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Published: 2023-06-01

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-33608

lululemon athletica inc.

(Exact name of registrant as specified in its charter)

Delaware

20-3842867

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

1818 Cornwal Avenue, Vancouver, British Columbia V6J 1C7

(Address of principal executive offices)

Registrant's telephone number, including area code:

604-732-6124

Former name, former address and former fiscal year, if changed since last report:

N/A

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.005 per share

LULU

Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed al reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the

preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the

past 90 days. Yes

☑ No ☐

Indicate by check mark whether the registrant has submitted electronical y every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes

☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smal er reporting company, or an emerging

growth company. See the definitions of "large accelerated filer," "accelerated filer," "smal er reporting company," and "emerging growth company" in Rule 12b-2

of the Exchange Act. (Check one):

Large Accelerated Filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smal er reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or

revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shel company (as defined in Rule 12b-2 of the Exchange Act). Yes

☐ No ☑

As of May 26, 2023, there were 121,949,471 shares of the registrant's common stock, par value $0.005 per share, outstanding.Exchangeable and Special Voting Shares:As of May 26, 2023, there were outstanding 5,115,961 exchangeable shares of Lulu Canadian Holding, Inc., a whol y-owned subsidiary of the registrant.

Exchangeable shares are exchangeable for an equal number of shares of the registrant's common stock.In addition, as of May 26, 2023, the registrant had outstanding 5,115,961 shares of special voting stock, through which the holders of exchangeable shares of Lulu

Canadian Holding, Inc. may exercise their voting rights with respect to the registrant. The special voting stock and the registrant's common stock general y vote

together as a single class on al matters on which the common stock is entitled to vote.

		Table of Contents
TABLE OF CONTENTS

			Page
PART I. FINANCIAL INFORMATION
	Item 1.	Financial Statements (Unaudited):	3
		Consolidated Balance Sheets	3
		Consolidated Statements of Operations and Comprehensive Income	4
		Consolidated Statements of Stockholders' Equity	5
		Consolidated Statements of Cash Flows	6
		Index for Notes to the Unaudited Interim Consolidated Financial Statements	7
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
	Item 4.	Controls and Procedures	30
PART II. OTHER INFORMATION
	Item 1.	Legal Proceedings	31
	Item 1A. Risk Factors		31
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
	Item 6.	Exhibits	45
	Signatures		46
				2

		Table of Contents
PART I
	FINANCIAL INFORMATION
		ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
	lululemon athletica inc.
	CONSOLIDATED BALANCE SHEETS
			(Unaudited; Amounts in thousands, except per share amounts)
				April 30,	January 29,
				2023	2023
		ASSETSCurrent assets
		Cash and cash equivalents		$	950,607 $	1,154,867
		Accounts receivable, net			107,468	132,906
		Inventories			1,580,313	1,447,367
		Prepaid and receivable income taxes			182,393	185,641
		Prepaid expenses and other current assets			232,521	238,672
					3,053,302	3,159,453
		Property and equipment, net			1,312,793	1,269,614
		Right-of-use lease assets			993,471	969,419
		Goodwil			24,041		24,144
		Intangible assets, net			20,082		21,961
		Deferred income tax assets					6,130	6,402
		Other non-current assets			161,725	156,045
				$	5,571,544 $	5,607,038
		LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities
		Accounts payable		$	287,464 $	172,732
		Accrued liabilities and other			342,751	399,223
		Accrued compensation and related expenses			125,053	248,167
		Current lease liabilities			210,506	207,972
		Current income taxes payable			30,213	174,221
		Unredeemed gift card liability			223,970	251,478
		Other current liabilities			36,814		38,405
					1,256,771	1,492,198
		Non-current lease liabilities			888,582	862,362
		Non-current income taxes payable			28,555		28,555
		Deferred income tax liabilities			54,533		55,084
		Other non-current liabilities			23,027		20,040
					2,251,468	2,458,239
		Commitments and contingenciesStockholders' equity
		Undesignated preferred stock, $0.01 par value: 5,000 shares authorized; none issued and outstanding					—	—
		Exchangeable stock, no par value: 60,000 shares authorized; 5,116 and 5,116 issued and outstanding					—	—
		Special voting stock, $0.000005 par value: 60,000 shares authorized; 5,116 and 5,116 issued and
		outstanding					—	—
		Common stock, $0.005 par value: 400,000 shares authorized; 122,099 and 122,205 issued and outstanding					610	611
		Additional paid-in capital			478,496	474,645
		Retained earnings			3,118,584	2,926,127
		Accumulated other comprehensive loss			(277,614)	(252,584)
					3,320,076	3,148,799
				$	5,571,544 $	5,607,038
								See accompanying notes to the unaudited interim consolidated financial statements
3

