross margin						55.0		%				61.9		%				(690) basis points
Selling, general and administrative expenses as a % of net revenue						29.8		%				26.7		%				310 basis points
Segmented income from operations as a % of net revenue						25.2		%				35.2		%				(1000) basis points

The decrease in net revenue was primarily due to a decrease in comparable sales, which decreased 5%, or 6% on a constant dollar basis. The decrease in comparable sales was primarily a result of lower conversion rates, reduced store traffic, and a decrease in average order value, partially offset by higher e-commerce traffic. The decrease in comparable sales was partially offset by a $15.8 million increase from new or expanded company-operated stores and our other channels. We have opened 14 net new company-operated stores in the Americas since the first quarter of 2025.

The decrease in gross margin was primarily due to lower product margin driven mainly by higher tariffs, as well as higher depreciation, occupancy costs, and distribution center costs as a percentage of net revenue.

The increase in selling, general and administrative expenses was primarily due to higher marketing expenses, employee costs, and variable costs.

China Mainland

						First Quarter
						2026						2025						Year over year change
						(In thousands)												(In thousands)						(Percentage)
Net revenue						$	478,395					$	368,101					$	110,294					30.0		%
Product costs						100,558						81,815						18,743						22.9
Other cost of sales						63,556						50,273						13,283						26.4
Gross profit						314,281						236,013						78,268						33.2
Selling, general and administrative expenses						111,212						82,378						28,834						35.0
Segmented income from operations						$	203,069					$	153,635					$	49,434					32.2		%
Product margin						79.0		%				77.8		%				120 basis points
Gross margin						65.7		%				64.1		%				160 basis points
Selling, general and administrative expenses as a % of net revenue						23.2		%				22.4		%				80 basis points
Segmented income from operations as a % of net revenue						42.4		%				41.7		%				70 basis points

The increase in net revenue was primarily due to an increase in comparable sales, which increased 20%, or 13% on a constant dollar basis. The increase in comparable sales was primarily a result of increased traffic partially offset by lower conversion rates. The increase in China Mainland net revenue was also driven by a $45.2 million increase in net revenue from new or expanded company-operated stores and our other channels. We have opened 19 net new company-operated stores in China Mainland since the first quarter of 2025.

The increase in gross margin was primarily due to a higher product margin driven mainly by a favorable impact of foreign currency exchange rates, as well as lower distribution center costs as a percentage of net revenue.

The increase in selling, general and administrative expenses was primarily due to higher employee costs as well as higher technology costs.

Rest of World

						First Quarter
						2026						2025						Year over year change
						(In thousands)												(In thousands)						(Percentage)
Net revenue						$	371,998					$	328,001					$	43,997					13.4		%
Product costs						100,328						90,264						10,064						11.1
Other cost of sales						72,009						58,471						13,538						23.2
Gross profit						199,661						179,266						20,395						11.4
Selling, general and administrative expenses						130,238						106,410						23,828						22.4
Segmented income from operations						$	69,423					$	72,856					$	(3,433)					(4.7)		%
Product margin						73.0		%				72.5		%				50 basis points
Gross margin						53.7		%				54.7		%				(100) basis points
Selling, general and administrative expenses as a % of net revenue						35.0		%				32.4		%				260 basis points
Segmented income from operations as a % of net revenue						18.7		%				22.2		%				(350) basis points

The increase in net revenue was primarily due to a $29.4 million increase in net revenue from new or expanded company-operated stores and our other channels. We have opened 13 net new company-operated stores in Rest of World since the first quarter of 2025. The increase in Rest of World net revenue was also driven by an increase in comparable sales, which increased 5%, or 1% on a constant dollar basis. The increase in comparable sales was primarily a result of increased traffic, partially offset by lower conversion rates.

The decrease in gross margin was primarily due to higher occupancy costs as a percentage of net revenue, partially offset by higher product margin driven by a favorable impact of foreign currency exchange rates.

The increase in selling, general and administrative expenses was primarily due to higher employee costs as well as higher marketing expenses.

