Lululemon Athletica Inc. (LULU)

Working capital turnover

		Jan 31, 2025	Jan 31, 2024	Jan 28, 2024	Jan 31, 2023	Jan 29, 2023
Revenue	US$ in thousands	10,588,100	9,619,280	9,586,750	8,110,520	8,149,170
Total current assets	US$ in thousands	3,546,590	4,060,580	4,060,580	3,159,450	3,159,450
Total current liabilities	US$ in thousands	2,030,320	1,631,260	1,631,260	1,492,200	1,492,200
Working capital turnover		6.98	3.96	3.95	4.86	4.89

January 31, 2025 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $10,588,100K ÷ ($3,546,590K – $2,030,320K)
= 6.98

Based on the data provided, Lululemon Athletica Inc.'s working capital turnover has shown some fluctuations over the past few years. The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales revenue. A higher ratio indicates better efficiency in managing working capital.

For Lululemon, the working capital turnover was 4.89 on January 29, 2023, and 4.86 on January 31, 2023. This implies that the company generated $4.89 and $4.86 in sales for every dollar of working capital invested during those periods, reflecting a consistent performance in utilizing its working capital effectively.

However, there was a slight decrease in efficiency in the subsequent years, with the ratio dropping to 3.95 on January 28, 2024, and 3.96 on January 31, 2024. This decline suggests that Lululemon may have experienced challenges in efficiently converting working capital into sales revenue during these periods.

The most recent data point shows a significant improvement, with the working capital turnover ratio jumping to 6.98 on January 31, 2025. This sharp increase indicates a substantial improvement in efficiency, signaling that Lululemon managed its working capital more effectively to drive sales growth during that period.

Overall, while Lululemon's working capital turnover ratio has varied over the years, the company demonstrated a strong ability to utilize its working capital efficiently to generate sales revenue, especially in the most recent period, which shows a notable improvement.