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lululemon athletica inc.
	CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
		(Unaudited; Amounts in thousands, except per share amounts)
			Quarter Ended
			April 30,	May 1,
			2023	2022
					Net revenue	$ 2,000,792 $ 1,613,463
					Cost of goods sold		849,987	743,070
					Gross profit		1,150,805	870,393
					Sel ing, general and administrative expenses		747,513	607,851
					Amortization of intangible assets		1,878	2,195
					Income from operations		401,414	260,347
					Other income (expense), net		8,025		(22)
					Income before income tax expense		409,439	260,325
					Income tax expense		119,034	70,327
					Net income	$	290,405 $	189,998
					Other comprehensive income (loss), net of tax:
					Foreign currency translation adjustment	$	(42,750) $	(25,848)
					Net investment hedge gains		17,720	5,056
					Other comprehensive income (loss), net of tax	$	(25,030) $	(20,792)
					Comprehensive income	$	265,375 $	169,206
					Basic earnings per share	$	2.28 $		1.48
					Diluted earnings per share	$	2.28 $		1.48
					Basic weighted-average number of shares outstanding		127,246	128,077
					Diluted weighted-average number of shares outstanding		127,621	128,541
	See accompanying notes to the unaudited interim consolidated financial statements

								4

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lululemon athletica inc.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited; Amounts in thousands)

Quarter Ended April 30, 2023

Exchangeable

Accumulated

Stock

Special Voting Stock

Common Stock

Additional

Other

Total

Paid-in

Retained

Comprehensive

Stockholders'

Par

Capital

Earnings

Loss

Equity

Value

Balance as of January 29,

2023

5,116 5,116 $

— 122,205 $

611 $ 474,645 $ 2,926,127 $

(252,584) $ 3,148,799

Net income

290,405

Other comprehensive

income (loss), net of tax

(25,030)

Stock-based compensation

expense

21,301

Common stock issued upon

settlement of stock-based

compensation

274

—

11,873

Shares withheld related to

net share settlement of

stock-based compensation

(88)

— (28,793)

(28,793)

Repurchase of common

stock, including excise tax

(292)

(1)

(530) (97,948)

(98,479)

Balance as of April 30, 2023

5,116 5,116 $

— 122,099 $

610 $ 478,496 $ 3,118,584 $

(277,614) $ 3,320,076

Quarter Ended May 1, 2022

Exchangeable

Accumulated

Stock

Special Voting Stock

Common Stock

Additional

Other

Total

Paid-in

Retained

Comprehensive

Stockholders'

Par

Capital

Earnings

Loss

Equity

Value

Balance as of January 30,

2022

5,203 5,203 $

— 123,297 $

616 $ 422,507 $ 2,512,840 $

(195,917) $ 2,740,046

Net income

189,998

Other comprehensive

income (loss), net of tax

(20,792)

Stock-based compensation

expense

18,358

Common stock issued upon

settlement of stock-based

compensation

239

5,141

5,143

Shares withheld related to

net share settlement of

stock-based compensation

(96)

— (32,059)

(32,059)

Repurchase of common

stock

(708)

(4)

(1,234) (231,406)

(232,644)

Balance as of May 1, 2022

5,203 5,203 $

— 122,732 $

614 $ 412,713 $ 2,471,432 $

(216,709) $ 2,668,050

See accompanying notes to the unaudited interim consolidated financial statements

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lululemon athletica inc.
	CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; Amounts in thousands)
		Quarter Ended
		April 30,	May 1,
		2023	2022
				Cash flows from operating activities
				Net income	$	290,405 $	189,998
				Adjustments to reconcile net income to net cash provided by (used in) operating activities:
				Depreciation and amortization		84,116	64,470
				Stock-based compensation expense		21,301	18,358
				Settlement of derivatives not designated in a hedging relationship		(721)	(10,378)
				Changes in operating assets and liabilities:
				Inventories		(155,174)	(320,607)
				Prepaid and receivable income taxes		3,249	2,646
				Prepaid expenses and other current assets		27,511	4,296
				Other non-current assets		(7,222)	(4,523)
				Accounts payable		116,935	20,630
				Accrued liabilities and other		(53,685)	28,113
				Accrued compensation and related expenses		(120,699)	(84,123)
				Current and non-current income taxes payable		(141,237)	(119,959)
				Unredeemed gift card liability		(26,506)	(23,816)
				Right-of-use lease assets and current and non-current lease liabilities		5,255	7,115
				Other current and non-current liabilities		1,975	(15,476)
				Net cash provided by (used in) operating activities		45,503	(243,256)
				Cash flows from investing activities
				Purchase of property and equipment		(136,942)	(111,352)
				Settlement of net investment hedges		(1,277)	10,024
				Net cash used in investing activities		(138,219)	(101,328)
				Cash flows from financing activities
				Proceeds from settlement of stock-based compensation		11,873	5,143
				Shares withheld related to net share settlement of stock-based compensation		(28,793)	(32,059)
				Repurchase of common stock		(98,479)	(232,644)
				Net cash used in financing activities		(115,399)	(259,560)
				Effect of foreign currency exchange rate changes on cash and cash equivalents		3,855	(6,711)
				Increase (decrease) in cash and cash equivalents		(204,260)	(610,855)
				Cash and cash equivalents, beginning of period	$ 1,154,867 $ 1,259,871
				Cash and cash equivalents, end of period	$	950,607 $	649,016
						See accompanying notes to the unaudited interim consolidated financial statements
							6

