Lululemon Athletica Inc. (LULU)

Interest coverage

		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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	2,132,676	1,533,212	1,547,524	1,469,475	1,328,408	1,604,538	1,510,058	1,399,881	1,333,355	1,200,705	1,147,678	981,056	819,986	778,567	749,476	793,049	889,110	804,043	764,117	730,343
Interest expense (ttm)	US$ in thousands	8,025	28,839	29,170	49,675	41,672	100,388	148,296	143,981	159,060	119,270	88,673	95,755	81,828	48,242	32,525	11,103	12,308	12,707	12,826	12,567
Interest coverage		265.75	53.16	53.05	29.58	31.88	15.98	10.18	9.72	8.38	10.07	12.94	10.25	10.02	16.14	23.04	71.43	72.24	63.28	59.58	58.12

January 28, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $2,132,676K ÷ $8,025K
= 265.75

Lululemon Athletica Inc.'s interest coverage ratio has shown fluctuations over the periods analyzed. The interest coverage ratio measures the company's ability to meet its interest obligations on outstanding debt.

The interest coverage ratio for Lululemon Athletica Inc. has generally been high, indicating a strong ability to cover interest expenses with operating income. The ratios have ranged from a high of 265.75 in the most recent period to a low of 8.38 in a previous period.

The exceptionally high interest coverage ratio of 265.75 in the most recent period suggests that Lululemon Athletica Inc. has substantial earnings to cover its interest expenses, reflecting a robust financial position. In contrast, the lower ratios below 20 in some periods, such as 9.72, 8.38, and 10.18, indicate that the company's ability to cover interest payments was relatively weaker during those times.

Overall, the increasing trend in interest coverage ratio in recent periods indicates an improvement in the company's ability to service its debt. However, management should continue to monitor and maintain a healthy interest coverage ratio to ensure the company's long-term financial stability.