Lululemon Athletica Inc. (LULU)
Profitability ratios
Return on sales
| Jan 31, 2025 | Jan 31, 2024 | Jan 28, 2024 | Jan 31, 2023 | Jan 29, 2023 | |
|---|---|---|---|---|---|
| Gross profit margin | 59.23% | 58.31% | 58.51% | 55.39% | 55.13% |
| Operating profit margin | 23.67% | 22.17% | 22.25% | 16.38% | 16.30% |
| Pretax margin | 24.33% | 22.62% | 22.70% | 16.43% | 16.35% |
| Net profit margin | 17.14% | 16.12% | 16.17% | 10.54% | 10.49% |
Lululemon Athletica Inc. has demonstrated a consistent improvement in its profitability ratios over the years.
Starting with the gross profit margin, the company's percentage of revenue retained after accounting for the cost of goods sold has been on an upward trend, increasing from 55.13% in January 2023 to 59.23% in January 2025. This indicates effective management of production costs and potential pricing power.
Moving on to the operating profit margin, Lululemon has also shown a steady increase from 16.30% in January 2023 to 23.67% in January 2025. This suggests efficient management of operating expenses and a growing ability to generate profits from its core business operations.
Similarly, the pretax margin, which represents the proportion of revenue remaining after all operating expenses but before taxes, has seen a positive trend, climbing from 16.35% in January 2023 to 24.33% in January 2025. This indicates the company's strong operational performance and effective cost control measures.
Lastly, in terms of net profit margin, which reflects the proportion of revenue that translates into net income after accounting for all expenses and taxes, Lululemon has shown consistent growth, improving from 10.49% in January 2023 to 17.14% in January 2025. This signifies the company's ability to efficiently convert sales into profits and generate a healthy bottom line.
Overall, the increasing profitability margins across the board highlight Lululemon Athletica Inc.'s strong financial performance and effective management of its resources to drive sustainable growth and profitability.
Return on investment
| Jan 31, 2025 | Jan 31, 2024 | Jan 28, 2024 | Jan 31, 2023 | Jan 29, 2023 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 36.15% | 30.07% | 30.07% | 23.69% | 23.69% |
| Return on assets (ROA) | 26.18% | 21.86% | 21.86% | 15.25% | 15.25% |
| Return on total capital | 0.00% | 52.15% | 50.39% | 67.45% | 42.19% |
| Return on equity (ROE) | 37.78% | 36.63% | 36.63% | 27.15% | 27.15% |
Lululemon Athletica Inc. has exhibited a strong trend in profitability ratios over the analyzed period.
- Operating return on assets (Operating ROA): This ratio indicates the company's operating profits generated from its assets. Lululemon's Operating ROA has consistently improved from 23.69% in January 2023 to 36.15% in January 2025, reflecting efficient utilization of its assets to generate operating income.
- Return on assets (ROA): This ratio measures the company's overall profitability relative to its total assets. Lululemon's ROA also shows a positive growth trajectory, increasing from 15.25% in January 2023 to 26.18% in January 2025, indicating the company's ability to generate profit from its assets.
- Return on total capital: This ratio evaluates the return generated from all sources of capital, including equity and debt. Lululemon's Return on Total Capital fluctuated during the period but generally remained healthy, ranging from 42.19% in January 2023 to 52.15% in January 2024. However, it dropped to 0.00% in January 2025, which could be due to changes in the company's capital structure or operating performance.
- Return on equity (ROE): ROE measures the return generated for the shareholders' equity investment. Lululemon's ROE increased steadily from 27.15% in January 2023 to 37.78% in January 2025, demonstrating the company's effectiveness in generating profits for its shareholders.
Overall, Lululemon Athletica Inc. has exhibited strong profitability performance, with improvements seen in key profitability ratios over the analyzed period, portraying efficient asset utilization, profitability generation, and returns for its investors.