Corporate

Corporate expenses increased $26.8 million to $404.0 million in the first quarter of 2026 compared to the first quarter of 2025. The net increase was primarily due to higher employee costs, as well as higher technology costs and depreciation. The increase in corporate expenses was partially offset by lower professional fees and a decrease in net foreign currency exchange and derivative losses of $2.4 million.

Other Income (Expense), Net

						First Quarter
						2026						2025						Year over year change
						(In thousands)												(In thousands)						(Percentage)
Other income (expense), net						$	9,131					$	11,786					$	(2,655)					(22.5)		%

The decrease in other income, net was primarily due to a decrease in interest income as a result of lower average cash balances and lower interest rates.

Income Tax Expense

						First Quarter
						2026						2025						Year over year change
						(In thousands)												(In thousands)						(Percentage)
Income tax expense						$	91,029					$	135,839					$	(44,810)					(33.0)		%
Effective tax rate						31.8		%				30.2		%				160 basis points

The increase in the effective tax rate was primarily due to a decrease in tax benefits related to stock-based compensation.

Net Income

						First Quarter
						2026						2025						Year over year change
						(In thousands)												(In thousands)						(Percentage)
Net income						$	195,048					$	314,572					$	(119,524)					(38.0)		%

The decrease in net income was primarily due to an increase in selling, general and administrative expenses of $117.1 million, a decrease in gross profit of $44.3 million, and a decrease in other income (expense), net of $2.7 million, partially offset by a decrease in income tax expense of $44.8 million.

Comparable Sales

We use comparable sales to evaluate the performance of our company-operated store and e-commerce businesses from an omni-channel perspective. It allows us to monitor the performance of our business without the impact of recently opened or expanded stores. We believe investors would similarly find these metrics useful in assessing the performance of our business. The comparable sales measures we report may not be equivalent to similarly titled measures reported by other companies.

Comparable sales includes comparable company-operated store and all e-commerce net revenue. E-commerce net revenue includes buy online pick up in store, back-back room, and ship from store net revenue in addition to our websites, other region-specific websites, third-party online marketplaces, and mobile apps. Our back-back room capability allows our store educators to access inventory located at our other locations and have product shipped directly to a guest's address or a store. Comparable company-operated stores have been open, or open after being significantly expanded, for at least 12 full fiscal months. Net revenue from a company-operated store is included in comparable sales beginning with the month for which the store has a full fiscal month of sales in the prior year. Comparable sales excludes sales from new stores that have not been open for at least 12 full fiscal months, from stores which have not been in their significantly expanded space for at least 12 full fiscal months, from stores which have been temporarily relocated for renovations or temporarily closed, and sales from company-operated stores that have closed. Comparable sales also excludes sales from our selling channels other than company-operated stores and e-commerce.

In fiscal years with 53 weeks, the 53rd week of net revenue is excluded from the calculation of comparable sales. In the year following a 53-week year, the prior year period is shifted by one week to compare similar calendar weeks.

Non-GAAP Financial Measures

We report certain financial metrics on a constant dollar basis, which is a non-GAAP financial measure.

A constant dollar basis assumes the average foreign currency exchange rates for the period remained constant with the average foreign currency exchange rates for the same period of the prior year. We use constant dollar metrics to facilitate comparison of underlying performance excluding the impact of changes in foreign currency exchange rates. Management uses these constant currency metrics internally when reviewing and assessing financial performance.

These non-GAAP financial measures are provided in addition to, and not a substitute for, the corresponding financial measures calculated in accordance with GAAP. A reconciliation of the non-GAAP financial measures follows, which includes more detail on the GAAP financial measure that is most directly comparable to each non-GAAP financial measure, and the related reconciliations between these financial measures. Our non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures reported by other companies.

Constant Dollar Changes

The below changes show the change compared to the corresponding period in the prior year.