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lululemon athletica inc.
	INDEX FOR NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
		STATEMENTS
			Note 1	Nature of Operations and Basis of Presentation	8
			Note 2	Recent Accounting Pronouncements	8
			Note 3	Revolving Credit Facilities and Supply Chain Financing Program	9
			Note 4	Stock-Based Compensation and Benefit Plans	10
			Note 5	Fair Value Measurement	11
			Note 6	Derivative Financial Instruments	12
			Note 7	Earnings Per Share	14
			Note 8	Supplementary Financial Information	15
			Note 9	Segmented Information	17
			Note 10	Net Revenue by Geography and Category	18
			Note 11	Legal Proceedings and Other Contingencies	18
						7

			Table of Contents
lululemon athletica inc.
	NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL
		STATEMENTS
			Note 1. Nature of Operations and Basis of Presentation
			Nature of operations
				lululemon athletica inc., a Delaware corporation, ("lululemon" and, together with its subsidiaries unless the context
			otherwise requires, the "Company") is engaged in the design, distribution, and retail of technical athletic apparel, footwear,
			and accessories, which are sold through a chain of company-operated stores, direct to consumer through e-commerce,
			outlets, sales to wholesale accounts, license and supply arrangements, recommerce, and sales from temporary locations.
			Recommerce is the sale of repurchased product via the Company's "Like New" program. The Company operates stores in the
			United States, the People's Republic of China ("PRC"), Canada, Australia, the United Kingdom, South Korea, Germany, New
			Zealand, Singapore, Japan, France, Ireland, Spain, Malaysia, Sweden, the Netherlands, Norway, and Switzerland. There were
			662 and 655 company-operated stores as of April 30, 2023 and January 29, 2023, respectively. The Company also offers in-
			home connected fitness and associated content subscriptions through lululemon Studio.
			Basis of presentation
				The unaudited interim consolidated financial statements as of April 30, 2023 and for the quarters ended April 30, 2023
			and May 1, 2022 are presented in U.S. dol ars and have been prepared by the Company under the rules and regulations of the
			Securities and Exchange Commission ("SEC"). The financial information is presented in accordance with United States
			general y accepted accounting principles ("GAAP") for interim financial information and, accordingly, does not include al of
			the information and footnotes required by GAAP for complete financial statements. The financial information as of
			January 29, 2023 is derived from the Company's audited consolidated financial statements and related notes for the fiscal
			year ended January 29, 2023, which are included in Item 8 in the Company's fiscal 2022 Annual Report on Form 10-K filed with
			the SEC on March 28, 2023. These unaudited interim consolidated financial statements reflect al adjustments which are, in
			the opinion of management, necessary to a fair statement of the results for the interim periods presented. These unaudited
			interim consolidated financial statements should be read in conjunction with the Company's consolidated financial
			statements and related notes included in Item 8 in the Company's fiscal 2022 Annual Report on Form 10-K. Note 2. Recent
			Accounting Pronouncements sets out the impact of recent accounting pronouncements.
				The Company's fiscal year ends on the Sunday closest to January 31 of the fol owing year, typical y resulting in a 52-
			week year, but occasional y giving rise to an additional week, resulting in a 53-week year. Fiscal 2023 wil end on January 28,
			2024 and wil be a 52-week year. Fiscal 2022 was a 52-week year and ended on January 29, 2023. Fiscal 2023 and fiscal 2022
			are referred to as "2023," and "2022," respectively. The first quarter of 2023 and 2022 ended on April 30, 2023 and May 1,
			2022, respectively.
				The Company's business is affected by the pattern of seasonality common to most retail apparel businesses.
			Historical y, the Company has recognized a significant portion of its operating profit in the fourth fiscal quarter of each year as
			a result of increased net revenue during the holiday season.
			Use of estimates
				The preparation of financial statements in conformity with GAAP in the United States requires management to make
			estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets
			and liabilities at the date of the financial statements as wel as the reported amounts of net revenue and expenses during the
			reporting period. Actual results could differ from those estimates.
			Note 2. Recent Accounting Pronouncements
			Recently adopted accounting pronouncements
				The Company considers the applicability and impact of al Accounting Standard Updates ("ASUs"). ASUs adopted by the
			Company during the first quarter of 2023 not listed below were assessed, and determined to be either not applicable or are
			expected to have minimal impact on its consolidated financial position or results of operations.
				In September 2022, the FASB issued ASC 405-50, Liabilities - Supplier Finance Programs, to require annual and interim
			disclosures about the key terms of supplier finance programs used in connection with the purchase of goods and services
			along with information about the obligations under these programs, including the amount outstanding at the end of each
					8

