GURUFOCUS.COM » STOCK LIST » USA » NAS » Lululemon Athletica Inc (NAS:LULU) » Definitions » ROIC %
Switch to:

Lululemon Athletica (NAS:LULU) ROIC %

: 27.77% (As of Oct. 2023)
View and export this data going back to 2007. Start your Free Trial

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Lululemon Athletica's annualized return on invested capital (ROIC %) for the quarter that ended in Oct. 2023 was 27.77%.

As of today (2024-02-23), Lululemon Athletica's WACC % is 10.29%. Lululemon Athletica's ROIC % is 31.35% (calculated using TTM income statement data). Lululemon Athletica generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.


Lululemon Athletica ROIC % Historical Data

The historical data trend for Lululemon Athletica's ROIC % 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
ROIC %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 52.01 43.86 26.24 35.16 32.44

Lululemon Athletica Quarterly Data
Jan19 Apr19 Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22 Oct22 Jan23 Apr23 Jul23 Oct23
ROIC % 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 25.20 26.95 29.19 32.64 27.77

Competitive Comparison

For the Apparel Retail subindustry, Lululemon Athletica's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Lululemon Athletica ROIC % Distribution

For the Retail - Cyclical industry and Consumer Cyclical sector, Lululemon Athletica's ROIC % distribution charts can be found below:

* The bar in red indicates where Lululemon Athletica's ROIC % falls into.



Lululemon Athletica ROIC % Calculation

Lululemon Athletica's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Jan. 2023 is calculated as:

ROIC % (A: Jan. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Jan. 2022 ) + Invested Capital (A: Jan. 2023 ))/ count )
=1726.141 * ( 1 - 35.85% )/( (3039.254 + 3787.148)/ 2 )
=1107.3194515/3413.201
=32.44 %

where

Invested Capital(A: Jan. 2022 )
=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))
=4942.478 - 693.705 - ( 1259.871 - max(0, 1405.334 - 2614.853+1259.871))
=3039.254

Invested Capital(A: Jan. 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))
=5607.038 - 665.023 - ( 1154.867 - max(0, 1492.198 - 3159.453+1154.867))
=3787.148

Lululemon Athletica's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Oct. 2023 is calculated as:

ROIC % (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.

* 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) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROIC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Lululemon Athletica's WACC % is 10.29%. Lululemon Athletica's ROIC % is 31.35% (calculated using TTM income statement data). Lululemon Athletica generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases. Lululemon Athletica earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Be Aware

Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.


Lululemon Athletica ROIC % Related Terms

Thank you for viewing the detailed overview of Lululemon Athletica's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.


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