						First Quarter 2026
						Change						Foreign exchange changes						Change in constant dollars
Net Revenue
Americas						(3)		%				(1)		%				(4)		%
China Mainland						30						(7)						23
Rest of World						13						(4)						9
Total net revenue						4		%				(2)		%				2		%
Comparable sales(1)
Americas						(5)		%				(1)		%				(6)		%
China Mainland						20						(7)						13
Rest of World						5						(4)						1
Total comparable sales						1		%				(3)		%				(2)		%

---

(1)Comparable sales includes comparable company-operated store and e-commerce net revenue.

Seasonality

Our business is affected by the general seasonal trends common to the retail apparel industry. Net revenue is typically higher during our fourth fiscal quarter, reflecting our historical strength in sales during the holiday season in the Americas, while our operating expenses are generally more equally distributed throughout the year. As a result, a substantial portion of our operating profits are typically generated in the fourth quarter of our fiscal year. For example, we generated approximately 37% of our full year operating profit during the fourth quarter of 2025. Events predominantly impacting our international net revenue, such as those related to Lunar New Year and Singles Day, can fall in different fiscal quarters from year to year.

Liquidity and Capital Resources

Our primary sources of liquidity are our current balances of cash and cash equivalents, cash flows from operations, and capacity under our committed revolving credit facility, including to fund short-term working capital requirements. Our primary cash needs are capital expenditures for opening new stores and remodeling or relocating existing stores, investing in our distribution centers, investing in technology and making system enhancements, funding working capital requirements, and making other strategic capital investments. We may also use cash to repurchase shares of our common stock. Cash and cash equivalents in excess of our needs are held in interest-bearing accounts with financial institutions, as well as in money market funds and term deposits.

The following table summarizes our net cash flows provided by and used in operating, investing, and financing activities for the periods indicated:

						First Quarter
						2026						2025						Year over year change
						(In thousands)
Total cash provided by (used in):
Operating activities						$	214,440					$	(118,954)					$	333,394
Investing activities						(138,850)						(106,842)						(32,008)
Financing activities						(378,525)						(467,974)						89,449
Effect of foreign currency exchange rate changes on cash and cash equivalents						10,462						34,706						(24,244)
Decrease in cash and cash equivalents						$	(292,473)					$	(659,064)					$	366,591

Operating Activities

Net income decreased $119.5 million. The increase in cash provided by operating activities was primarily due to an increase in cash flows from changes in operating assets and liabilities of $375.4 million, primarily driven by changes in inventories and the timing of income tax payments, as well as changes in accrued compensation and accounts receivable, partially offset by the timing of accounts payable and changes in accrued liabilities. The increase in cash provided by operating activities was also a result of higher cash inflows related to derivatives.

Investing Activities

The increase in cash used in investing activities was primarily due to the settlement of net investment hedges, partially offset by decreased capital expenditures. The decrease in capital expenditures was primarily due to decreased investment in supply chain infrastructure and e-commerce related technology system capital expenditures, partially offset by an increase in capital expenditures for opening, remodeling, and relocating company-operated stores, primarily in the Americas.

Financing Activities

The decrease in cash used in financing activities was primarily the result of a decrease in cash paid for our stock repurchases. During the first quarter of 2026, we repurchased 2.2 million shares at a total cost including commissions and excise taxes of $361.8 million. During the first quarter of 2025, we repurchased 1.4 million shares at a total cost including commissions and excise taxes of $434.4 million. The common stock was repurchased in the open market at prevailing market prices, including under 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 shares repurchased depending upon market conditions, eligibility to trade, and other factors.

Liquidity Outlook

We believe our cash and cash equivalent balances, cash generated from operations, and borrowings available to us under our committed revolving credit facility will be adequate to meet our liquidity needs and capital expenditure requirements for at least the next 12 months. Our ability to access borrowings under the credit facility depends on our ongoing compliance with the covenants in the credit agreement, and a failure to maintain such compliance could adversely affect our liquidity. Our cash from operations may be negatively impacted by a decrease in demand for our products as well as the other factors described in "Item 1A. Risk Factors". In addition, we may make discretionary capital improvements with respect to our stores, distribution facilities, headquarters, or systems, or we may repurchase shares under an approved stock repurchase program, which we would expect to fund through the use of cash, issuance of debt or equity securities or other external financing sources to the extent we were unable to fund such expenditures out of our cash and cash equivalents and cash generated from operations.