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reporting period and a rol forward of those obligations. The Company adopted this update during the first quarter of 2023
and the related disclosures are included in Note 3. Revolving Credit Facilities and Supply Chain Financing Program.
Recently issued accounting pronouncements
	ASUs recently issued were assessed and determined to be either not applicable or are expected to have minimal impact
on its consolidated financial position or results of operations.
Note 3. Revolving Credit Facilities and Supply Chain Financing Program
North America revolving credit facility
	On December 14, 2021, the Company entered into an amended and restated credit agreement extending its existing
credit facility, which provides for $400.0 mil ion in commitments under an unsecured five-year revolving credit facility. The
credit facility has a maturity date of December 14, 2026, subject to extension under certain circumstances. Borrowings under
the credit facility may be prepaid and commitments may be reduced or terminated without premium or penalty (other than
customary breakage costs).
	As of April 30, 2023, aside from letters of credit of $6.5 mil ion, the Company had no other borrowings outstanding
under this credit facility.
	Borrowings made under the credit facility bear interest at a rate per annum equal to, at the Company's option, either
(a) a rate based on the Secured Overnight Financing Rate as administered by the Federal Reserve Bank of New York ("SOFR"),
or (b) an alternate base rate, plus, in each case, an applicable margin. The applicable margin is determined by reference to a
pricing grid, based on the ratio of indebtedness to earnings before interest, tax, depreciation, amortization, and rent
("EBITDAR") and ranges between 1.000%-1.375% for SOFR loans and 0.000%-0.375% for alternate base rate or Canadian
prime rate loans. Additional y, a commitment fee of between 0.100%-0.200%, also determined by reference to the pricing
grid, is payable on the average daily unused amounts under the credit facility.
	The applicable interest rates and commitment fees are subject to adjustment based on certain sustainability key
performance indicators ("KPIs"). The two KPIs are based on greenhouse gas emissions intensity reduction and gender pay
equity, and the Company's performance against certain targets measured on an annual basis could result in positive or
negative sustainability rate adjustments of 2.50 basis points to its drawn pricing and positive or negative sustainability fee
adjustments of 0.50 basis points to its undrawn pricing.
	The credit agreement contains negative covenants that, among other things and subject to certain exceptions, limit the
ability of the Company's subsidiaries to incur indebtedness, incur liens, undergo fundamental changes, make dispositions of al
or substantial y al of their assets, alter their businesses and enter into agreements limiting subsidiary dividends and
distributions.
	The Company's financial covenants include maintaining an operating lease adjusted leverage ratio of not greater than
3.25:1.00 and the ratio of consolidated EBITDAR to consolidated interest charges (plus rent) of not less than 2.00:1.00. The
credit agreement also contains certain customary representations, warranties, affirmative covenants, and events of default
(including, among others, an event of default upon the occurrence of a change of control). If an event of default occurs, the
credit agreement may be terminated, and the maturity of any outstanding amounts may be accelerated. As of April 30, 2023,
the Company was in compliance with the covenants of the credit facility.
China Mainland revolving credit facility
	In December 2019, the Company entered into an uncommitted and unsecured 130.0 mil ion Chinese Yuan ($18.8
mil ion) revolving credit facility with terms that are reviewed on an annual basis. The credit facility was increased to
230.0 mil ion Chinese Yuan ($33.3 mil ion) during 2020. It is comprised of a revolving loan of up to 200.0 mil ion Chinese Yuan
($28.9 mil ion) and a financial guarantee facility of up to 30.0 mil ion Chinese Yuan ($4.3 mil ion), or its equivalent in another
currency. Loans are available for a period not to exceed 12 months, at an interest rate equal to the loan prime rate plus a
spread of 0.5175%. The Company is required to fol ow certain covenants. As of April 30, 2023, the Company was in
compliance with the covenants and, aside from letters of credit of 25.1 mil ion Chinese Yuan ($3.6 mil ion), there were no
other borrowings or guarantees outstanding under this credit facility.
Supply Chain Financing Program
	The Company facilitates a voluntary supply chain financing ("SCF") program that al ows its suppliers to elect to sel the
receivables owed to them by the Company to a third party financial institution. Participating suppliers negotiate arrangements
		9

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directly with the financial institution. If a supplier chooses to participate in the SCF program it may request an invoice be paid

earlier than it would by the Company, and the financial institution at its sole and absolute discretion, may elect to make an

early payment to the supplier at a discount. The Company’s obligations to its suppliers, including amounts due and scheduled

payment terms, are not impacted by a supplier’s participation in the arrangement and the Company provides no guarantees

to any third parties under the SCF program.

