Lululemon Athletica Inc. (LULU)

Activity ratios

Short-term

Turnover ratios

	Jan 28, 2024	Oct 29, 2023	Jul 30, 2023	Apr 30, 2023	Jan 29, 2023	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Jan 30, 2022	Oct 31, 2021	Aug 1, 2021	May 2, 2021	Jan 31, 2021	Nov 1, 2020	Aug 2, 2020	May 3, 2020	Feb 2, 2020	Nov 3, 2019	Aug 4, 2019	May 5, 2019
Inventory turnover	5.60	3.36	3.20	3.20	3.32	1.69	1.90	4.11	5.10	2.47	5.54	5.46	5.55	4.28	4.65	4.89	5.96	4.70	5.70	6.07
Receivables turnover	77.08	86.04	83.40	79.26	61.25	77.91	86.65	85.08	81.17	77.26	97.74	86.74	70.41	68.16	79.16	79.15	98.90	104.89	129.46	170.15
Payables turnover	21.27	18.09	17.76	17.59	27.85	19.53	21.40	17.03	17.00	20.52	21.51	20.33	20.86	20.53	25.48	38.74	38.63	25.33	25.49	30.49
Working capital turnover	3.96	4.80	4.57	4.74	4.88	5.71	6.01	6.08	5.17	4.88	4.24	3.83	3.54	4.68	5.33	3.62	3.35	4.28	4.59	5.12

Lululemon Athletica Inc.'s activity ratios provide insight into how efficiently the company manages its assets and operations.

1. Inventory turnover: Lululemon's inventory turnover has varied over time but generally shows a healthy rate of inventory movement. The trend indicates that the company has improved its inventory management over the recent quarters, with a notable increase in turnover from below 2 to around 5. This suggests that Lululemon is selling its inventory more quickly, which can lead to reduced carrying costs and potentially higher profits.

2. Receivables turnover: Lululemon's receivables turnover has also fluctuated but generally remains at a high level, indicating that the company efficiently collects payments from customers. The trend shows some variability, but the turnover rate has been consistently above 60, demonstrating strong receivables management.

3. Payables turnover: Lululemon's payables turnover has been relatively stable over the periods analyzed, reflecting the company's consistent approach to managing its payables. The ratios indicate that Lululemon takes around 17 to 30 days to pay its suppliers, suggesting efficient management of trade credit terms.

4. Working capital turnover: Lululemon's working capital turnover has shown fluctuations over time, but the trend suggests that the company is effectively utilizing its working capital to generate revenue. The ratios have generally been above 3, indicating that Lululemon is efficiently using its current assets to support sales and operations.

Overall, based on these activity ratios, Lululemon Athletica Inc. appears to be effectively managing its inventory, receivables, payables, and working capital to drive business performance and support its growth strategy.

Average number of days

		Jan 28, 2024	Oct 29, 2023	Jul 30, 2023	Apr 30, 2023	Jan 29, 2023	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Jan 30, 2022	Oct 31, 2021	Aug 1, 2021	May 2, 2021	Jan 31, 2021	Nov 1, 2020	Aug 2, 2020	May 3, 2020	Feb 2, 2020	Nov 3, 2019	Aug 4, 2019	May 5, 2019
Days of inventory on hand (DOH)	days	65.18	108.50	114.17	114.07	109.82	216.43	191.86	88.71	71.61	147.91	65.83	66.80	65.76	85.24	78.50	74.70	61.24	77.72	64.05	60.10
Days of sales outstanding (DSO)	days	4.74	4.24	4.38	4.61	5.96	4.68	4.21	4.29	4.50	4.72	3.73	4.21	5.18	5.36	4.61	4.61	3.69	3.48	2.82	2.15
Number of days of payables	days	17.16	20.17	20.55	20.75	13.11	18.69	17.05	21.43	21.47	17.79	16.97	17.95	17.50	17.77	14.32	9.42	9.45	14.41	14.32	11.97

Lululemon Athletica Inc.'s activity ratios provide insights into the efficiency of the company's inventory management, accounts receivable collection, and accounts payable payment.

1. Days of Inventory on Hand (DOH):
- The company has shown variation in inventory turnover efficiency over time, with the latest figure at 65.18 days.
- Lululemon has managed to reduce its days of inventory on hand from the peak of 216.43 days in October 2022 to the current level.
- A lower DOH indicates better inventory management as it signifies that the company is selling its inventory faster.

2. Days of Sales Outstanding (DSO):
- The days of sales outstanding have fluctuated but generally remained around 4 to 5 days, suggesting efficient accounts receivable collection.
- The latest DSO figure of 4.74 days reflects that Lululemon is collecting payments from customers relatively quickly.

3. Number of Days of Payables:
- Lululemon's days of payables show stability around 17 to 21 days, with the latest figure at 17.16 days.
- Consistent payment periods to suppliers indicate a balanced approach to managing payables.
- A longer payables period could suggest an advantage in cash flow management, while a shorter period might indicate a strong supplier relationship.

Overall, Lululemon Athletica Inc. appears to have a sound inventory turnover rate, efficient accounts receivable collection, and a stable approach to managing payables, reflecting effective working capital management. However, the company should continue to monitor and optimize these activity ratios to enhance operational efficiency and financial performance.

Long-term

	Jan 28, 2024	Oct 29, 2023	Jul 30, 2023	Apr 30, 2023	Jan 29, 2023	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Jan 30, 2022	Oct 31, 2021	Aug 1, 2021	May 2, 2021	Jan 31, 2021	Nov 1, 2020	Aug 2, 2020	May 3, 2020	Feb 2, 2020	Nov 3, 2019	Aug 4, 2019	May 5, 2019
Fixed asset turnover	6.22	6.51	6.48	6.49	6.41	6.68	6.69	6.84	6.74	6.64	6.81	6.38	5.89	5.66	5.54	5.84	5.92	5.71	5.80	5.87
Total asset turnover	1.36	1.53	1.48	1.53	1.45	1.41	1.44	1.42	1.26	1.27	1.25	1.14	1.05	1.12	1.11	1.20	1.21	1.31	1.33	1.39

The fixed asset turnover ratio measures how effectively a company utilizes its fixed assets to generate sales. Lululemon Athletica Inc. has seen relatively consistent performance in this ratio over the past few quarters, ranging from 5.54 to 6.84. This indicates that the company is efficiently using its fixed assets to generate revenue.

On the other hand, the total asset turnover ratio reflects how well a company generates sales from all its assets. Lululemon Athletica Inc. has shown fluctuating performance in this ratio, with values ranging from 1.05 to 1.53. This suggests some variability in the company's overall asset utilization efficiency.

Overall, Lululemon Athletica Inc. seems to be effectively utilizing its fixed assets to generate revenue, as indicated by the relatively stable fixed asset turnover ratio. However, there is some inconsistency in the total asset turnover ratio, which may point to fluctuations in how efficiently the company is using all its assets to generate sales.