The following table includes certain measures of our liquidity:

						May 3, 2026
						(In thousands)
Cash and cash equivalents						$	1,514,729
Working capital excluding cash and cash equivalents(1)						685,530
Capacity under committed revolving credit facility						593,623

---

(1)Working capital excluding cash and cash equivalents is calculated as current assets of $4.0 billion less cash and cash equivalents of $1.5 billion and current liabilities of $1.8 billion.

We enter into standby letters of credit and guarantee to secure certain of our obligations, including leases, taxes, and duties. As of May 3, 2026, letters of credit and guarantee totaling $20.2 million had been issued, including $6.4 million under our committed revolving credit facility.

Our existing Americas credit facility 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. As of May 3, 2026, no borrowings were outstanding under this facility other than letters of credit and guarantee of $6.4 million. Further information regarding our credit facilities and associated covenants is outlined in Note 4. Revolving Credit Facilities included in Item 1 of Part I of this report.

The timing and cost of our inventory purchases will vary depending on a variety of factors such as revenue growth, assortment and purchasing decisions, product costs including freight and duty, and the availability of production capacity and speed. Our inventory balance as of May 3, 2026 was $1.7 billion, an increase of 2% from May 4, 2025.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions. Predicting future events is inherently an imprecise activity and, as such, requires the use of significant judgment. Actual results may vary from our estimates in amounts that may be material to the financial statements. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact our consolidated financial statements. Management has reviewed these critical accounting policies and estimates and discussed them with the audit committee.

Our critical accounting policies, estimates, and judgments are discussed within "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our 2025 Annual Report on Form 10-K filed with the SEC on March 17, 2026.

Operating Locations

Our company-operated stores by market as of May 3, 2026 and February 1, 2026 are summarized in the table below.

Number of company-operated stores by market						May 3, 2026						February 1, 2026
United States						377						379
Canada						72						71
Mexico						27						26
Americas						476						476
China Mainland						173						172
Australia						33						34
South Korea						23						22
Hong Kong SAR						11						11
Japan						10						10
Singapore						9						9
New Zealand						8						8
Taiwan						8						7
Thailand						7						5
Malaysia						5						5
Macau SAR						3						3
APAC						117						114
United Kingdom						21						20
Germany						9						9
France						6						6
Ireland						4						4
Spain						3						3
Netherlands						2						2
Sweden						2						2
Italy						1						1
Norway						1						1
Switzerland						1						1
EMEA						50						49
Rest of World						167						163
Total company-operated stores						816						811

Retail locations operated by third parties by market as of May 3, 2026 and February 1, 2026 are summarized in the table below.

Number of retail locations operated by third parties by market						May 3, 2026						February 1, 2026
United Arab Emirates						13						13
Israel						8						8
Saudi Arabia						8						9
Kuwait						4						4
Qatar						4						4
Turkey						3						3
Belgium						2						2
Bahrain						1						1
Denmark						1						1
Hungary						1						—
Poland						1						—
Total locations operated by third parties under license and supply arrangements						46						45

Foreign Currency Exchange Risk

Translation Risk. The functional currency of our international subsidiaries is generally the applicable local currency. Our consolidated financial statements are presented in U.S. dollars. Therefore, the net revenue, expenses, assets, and liabilities of our international subsidiaries are translated from their functional currencies into U.S. dollars. Fluctuations in the value of the U.S. dollar affect the reported amounts of net revenue, expenses, assets, and liabilities. As a result of the fluctuation in exchange rates compared to the U.S. dollar, our revenue was $52.2 million higher in the first quarter of 2026 in comparison to the first quarter of 2025.