As of April 30, 2023 and January 29, 2023, $65.2 mil ion and $17.6 mil ion, respectively, was outstanding under the SCF

program and presented within accounts payable.

Note 4. Stock-Based Compensation and Benefit Plans

Stock-based compensation plans

The Company's eligible employees participate in various stock-based compensation plans, provided directly by the

Company.

Stock-based compensation expense charged to income for the plans was $21.0 mil ion and $18.2 mil ion for the first

quarter of 2023 and 2022, respectively. Total unrecognized compensation cost for al stock-based compensation plans was

$206.6 mil ion as of April 30, 2023, which is expected to be recognized over a weighted-average period of 2.5 years.

A summary of the balances of the Company's stock-based compensation plans as of April 30, 2023, and changes during

the first quarter then ended, is presented below:

Performance-Based

Stock Options

Restricted Stock Units

Restricted Shares

Restricted Stock Units

Weighted-

Average

Exercise

Grant Date

Number

Price

Number

Fair Value

Number

Fair Value

Number

Fair Value

(In thousands, except per share amounts)

Balance as of January 29, 2023

866 $ 230.78

166 $ 295.93

5 $ 308.66

221 $ 323.89

Granted

202

358.09

120

295.03

—

116

358.09

Exercised/released

140.75

104

200.37

—

281.70

Forfeited/expired

307.34

335.71

—

337.28

Balance as of April 30, 2023

978 $ 264.40

181 $ 349.71

5 $ 308.66

248 $ 354.36

Exercisable as of April 30, 2023

495 $ 194.41

The Company's performance-based restricted stock units are awarded to eligible employees and entitle the grantee to

receive a maximum of two shares of common stock per performance-based restricted stock unit if the Company achieves

specified performance goals and the grantee remains employed during the vesting period. The fair value of performance-

based restricted stock units is based on the closing price of the Company's common stock on the grant date. Expense for

performance-based restricted stock units is recognized when it is probable that the performance goal wil be achieved.

The grant date fair value of the restricted shares and restricted stock units is based on the closing price of the

Company's common stock on the grant date.

The grant date fair value of each stock option granted is estimated on the date of grant using the Black-Scholes model.

The closing price of the Company's common stock on the grant date is used in the model. The assumptions used to calculate

the fair value of the options granted are evaluated and revised, as necessary, to reflect market conditions and the Company's

historical experience. The expected term of the options is based upon the historical experience of similar awards, giving

consideration to expectations of future employee exercise behavior. Expected volatility is based upon the historical volatility

of the Company's common stock for the period corresponding with the expected term of the options. The risk-free interest

rate is based on the U.S. Treasury yield curve for the period corresponding with the expected term of the options. The

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fol owing are weighted averages of the assumptions that were used in calculating the fair value of stock options granted

during the first quarter of 2023:

First Quarter

2023

Expected term

3.75 years

Expected volatility

42.35 %

Risk-free interest rate

3.49 %

Dividend yield

— %

Employee share purchase plan

The Company's board of directors and stockholders approved the Company's Employee Share Purchase Plan ("ESPP") in

September 2007. Contributions are made by eligible employees, subject to certain limits defined in the ESPP, and the

Company matches one-third of the contribution. The maximum number of shares authorized to be purchased under the ESPP

is 6.0 mil ion shares. Al shares purchased under the ESPP are purchased in the open market. During the first quarter of 2023,

there were 27.7 thousand shares purchased.

Defined contribution pension plans

The Company offers defined contribution pension plans to its eligible employees. Participating employees may elect to

defer and contribute a portion of their eligible compensation to a plan up to limits stated in the plan documents, not to

exceed the dol ar amounts set by applicable laws. The Company matches 50% to 75% of the contribution depending on the

participant's length of service, and the contribution is subject to a two year vesting period. The Company's net expense for the

defined contribution plans was $4.8 mil ion and $3.4 mil ion in the first quarter of 2023 and 2022, respectively.

Note 5. Fair Value Measurement

Fair value is defined as the price that would be received to sel an asset or paid to transfer a liability in an orderly

transaction between market participants at the measurement date. Fair value measurements are made using a three-tier fair

value hierarchy, which prioritizes the inputs used in measuring fair value:

• Level 1 - defined as observable inputs such as quoted prices in active markets;

• Level 2 - defined as inputs other than quoted prices in active markets that are either directly or indirectly

observable; and

• Level 3 - defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to

develop its own assumptions.

