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Lululemon Athletica Piotroski F-Score

: 5 (As of Today)
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The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Lululemon Athletica has an F-score of 5 indicating the company's financial situation is typical for a stable company.

NAS:LULU' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Med: 6   Max: 9
Current: 5

2
9

During the past 13 years, the highest Piotroski F-Score of Lululemon Athletica was 9. The lowest was 2. And the median was 6.


Lululemon Athletica Piotroski F-Score Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are indicated in the company's associated stock exchange currency.

* Premium members only.

Lululemon Athletica Annual Data
Jan11 Jan12 Jan13 Jan14 Jan15 Jan16 Jan17 Jan18 Jan19 Jan20
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 7.00 9.00 7.00 8.00 8.00

Lululemon Athletica Quarterly Data
Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17 Oct17 Jan18 Apr18 Jul18 Oct18 Jan19 Apr19 Jul19 Oct19 Jan20 Apr20 Jul20 Oct20
Piotroski F-Score 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 6.00 8.00 7.00 4.00 5.00

Competitive Comparison
* 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.


Lululemon Athletica Piotroski F-Score Distribution

* The bar in red indicates where Lululemon Athletica's Piotroski F-Score falls into.


How is the Piotroski F-Score calculated?

* All numbers are in millions except for per share data and ratio. All numbers are indicated in the company's associated stock exchange currency.

This Year (Oct20) TTM:Last Year (Oct19) TTM:
Net Income was 298.021 + 28.632 + 86.801 + 143.643 = $557 Mil.
Cash Flow from Operations was 574.21 + -121.243 + 181.305 + 25.342 = $660 Mil.
Revenue was 1397.491 + 651.962 + 902.942 + 1117.426 = $4,070 Mil.
Gross Profit was 810.826 + 334.402 + 489.501 + 627.354 = $2,262 Mil.
Average Total Assets from the begining of this year (Oct19)
to the end of this year (Oct20) was
(2855.144 + 3281.354 + 3201.786 + 3494.027 + 3627.92) / 5 = $3292.0462 Mil.
Total Assets at the begining of this year (Oct19) was $2,855 Mil.
Long-Term Debt & Capital Lease Obligation was $635 Mil.
Total Current Assets was $1,601 Mil.
Total Current Liabilities was $731 Mil.
Net Income was 218.465 + 96.603 + 124.99 + 125.982 = $566 Mil.

Revenue was 1167.458 + 782.315 + 883.352 + 916.138 = $3,749 Mil.
Gross Profit was 668.583 + 421.72 + 485.796 + 505.044 = $2,081 Mil.
Average Total Assets from the begining of last year (Oct18)
to the end of last year (Oct19) was
(1981.011 + 2084.711 + 2463.02 + 2694.744 + 2855.144) / 5 = $2415.726 Mil.
Total Assets at the begining of last year (Oct18) was $1,981 Mil.
Long-Term Debt & Capital Lease Obligation was $564 Mil.
Total Current Assets was $1,452 Mil.
Total Current Liabilities was $575 Mil.

*Note: If the latest quarterly/semi-annual/annual total assets data is 0, then we will use previous quarterly/semi-annual/annual data for all the items in the balance sheet.

Profitability

Question 1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by Total Assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Lululemon Athletica's current Net Income (TTM) was 557. ==> Positive ==> Score 1.

Question 2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by Total Assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Lululemon Athletica's current Cash Flow from Operations (TTM) was 660. ==> Positive ==> Score 1.

Question 3. Change in Return on Assets

Compare this year's return on assets (1) to last year's return on assets.

Score 1 if it's higher, 0 if it's lower.

ROA (This Year)=Net Income/Total Assets (Oct19)
=557.097/2855.144
=0.19512046

ROA (Last Year)=Net Income/Total Assets (Oct18)
=566.04/1981.011
=0.28573289

Lululemon Athletica's return on assets of this year was 0.19512046. Lululemon Athletica's return on assets of last year was 0.28573289. ==> Last year is higher ==> Score 0.

Question 4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA <= ROA.

Lululemon Athletica's current Net Income (TTM) was 557. Lululemon Athletica's current Cash Flow from Operations (TTM) was 660. ==> 660 > 557 ==> CFROA > ROA ==> Score 1.

Funding

Question 5. Change in Gearing or Leverage

Compare this year's gearing (long-term debt divided by average total assets) to last year's gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Oct20)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Oct19 to Oct20
=635.386/3292.0462
=0.1930064

Gearing (Last Year: Oct19)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Oct18 to Oct19
=563.925/2415.726
=0.23343914

Lululemon Athletica's gearing of this year was 0.1930064. Lululemon Athletica's gearing of last year was 0.23343914. ==> This year is lower or equal to last year. ==> Score 1.

Question 6. Change in Working Capital (Liquidity)

Compare this year's current ratio (current assets divided by current liabilities) to last year's current ratio.

Score 1 if this year's current ratio is higher, 0 if it's lower

Current Ratio (This Year: Oct20)=Total Current Assets/Total Current Liabilities
=1600.813/730.878
=2.19026021

Current Ratio (Last Year: Oct19)=Total Current Assets/Total Current Liabilities
=1451.676/574.769
=2.52566857

Lululemon Athletica's current ratio of this year was 2.19026021. Lululemon Athletica's current ratio of last year was 2.52566857. ==> Last year's current ratio is higher ==> Score 0.

Question 7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 0 if there is larger number of shares in issue this year, 1 otherwise.

Lululemon Athletica's number of shares in issue this year was 130.924. Lululemon Athletica's number of shares in issue last year was 130.805. ==> There is larger number of shares in issue this year. ==> Score 0.

Efficiency

Question 8. Change in Gross Margin

Compare this year's gross margin (Gross Profit divided by sales) to last year's.

Score 1 if this year's gross margin is higher, 0 if it's lower.

Gross Margin (This Year: TTM)=Gross Profit/Revenue
=2262.083/4069.821
=0.55581879

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=2081.143/3749.263
=0.55508056

Lululemon Athletica's gross margin of this year was 0.55581879. Lululemon Athletica's gross margin of last year was 0.55508056. ==> This year's gross margin is higher. ==> Score 1.

Question 9. Change in asset turnover

Compare this year's asset turnover (total sales for the year divided by total assets at the beginning of the year) to last year's asset turnover ratio.

Score 1 if this year's asset turnover ratio is higher, 0 if it's lower

Asset Turnover (This Year)=Revenue/Total Assets at the Beginning of This Year (Oct19)
=4069.821/2855.144
=1.42543458

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Oct18)
=3749.263/1981.011
=1.8926008

Lululemon Athletica's asset turnover of this year was 1.42543458. Lululemon Athletica's asset turnover of last year was 1.8926008. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+0+1+1+0+0+1+0
=5

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Lululemon Athletica has an F-score of 5 indicating the company's financial situation is typical for a stable company.

Lululemon Athletica  (NAS:LULU) Piotroski F-Score Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


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