Foreign currency exchange differences which arise on translation of our international subsidiaries' balance sheets into U.S. dollars are recorded as other comprehensive income (loss), net of tax in accumulated other comprehensive income (loss) within stockholders' equity. A significant portion of our net assets are held by our Canadian dollar subsidiary. We enter into forward currency contracts in order to hedge a portion of the foreign currency exposure associated with the translation of our net investment in our Canadian subsidiary. During the first quarter of 2026, the impact to other comprehensive loss of translation of our Canadian subsidiaries was a reduction in the loss of $7.0 million, inclusive of net investment hedge gains.

Transaction Risk. We also have exposure to changes in foreign currency exchange rates associated with transactions which are undertaken by our subsidiaries in currencies other than their functional currency. Such transactions include intercompany transactions and inventory purchases denominated in currencies other than the functional currency of the purchasing entity. We also hold cash and cash equivalents and other monetary assets in currencies that are different to the functional currency of our subsidiaries. As of May 3, 2026, we had certain forward currency contracts outstanding in order to economically hedge the foreign currency revaluation gains and losses recognized by our foreign subsidiaries, including our Canadian and Chinese subsidiaries, on their monetary assets and liabilities denominated in currencies other than their functional currency.

We perform a sensitivity analysis to determine the market risk exposure associated with the fair values of our forward currency contracts. The net fair value of outstanding derivatives as of May 3, 2026 was a liability of $2.7 million. As of May 3, 2026, a 10% depreciation in the U.S. dollar against the hedged currencies would have resulted in the net fair value of outstanding derivatives depreciating by $30.7 million. The hypothetical change in the fair value of the forward currency contracts would have been substantially offset by a corresponding but directionally opposite change in the underlying hedged items.

The net fair value of our outstanding forward currency contracts increased as of May 3, 2026 compared to February 1, 2026 primarily due to foreign currency exchange rate movement on the derivative financial instruments.

In the future, in an effort to reduce foreign currency exchange risks, we may enter into further derivative financial instruments including hedging additional currency pairs. We do not, and do not intend to, engage in the practice of trading derivative securities for profit.

Please refer to Note 8. Derivative Financial Instruments included in Item 1 of Part I of this report for further details on the nature of our financial instruments.

Interest Rate Risk

Our committed revolving credit facility provides us with available borrowings in an amount up to $600.0 million. Because our revolving credit facilities bear interest at a variable rate, we will be exposed to market risks relating to changes in interest rates if we have a meaningful outstanding balance. As of May 3, 2026, there were no borrowings outstanding under this facility other than letters of credit and guarantee of $6.4 million. We currently do not engage in any interest rate hedging activity and currently have no intention to do so. However, in the future, if we have a meaningful outstanding balance under our revolving facility, in an effort to mitigate losses associated with these risks, we may at times enter into derivative financial instruments, although we have not historically done so. These may take the form of forward contracts, option contracts, or interest rate swaps. We do not, and do not intend to, engage in the practice of trading derivative securities for profit.

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, and in money market funds. As of May 3, 2026, we held cash and cash equivalents of $1.5 billion. Interest generated on cash balances is subject to variability as interest rates increase or decrease.

Credit Risk

We have cash on deposit with various large, reputable financial institutions and have invested in AAA-rated money market funds. 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 seek to minimize our credit risk by entering into transactions with investment-grade, creditworthy, and reputable financial institutions, by monitoring their credit standing, and by limiting exposure to any one counterparty. We have not experienced material losses related to these items, and based on information available, we do not believe credit risk exposure is significant.

Inflation

Inflationary pressures, including higher product, transportation, labor and raw material costs, may adversely affect our operating results if we are unable to offset them through pricing or operating efficiencies. Inflation could also reduce consumer discretionary spending and negatively impact the demand for our products.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial and accounting officer, to allow timely decisions to be made regarding required disclosure. We have established a Disclosure Committee, consisting of certain members of management, to assist in this evaluation. The Disclosure Committee meets on a quarterly basis, and as needed.