Assets and liabilities measured at fair value on a recurring basis

The fair value measurement is categorized in its entirety by reference to its lowest level of significant input. As of

April 30, 2023 and January 29, 2023, the Company held certain assets and liabilities that are required to be measured at fair

value on a recurring basis:

April 30,

2023

Level 1

Level 2

Level 3

Balance Sheet Classification

(In thousands)

Money market funds

362,740 $

— $

— Cash and cash equivalents

Term deposits

—

— Cash and cash equivalents

Prepaid expenses and other

Forward currency contract assets

17,388

—

17,388

—

current assets

Forward currency contract liabilities

9,993

—

9,993

— Other current liabilities

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January 29,

2023

Level 1

Level 2

Level 3

Balance Sheet Classification

(In thousands)

Money market funds

568,000 $

— $

— Cash and cash equivalents

Term deposits

—

— Cash and cash equivalents

Prepaid expenses and other

Forward currency contract assets

16,707

—

16,707

—

current assets

Forward currency contract liabilities

25,625

—

25,625

— Other current liabilities

The Company records cash, accounts receivable, accounts payable, and accrued liabilities at cost. The carrying values of

these instruments approximate their fair value due to their short-term maturities.

The Company has short-term, highly liquid investments classified as cash equivalents, which are invested in AAA-rated

money market funds, which include investments in government bonds, and term deposits. The Company records cash

equivalents at their original purchase prices plus interest that has accrued at the stated rate.

The fair values of the forward currency contract assets and liabilities are determined using observable Level 2 inputs,

including foreign currency spot exchange rates, forward pricing curves, and interest rates. The fair values consider the credit

risk of the Company and its counterparties. The Company's Master International Swap Dealers Association, Inc., Agreements

and other similar arrangements al ow net settlements under certain conditions. However, the Company records al derivatives

on its consolidated balance sheets at fair value and does not offset derivative assets and liabilities.

Note 6. Derivative Financial Instruments

Foreign currency exchange risk

The Company is exposed to risks associated with changes in foreign currency exchange rates and uses derivative

financial instruments to manage its exposure to certain of these foreign currency exchange rate risks. The Company does not

enter into derivative contracts for speculative or trading purposes.

The Company currently hedges against changes in the Canadian dol ar and Chinese Yuan to the U.S. dol ar exchange

rate and changes in the Euro and Australian dol ar to the Canadian dol ar exchange rate using forward currency contracts.

Net investment hedges

The Company is exposed to foreign currency exchange gains and losses which arise on translation of its international

subsidiaries' balance sheets into U.S. dol ars. These gains and losses are recorded as other comprehensive income (loss), net

of tax in accumulated other comprehensive income or loss within stockholders' equity.

The Company holds a significant portion of its assets in Canada and enters into forward currency contracts designed to

hedge a portion of the foreign currency exposure that arises on translation of a Canadian subsidiary into U.S. dol ars. These

forward currency contracts are designated as net investment hedges. The Company assesses hedge effectiveness based on

changes in forward rates. The Company recorded no ineffectiveness from net investment hedges during the first quarter of

2023.

The Company classifies the cash flows at settlement of its net investment hedges within investing activities in the

consolidated statements of cash flows.

Derivatives not designated as hedging instruments

The Company is exposed to gains and losses arising from changes in foreign currency exchange rates associated with

transactions which are undertaken by its subsidiaries in currencies other than their functional currency. Such transactions

include intercompany transactions and inventory purchases. These transactions result in the recognition of certain foreign

currency denominated monetary assets and liabilities which are remeasured to the quarter-end or settlement date foreign

currency exchange rate. The resulting foreign currency gains and losses are recorded in sel ing, general and administrative

expenses.

During the first quarter of 2023, the Company entered into certain forward currency contracts designed to economical y

hedge the foreign currency exchange revaluation gains and losses that are recognized by its Canadian and Chinese subsidiaries

on specific monetary assets and liabilities denominated in currencies other than the functional currency of the entity. The

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Company has not applied hedge accounting to these instruments and the change in fair value of these derivatives is recorded

within sel ing, general and administrative expenses.

The Company classifies the cash flows at settlement of its forward currency contracts which are not designated in

hedging relationships within operating activities in the consolidated statements of cash flows.

Quantitative disclosures about derivative financial instruments

The Company presents its derivative assets and derivative liabilities at their gross fair values within prepaid expenses

and other current assets and other current liabilities on the consolidated balance sheets. However, the Company's Master

International Swap Dealers Association, Inc., Agreements and other similar arrangements al ow net settlements under certain

conditions. As of April 30, 2023, there were derivative assets of $17.4 mil ion and derivative liabilities of $10.0 mil ion subject

to enforceable netting arrangements.

The notional amounts and fair values of forward currency contracts were as fol ows:

April 30, 2023

January 29, 2023

Gross

Notional

Assets

Liabilities

Notional

Assets

Liabilities

(In thousands)

Derivatives designated as net

investment hedges:

Forward currency contracts

$ 1,215,000 $

8,194 $

— $ 1,070,000 $

— $

17,211

Derivatives not designated in a

hedging relationship:

Forward currency contracts

1,760,191

9,194

9,993

1,605,284

16,707

8,414

Net derivatives recognized on

consolidated balance sheets:

Forward currency contracts

17,388 $

9,993

16,707 $

25,625

The forward currency contracts designated as net investment hedges outstanding as of April 30, 2023 mature on

different dates between May 2023 and August 2023.

