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Lululemon Athletica (NAS:LULU) Operating Income

: $2,016 Mil (TTM As of Oct. 2023)
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Lululemon Athletica's Operating Income for the three months ended in Oct. 2023 was $413 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Oct. 2023 was $2,016 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Lululemon Athletica's Operating Income for the three months ended in Oct. 2023 was $413 Mil. Lululemon Athletica's Revenue for the three months ended in Oct. 2023 was $2,204 Mil. Therefore, Lululemon Athletica's Operating Margin % for the quarter that ended in Oct. 2023 was 18.72%.

Good Sign:

Lululemon Athletica Inc operating margin is expanding. Margin expansion is usually a good sign.

Lululemon Athletica's 5-Year average Growth Rate for Operating Margin % was 1.70% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Lululemon Athletica's annualized ROC % for the quarter that ended in Oct. 2023 was 27.77%. Lululemon Athletica's annualized ROC (Joel Greenblatt) % for the quarter that ended in Oct. 2023 was 50.99%.


Lululemon Athletica Operating Income Historical Data

The historical data trend for Lululemon Athletica's Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Lululemon Athletica Annual Data
Trend Jan14 Jan15 Jan16 Jan17 Jan18 Jan19 Jan20 Jan21 Jan22 Jan23
Operating Income
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 705.84 889.11 849.83 1,374.75 1,726.14

Lululemon Athletica Quarterly Data
Jan19 Apr19 Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22 Oct22 Jan23 Apr23 Jul23 Oct23
Operating Income Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 352.43 722.34 401.41 479.26 412.62

Lululemon Athletica Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Oct. 2023 adds up the quarterly data reported by the company within the most recent 12 months, which was $2,016 Mil.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Lululemon Athletica  (NAS:LULU) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

Lululemon Athletica's annualized ROC % for the quarter that ended in Oct. 2023 is calculated as:

ROC % (Q: Oct. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jul. 2023 ) + Invested Capital (Q: Oct. 2023 ))/ count )
=1650.464 * ( 1 - 28.52% )/( (4230.265 + 4265.811)/ 2 )
=1179.7516672/4248.038
=27.77 %

where

Invested Capital(Q: Jul. 2023 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Cash, Cash Equivalents, Marketable Securities - max(0, Total Current Liabilities - Total Current Assets+Cash, Cash Equivalents, Marketable Securities))
=5992.458 - 654.663 - ( 1107.53 - max(0, 1386.37 - 3323.933+1107.53))
=4230.265

Invested Capital(Q: Oct. 2023 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Cash, Cash Equivalents, Marketable Securities - max(0, Total Current Liabilities - Total Current Assets+Cash, Cash Equivalents, Marketable Securities))
=6022.264 - 665.315 - ( 1091.138 - max(0, 1448.114 - 3364.899+1091.138))
=4265.811

Note: The Operating Income data used here is four times the quarterly (Oct. 2023) data.

2. Joel Greenblatt's definition of Return on Capital:

Lululemon Athletica's annualized ROC (Joel Greenblatt) % for the quarter that ended in Oct. 2023 is calculated as:

ROC (Joel Greenblatt) %(Q: Oct. 2023 )
=EBIT/Average of (Net fixed Assets + Net Working Capital)
=EBIT/Average of (Property, Plant and Equipment+Net Working Capital)
     Q: Jul. 2023  Q: Oct. 2023
=EBIT/( ( (Property, Plant and Equipment + Net Working Capital) + (Property, Plant and Equipment + Net Working Capital) )/ count )
=1650.464/( ( (2446.37 + max(821.954, 0)) + (2462.525 + max(742.527, 0)) )/ 2 )
=1650.464/( ( 3268.324 + 3205.052 )/ 2 )
=1650.464/3236.688
=50.99 %

where Working Capital is:

Working Capital(Q: Jul. 2023 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(106.221 + 1660.753 + 224.513) - (654.663 + 216.116 + 298.754)
=821.954

Working Capital(Q: Oct. 2023 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(107.004 + 1663.617 + 202.882) - (665.315 + 213.256 + 352.405)
=742.527

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Oct. 2023) EBIT data.

3. Operating Income is also linked to Operating Margin %:

Lululemon Athletica's Operating Margin % for the quarter that ended in Oct. 2023 is calculated as:

Operating Margin %=Operating Income (Q: Oct. 2023 )/Revenue (Q: Oct. 2023 )
=412.616/2204.218
=18.72 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.


Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.


Lululemon Athletica Operating Income Related Terms

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Lululemon Athletica (NAS:LULU) Business Description

Address
1818 Cornwall Avenue, Vancouver, BC, CAN, V6J 1C7
Lululemon Athletica designs, distributes, and markets athletic apparel, footwear, and accessories for women, men, and girls. Lululemon offers pants, shorts, tops, and jackets for both leisure and athletic activities such as yoga and running. The company also sells fitness accessories, such as bags, yoga mats, and equipment. Lululemon sells its products through more than 680 company-owned stores in 19 countries, e-commerce, outlets, and wholesale accounts. The company was founded in 1998 and is based in Vancouver, Canada.
Executives
Meghan Frank officer: Chief Financial Officer C/O LULULEMON ATHLETICA INC., 1818 CORNWALL AVENUE, VANCOUVER A1 V6J 1C7
Nicole Neuburger officer: Chief Brand Officer C/O LULULEMON ATHLETICA INC., 1818 CORNWALL AVENUE, VANCOUVER A1 V6J 1C7
Calvin Mcdonald director, officer: Chief Executive Officer C/O LULULEMON ATHLETICA INC., 1818 CORNWALL AVENUE, VANCOUVER A1 V6J 1C7
Celeste Burgoyne officer: Pres Americas&Global Guest C/O LULULEMON ATHLETICA INC., 1818 CORNWALL AVE, VANCOUVER A1 V6J 1C7
Shane Grant director C/O LULULEMON ATHLETICA INC., 1818 CORNWALL AVENUE, VANCOUVER A1 V6J 1C7
Michelle Sun Choe officer: Chief Product Officer C/O LULULEMON ATHLETICA INC., 1818 CORNWALL AVE, VANCOUVER A1 V6J 1C7
David M Mussafer director C/O ADVENT INTERNATIONAL CORP, 75 STATE ST 29TH FLOOR, BOSTON MA 02104
Isabel Mahe director ONE APPLE PARK WAY, MS169:2CL, CUPERTINO CA 95014
Kathryn Henry director C/O LULULEMON ATHLETICA, INC., 1818 CORNWALL AVENUE, VANCOUVER A1 V6J 1C7
Kourtney Gibson director C/O MARKETAXESS HOLDINGS INC., 55 HUDSON YARDS, 15TH FLOOR, NEW YORK NY 10001
Alison Loehnis director C/O LULULEMON ATHLETICA INC., 1818 CORNWALL AVENUE, VANCOUVER A1 V6J1C7
Andre Maestrini officer: EVP, International C/O LULULEMON ATHLETICA INC., 1818 CORNWALL AVENUE, VANCOUVER A1 V6J 1C7
Glenn Murphy director C/O LULULEMON ATHLETICA INC., 1818 CORNWALL AVENUE, VANCOUVER A1 V6J1C7
Martin Michael Casey director
Jon Mcneill director 45500 FREMONT BLVD, FREMONT CA 94538