Lululemon Athletica Inc. (LULU)

Cash conversion cycle

		Jan 31, 2025	Oct 31, 2024	Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Jan 28, 2024	Oct 31, 2023	Oct 29, 2023	Jul 31, 2023	Jul 30, 2023	Apr 30, 2023	Jan 31, 2023	Jan 29, 2023	Oct 31, 2022	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Apr 30, 2022	Jan 31, 2022	Jan 30, 2022
Days of inventory on hand (DOH)	days	121.92	156.90	95.09	89.70	76.30	81.32	112.87	114.96	128.03	140.98	170.26	130.69	146.30	141.64	288.08	140.36	102.76	122.58	83.71	89.78
Days of sales outstanding (DSO)	days	—	—	—	—	—	4.64	—	4.53	—	3.97	—	—	5.79	—	5.04	—	3.81	—	—	4.33
Number of days of payables	days	—	—	—	—	—	21.41	—	21.37	—	25.37	—	—	17.46	—	24.88	—	24.83	—	—	26.91
Cash conversion cycle	days	121.92	156.90	95.09	89.70	76.30	64.55	112.87	98.11	128.03	119.57	170.26	130.69	134.63	141.64	268.24	140.36	81.74	122.58	83.71	67.19

January 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 121.92 + — – —
= 121.92

The cash conversion cycle of Lululemon Athletica Inc. has displayed fluctuations over the analyzed periods. The company's cash conversion cycle is a measure of how long it takes for the company to convert its investments in inventory and other resources into cash flows from sales.

In January 2022, the cash conversion cycle was at 67.19 days, showing a relatively efficient management of the company's working capital. However, by October 2022, the cycle increased significantly to 268.24 days, indicating a potential issue with managing inventory, accounts receivable, and accounts payable effectively.

Following this peak, the company made improvements by reducing the cash conversion cycle to 64.55 days by January 2024. This suggests that Lululemon implemented strategies to streamline its operations and enhance cash flow efficiency.

Overall, Lululemon Athletica Inc. should continue monitoring its cash conversion cycle closely to maintain a balance between optimizing working capital and ensuring efficient cash flow management.