The forward currency contracts not designated in a hedging relationship outstanding as of April 30, 2023 mature on

different dates between May 2023 and August 2023.

The pre-tax gains and losses on foreign currency exchange forward contracts recorded in accumulated other

comprehensive income or loss were as fol ows:

First Quarter

2023

2022

(In thousands)

Gains (losses) recognized in net investment hedge gains (losses):

Derivatives designated as net investment hedges

24,127 $

6,847

No gains or losses have been reclassified from accumulated other comprehensive income or loss into net income for

derivative financial instruments in a net investment hedging relationship, as the Company has not sold or liquidated (or

substantial y liquidated) its hedged subsidiary.

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The pre-tax net foreign currency exchange and derivative gains and losses recorded in the consolidated statement of
	operations were as fol ows:
		First Quarter
		2023	2022
		(In thousands)
Gains (losses) recognized in sel ing, general and administrative expenses:
Foreign currency exchange gains (losses)				$	8,328 $	(1,743)
Derivatives not designated in a hedging relationship					(9,707)	(892)
Net foreign currency exchange and derivative gains (losses)				$	(1,379) $	(2,635)
	Credit risk
The Company is exposed to credit-related losses in the event of nonperformance by the counterparties to the forward
	currency contracts. The credit risk amount is the Company's unrealized gains on its derivative instruments, based on foreign
	currency rates at the time of nonperformance.
The Company's forward currency contracts are entered into with investment grade credit worthy and reputable
	financial institutions that are monitored by the Company for counterparty risk.
The Company's derivative contracts contain certain credit risk-related contingent features. Under certain circumstances,
	including an event of default, bankruptcy, termination, and cross default under the Company's revolving credit facility, the
	Company may be required to make immediate payment for outstanding liabilities under its derivative contracts.
	Note 7. Earnings Per Share
The details of the computation of basic and diluted earnings per share are as fol ows:
		First Quarter
		2023	2022
				(In thousands, except per share
		amounts)
Net income				$	290,405 $	189,998
Basic weighted-average number of shares outstanding					127,246	128,077
Assumed conversion of dilutive stock options and awards					375		464
Diluted weighted-average number of shares outstanding					127,621	128,541
Basic earnings per share				$	2.28 $	1.48
Diluted earnings per share				$	2.28 $	1.48
The Company's calculation of weighted-average shares includes the common stock of the Company as wel as the
	exchangeable shares. Exchangeable shares are the equivalent of common shares in al material respects. Al classes of stock
	have, in effect, the same rights and share equal y in undistributed net income. For the first quarter of 2023 and 2022, 0.1
	mil ion and 0.1 mil ion stock options and awards, respectively, were anti-dilutive to earnings per share and therefore have
	been excluded from the computation of diluted earnings per share.
On January 31, 2019, the Company's board of directors approved a stock repurchase program for up to $500.0 mil ion of
	the Company's common shares. On December 1, 2020, it approved an increase in the remaining authorization from $263.6
	mil ion to $500.0 mil ion, and on October 1, 2021, it approved an increase in the remaining authorization from $141.2 mil ion
	to $641.2 mil ion. During the first quarter of 2022, the Company completed the remaining stock repurchases under this
	program.
On March 23, 2022, the Company's board of directors approved a stock repurchase program for up to $1.0 bil ion of the
	Company's common shares on the open market or in privately negotiated transactions. The repurchase plan has no time limit
	and does not require the repurchase of a minimum number of shares. Common shares repurchased on the open market are
	at prevailing market prices, including under plans complying with the provisions of Rule 10b5-1 and Rule 10b-18 of the
	Securities Exchange Act of 1934. The timing and actual number of common shares to be repurchased wil depend upon
	market conditions, eligibility to trade, and other factors, in accordance with Securities and Exchange Commission
						14

Table of Contents
requirements. The authorized value of shares available to be repurchased under this program excludes the cost of
commissions and excise taxes and as of April 30, 2023, the remaining authorized value was $645.7 mil ion.
	During the first quarter of 2023, 0.3 mil ion shares were repurchased at a total cost including commissions and excise
taxes of $98.5 mil ion. During the first quarter of 2022, 0.7 mil ion shares were repurchased at a total cost including
commissions of $232.6 mil ion.
	Subsequent to April 30, 2023, and up to May 26, 2023, 0.2 mil ion shares were repurchased at a total cost including
commissions and excise taxes of $57.1 mil ion.
Note 8. Supplementary Financial Information
	A summary of certain consolidated balance sheet accounts is as fol ows:
		April 30,		January 29,
		2023		2023
			(In thousands)
Inventories:
Inventories, at cost		$ 1,722,629 $ 1,571,981
Provision to reduce inventories to net realizable value			(142,316)	(124,614)
		$ 1,580,313 $ 1,447,367
Prepaid expenses and other current assets:
Prepaid expenses		$	143,109 $	142,003
Forward currency contract assets			17,388	16,707
Other current assets			72,024	79,962
		$	232,521 $	238,672
Property and equipment, net:
Land		$	78,932 $	80,692
Buildings			28,898	28,850
Leasehold improvements			855,745	818,071
Furniture and fixtures			147,539	144,572
Computer hardware			166,810	166,768
Computer software			812,792	742,295
Equipment and vehicles			35,991	30,766
Work in progress			209,879	244,898
Property and equipment, gross			2,336,586		2,256,912
Accumulated depreciation			(1,023,793)		(987,298)
		$ 1,312,793 $ 1,269,614
Other non-current assets:
Cloud computing arrangement implementation costs		$	119,973 $	114,700
Security deposits			28,945	28,447
Other			12,807	12,898
		$	161,725 $	156,045
					15

