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Case Study: Historical Analysis 1
Lululemon
Nancy Smith
June 25, 2023
Author Note
I have no known conflict of interest to disclose. Correspondence concerning this article should be
addressed to Nancy Smith
Email: nsmith127@liberty.edu
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Case Study: Historical Analysis 2
Income Statement
Lululemon’s has not only grown in popularity with their clothing line but also in their
growth in income. The company had a strong year closing out 2022 by showing a growth in net
revenue by 30% to over 8 billion and delivering results over many geographies despite
challenges (Lululemon 2022).
Lululemon Horizontal and Vertical Analysis
Lululemon ended 2021 with a nice profit of over 4 million then increasing it to over 6
million in 2022 and again another 2 million in 2023 in the first month of just over 8 million.
Despite many job losses and the pandemic and people working from home, the company still
profited well. Their revenue had a 29.6% increase from the end of 2022 to the first quarter of
2023. Many workers found themselves trading business suits for yoga pants and it became the
new business attire while working from home. While Lululemon still plans to market their
clothing line they also plan to market wearable technology, more storefronts, and classes for
fitness.
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Case Study: Historical Analysis 3
Profitability
A company must make a profit to survive in business. Profits come from the sales of the
product but the costs of making the product also come out of those sales. The cost of the
materials to make the clothing, the machinery, and people to make the clothing, and production
all make up these costs. The price of materials such as cotton, lyrcra and spandex have gone up
the same as any other goods.
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Case Study: Historical Analysis 4
Liquidity
Lululemon does a great job at measuring their short-term obligations which leaves their
projected ratios in a great position for growth. According to their corporate website they show
their liquidity to be 2.43 at the end of April (Lululemon, 2023). This ranks them with some to the
top selling brands of designer wear and making them popular. Some of their competitors such as
Nike try to keep up but Nike offers more apparel and equipment, has been around for longer, and
has more of an international presence than Lululemon (Madhave, 2021). When comparing the
products of the company to others, a consumer may find the quality is a bit different but so is the
price. Despite the difference consumers continue to buy and Lulu has proven they are a
contender in the race for workout apparel.
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Case Study: Historical Analysis 5
Leverage
Due to repayment of liabilities of -8.41% Lululemon Athletica Inc improved Leverage
Ratio in first quarter 2023 to 0.68, above the Lululemon Athletica Inc 's average Leverage Ratio
(CSI, 2022). Their philosophy of the “power of three” aided in the leverage needed for
opportunities to show on the balance sheet how they would continue to grow when they ended
the first quarter of 2021 with $1.2 billion in cash and cash equivalents (Lululemon. 2022).
Price to Earnings Ratio
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Case Study: Historical Analysis 6
LuLulemon Consolidate statement of operations and comprehensive income.xlsx
Madhav. (2021). Top lululemon competitors and alternatives 2022. SEOAves.
https://seoaves.com/top-lululemon-competitors-and-alternatives/
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Case Study: Historical Analysis 7
CSI. (2023, June 2). Lululemon Athletica Inc ’s leverage ratio. CSIMarket.
https://csimarket.com/stocks/singleFinancialStrength.php?code=LULU&Le#:~:text=Due
%20to%20repayements%20of%20liabilities%20of%20-8.41%25%20Lululemon,the
%20Lululemon%20Athletica%20Inc%20%27s%20average%20Leverage%20Ratio.
Lululemon. (2022). Annual reports. lululemon.
https://corporate.lululemon.com/investors/financial-information/annual-reports
SEC. (2021). Lululemon filling data. U.S. Securities and Exchange Commission.
https://www.sec.gov/cgi-bin/viewer?
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Case Study: Historical Analysis 8
References
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Case Study: Historical Analysis 9
Bell, J. (2021). Native shoes names former lululemon exec as CEO. Footwear News: FN
(Online),
Diaz, J. (2021, November 30). The Lululemon sues peloton, accusing it of patent infringement.
New York Times. https://www.nytimes.com/2021/11/30/business/lululemon-peloton-
lawsuit.html#:~:text=The%20lawsuit%2C%20filed%20in%20U.S.%20District%20Court
%20for,a%20jury%20trial%2C%20damages%20and%20other%20monetary%20relief.
Earnings wrap: Lululemon reports latest results + more. (2022). Footwear News: FN (Online),
Geurin, A. N. (2020). Sport brand ambassadors' experiences in sponsored user-generated
branding programs. (4), 451- Sport, Business and Management, 10
470. https://doi.org/10.1108/SBM-08-2019-0065
Hadi, L. (2023, February 22). Lululemon: Porter’s five forces industry and competition analysis.
Hivelr. https://www.hivelr.com/2020/11/lululemon-porters-five-forces-industry-and-
competition-analysis/
Lululemon in profits. (2022). Perfect Sourcing,
Lululemon Inc. (2023, Jan 23). Our Purpose, Vision, & Values. Retrieved online Jun 4, 2023,
from Our Purpose, Vision & Values | lululemon.
Lululemon Inc.(b). (2023, Jun 1). Lululemon Athletica Inc. Announces First Quarter Fiscal 2023
Results. Corporate Lululemon. lululemon athletica inc. Announces First Quarter Fiscal
2023 Results | lululemon.
Lululemon Inc. (c). (2023). Our Impact Agenda. Corporate Lululemon. Retrieved from Our
Impact Agenda | lululemon.
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Case Study: Historical Analysis 10
Lululemon Inc. (d). (2023). About the Ambassador Program. Shop Lululemon. Retrieved from
Ambassador Program | lululemon.
Lululemon Inc. (e). (2023). Privacy Policy. Retrieved on June 14, 2023, from Privacy Policy |
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Marwah, G. (2020). Lululemon see rise in sale. Perfect Sourcing,
I McDonald, S. (2020). Lululemon has its first female CFO. Footwear News: FN (Online),
Our purpose, vision & values. lululemon. (2023). https://corporate.lululemon.com/about-us/our-
purpose-and-values
Q3 Earnings: Lululemon Sees More Revenue Gains This Quarter + More. (2021, Dec
09). Footwear News: FN (Online), https://go.openathens.net/redirector/liberty.edu?
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Slone, I. (2022). Why Isn’t more clothing made in Canada? Chatelaine (Online),
Salzman, A. (2019, September 09). Lululemon Is Wining in Race to Avoid China Tariffs.
Nasdaq. Lululemon Is Winning in Race to Avoid China Tariffs | Nasdaq.
Sozzi, B. (2022, June). Inflation: Lululemon is raising prices as petroleum costs bite. Yahoo!
Finance. https://finance.yahoo.com/news/inflation-lululemon-is-jacking-up-prices-by-10-
103801531.html
Wilson, C. (2021). The History of Lululemon. https://chipwilson.com/chapter/founder-and-
lululemon-s-vision
Wolf, L. (2019). Apparel retailers try lending clothes to draw in shoppers. National Real Estate
Investor,