Our management, including our principal executive officer and principal financial and accounting officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) as of May 3, 2026. Based on that evaluation, our principal executive officer and principal financial and accounting officer concluded that, as of May 3, 2026, our disclosure controls and procedures were effective.

There were no changes in our internal control over financial reporting during the quarter ended May 3, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In addition to the legal matters described in Note 12. Legal Proceedings and Other Contingencies included in Item 1 of Part I of this report and in our 2025 Annual Report on Form 10-K, 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, employment claims, product liability claims, personal injury claims, and similar matters. We believe the ultimate resolution of any such current proceeding is not reasonably likely to have a material adverse effect on our financial position, results of operations or cash flows.

In addition to the other information contained in this Form 10-Q and in our 2025 Annual Report on Form 10-K, the following risk factors should be considered in evaluating our business. Our business, financial condition, or results of operations could be materially adversely affected as a result of any of the progression, resultant effects, or outcome of these risks.

Risks related to our business and industry

Our success depends on our ability to maintain our brand value and reputation.

The lululemon name is integral to our business and our expansion strategies. Maintaining, promoting, and positioning our brand will depend largely on the success of our marketing and merchandising efforts and our ability to provide a consistent, high-quality product, and guest experience. Our brand positioning, products, and marketing efforts may not be considered distinct, culturally relevant, or desirable to guests, employees, and other stakeholders.

Our brand and reputation could be adversely affected by negative publicity, if we fail to deliver innovative and high-quality products acceptable to our guests, or if we face or mishandle a product recall, which could be amplified by social media. Our reputation could also be impacted by adverse publicity, whether or not valid, regarding allegations that we, or persons currently or previously associated with us, have violated laws or regulations, including but not limited to those related to safety, employment, discrimination, harassment, whistle-blowing, privacy, corporate citizenship, improper business practices, or cybersecurity. Certain activities on the part of stakeholders, including nongovernmental organizations and governmental institutions, could cause reputational damage, distract senior management, and disrupt our business. Additionally, while we devote considerable effort and resources to protecting our intellectual property, if these efforts are not successful the value of our brand may be harmed. Any harm to our brand and reputation could have a material adverse effect on our financial condition.

We operate in a highly competitive market and our competitors may compete more effectively than we can, resulting in a loss of our market share and a decrease in our net revenue and profitability.

The market for our products is highly competitive. Competition may result in pricing pressures, reduced profit margins or lost market share, or a failure to grow or maintain our market share, any of which could substantially harm our business and results of operations. We compete directly against global as well as regional and country-specific wholesalers and direct retailers of athletic apparel, including large, diversified apparel companies with substantial market share, and established companies expanding their production and marketing of technical athletic apparel, as well as against smaller retailers and those specifically focused on women's athletic apparel. We also face competition from wholesalers and direct retailers of traditional commodity athletic apparel, such as cotton T-shirts and sweatshirts. Many of our competitors are large apparel and sporting goods companies with strong worldwide brand recognition. Because of the fragmented nature of the industry, we also compete with other apparel sellers, including those specializing in yoga apparel and other activewear. Our competitors may be able to achieve and maintain brand awareness and market share more quickly and effectively than we can.

We may fail to acknowledge or react appropriately to the entry or growth of a viable competitor or disruptive force, and could struggle to continue to innovate, differentiate, and sustain the value of our brand. Our brand presence and visibility in certain markets may encourage some guests to try or migrate to emerging competitors.

In addition, because we hold limited patents and exclusive intellectual property rights in the technology, fabrics or processes underlying our products, our current and future competitors are able to manufacture and sell products with performance characteristics, fabrication techniques, and styling similar to ours. Even when these products infringe our

intellectual property rights, we may not be able to identify all infringing parties, enforce our rights effectively, or obtain timely and meaningful relief. If "dupe" or imitation products proliferate, whether through traditional retail channels or social media-driven trends, and lead consumers to perceive less differentiation between our products and lower-priced alternatives, our ability to maintain our brand premium, drive net revenue growth, and sustain our profitability could be adversely affected.

