Lululemon Athletica Inc. (LULU)

Working capital turnover

		Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Feb 2, 2020
Revenue	US$ in thousands	9,586,750	8,149,170	6,241,430	4,397,390	3,981,220
Total current assets	US$ in thousands	4,060,580	3,159,450	2,614,850	2,124,380	1,807,940
Total current liabilities	US$ in thousands	1,631,260	1,492,200	1,405,330	883,178	620,418
Working capital turnover		3.95	4.89	5.16	3.54	3.35

January 28, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $9,586,750K ÷ ($4,060,580K – $1,631,260K)
= 3.95

Lululemon Athletica Inc.'s working capital turnover has fluctuated over the past five years, reflecting changes in how efficiently the company is utilizing its working capital to generate sales. The trend indicates that the company has been able to turn over its working capital more effectively in some years compared to others.

In particular, the working capital turnover ratio was highest in Jan 30, 2022, indicating that Lululemon was able to generate sales efficiently using its working capital during that year. This suggests that the company effectively managed its current assets and liabilities to support its operations and sales growth.

However, in Jan 31, 2021, and Feb 2, 2020, the working capital turnover ratio decreased, indicating a lower efficiency in converting working capital into sales during those periods. This may suggest that Lululemon faced challenges in managing its working capital effectively to support its business activities and generate revenue.

Overall, Lululemon Athletica Inc. should aim to maintain or improve its working capital turnover ratio to ensure optimal utilization of its working capital resources and maximize sales generation efficiency in the future.