If we are unable to anticipate consumer preferences and successfully develop and introduce new, innovative, and differentiated products, we may not be able to maintain or increase our sales and profitability.

Our success depends on our ability to identify and originate product trends as well as to anticipate and react to changing consumer preferences on a timely basis and effectively. Our products are subject to changing consumer preferences that cannot be anticipated with certainty. If we are unable to introduce new products or technologies on a timely basis, or if our new offerings are not accepted by guests, competitors may introduce similar products more quickly, which could undermine our goal to be viewed as a leader in technical athletic apparel innovation. Our new products may not meet consumer needs and consumer preferences could shift rapidly to different types of athletic apparel or away from the types of products we make altogether, and our future success depends in part on our ability to anticipate and respond to these changes. Our failure to anticipate and respond effectively to changing consumer preferences could lead to, among other things, lower sales, lower margins, and excess inventory levels. We may not have or successfully leverage relevant data to effectively understand and react to consumer preferences and expectations. Even if we are successful in anticipating consumer preferences, our ability to adequately react to and address those preferences will in part depend upon our continued ability to develop and introduce innovative, high-quality products. Our failure to effectively introduce new products that are accepted by consumers could result in a decrease in net revenue and excess inventory levels, which could have a material adverse effect on our financial condition.

If any of our products have manufacturing or design defects or are otherwise unacceptable to us or our guests, our business could be harmed.

We have occasionally received, and may in the future receive, product shipments that fail to comply with our specifications or conform to our quality standards. We have also received, and may in the future receive, products that are otherwise unacceptable to us or our guests, including if they fail to meet quality, performance, and fit expectations. Under these circumstances, unless we are able to obtain replacement products in a timely manner, we risk the loss of net revenue resulting from the inability to sell those products and related increased administrative and shipping costs. Additionally, if the unacceptability of our products is not discovered until after such products are sold, our guests could lose confidence in our products, we could face a product recall, we could have regulatory exposure, and our results of operations could suffer and our business, reputation, and brand could be harmed.

The hardware previously sold by our lululemon Studio subsidiary, as well as services currently offered, can be affected by design and manufacturing defects. Sophisticated operating system software and applications, such as those offered by lululemon Studio, often have issues that can unexpectedly interfere with the intended operation of hardware or software products. Defects may also exist in

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Trading Arrangements

During the first quarter of 2026, no director or officer of lululemon (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (in each case, as defined in Item 408(a) of Regulation S-K).

																		Incorporated by Reference
Exhibit No.						Exhibit Title						Filed Herewith						Form						Exhibit No.						File No.						Filing Date
10.1*						Executive Employment Agreement, dated April 21, 2026, between lululemon athletica inc. and Heidi O'Neill												8-K						10.1						001-33608						4/22/2026
10.2						Cooperation Agreement dated May 26, 2026												8-K						10.1						001-33608						5/27/2026
31.1						Certification of principal executive officer Pursuant to Exchange Act Rule 13a-14(a)						X
31.2						Certification of principal financial and accounting officer Pursuant to Exchange Act Rule 13a-14(a)						X
32.1**						Certification of principal executive officer and principal financial and accounting officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101						The following unaudited interim consolidated financial statements from the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended May 3, 2026, formatted in iXBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income, (iii) Consolidated Statements of Stockholders' Equity, (iv) Consolidated Statements of Cash Flows (v) Notes to the Unaudited Interim Consolidated Financial Statements						X
104						Cover Page Interactive Data File (formatted in iXBRL and contained in Exhibit 101)						X

*			Denotes a compensatory plan, contract, or arrangement in which our directors or executive officers may participate.
**			Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

						lululemon athletica inc.
By:						/s/ MEGHAN FRANK
						Meghan Frank
						Interim Co-Chief Executive Officer and Chief Financial Officer
						(principal executive officer and principal financial and accounting officer)

Dated: June 4, 2026