Table of Contents
	April 30,		January 29,
	2023		2023
		(In thousands)
Accrued liabilities and other:
Accrued operating expenses	$	144,501 $	169,429
Accrued freight		33,066	57,692
Sales return al owances		44,999	55,528
Forward currency contract liabilities		9,993	25,625
Accrued duty		29,782	21,046
Sales tax col ected		19,639	20,183
Accrued capital expenditures		17,141	19,365
Accrued rent		13,725	12,223
Accrued inventory liabilities		16,728	4,345
Other		13,177	13,787
	$	342,751 $	399,223
				16

Table of Contents
Note 9. Segmented Information
	The Company's segments are based on the financial information it uses in managing its business and comprise two
reportable segments: (i) company-operated stores and (i ) direct to consumer. The remainder of its operations, which includes
outlets, sales to wholesale accounts, license and supply arrangements, recommerce, temporary locations, and lululemon
Studio, are included within Other.
		First Quarter
		2023	2022
		(In thousands)
Net revenue:
Company-operated stores		$	958,087 $	731,604
Direct to consumer			834,942	721,253
Other			207,763	160,606
		$ 2,000,792 $ 1,613,463
Segmented income from operations:
Company-operated stores		$	259,819 $	160,706
Direct to consumer			369,453	285,107
Other			44,083	19,527
			673,355	465,340
General corporate expense			270,063	202,798
Amortization of intangible assets			1,878	2,195
Income from operations			401,414	260,347
Other income (expense), net			8,025		(22)
Income before income tax expense		$	409,439 $	260,325
Capital expenditures:
Company-operated stores		$	41,711 $	24,946
Direct to consumer			26,890	20,339
Corporate and other			68,341	66,067
		$	136,942 $	111,352
Depreciation and amortization:
Company-operated stores		$	36,749 $	31,310
Direct to consumer			8,666	8,669
Corporate and other			38,701	24,491
		$	84,116 $	64,470
					17

Table of Contents
Note 10. Net Revenue by Geography and Category
	In addition to the disaggregation of net revenue by reportable segment in Note 9. Segmented Information, the
fol owing table disaggregates the Company's net revenue by geographic area.
		First Quarter
		2023	2022
		(In thousands)
United States				$ 1,314,391 $ 1,098,329
Canada					253,347	244,944
People's Republic of China					249,685	139,427
Rest of world					183,369	130,763
				$ 2,000,792 $ 1,613,463
	The fol owing table disaggregates the Company's net revenue by category. Other categories is primarily composed of
accessories, lululemon Studio, and footwear.
		First Quarter
		2023	2022
		(In thousands)
Women's product				$ 1,308,828 $ 1,073,924
Men's product					438,165	374,998
Other categories					253,799	164,541
				$ 2,000,792 $ 1,613,463
Note 11. Legal Proceedings and Other Contingencies
	The Company is, from time to time, involved in routine legal matters, and audits and inspections by governmental
agencies and other third parties which are incidental to the conduct of its business. This includes legal matters such as
initiation and defense of proceedings to protect intel ectual property rights, personal injury claims, product liability claims,
employment claims, and similar matters. The Company believes the ultimate resolution of any such legal proceedings, audits,
and inspections wil not have a material adverse effect on its consolidated balance sheets, results of operations or cash flows.
The Company has recognized immaterial provisions related to the expected outcome of legal proceedings.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	Some of the statements contained in this Form 10-Q and any documents incorporated herein by reference constitute
forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Al statements, other than statements of
historical facts, included or incorporated in this Form 10-Q are forward-looking statements, particularly statements which
relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions
concerning matters that are not historical facts, such as statements regarding our future financial condition or results of
operations, our prospects and strategies for future growth, the development and introduction of new products, and the
implementation of our marketing and branding strategies. In many cases, you can identify forward-looking statements by
terms such as "may," "wil ," "should," "expects," "plans," "anticipates," "believes," "estimates," "intends," "predicts,"
"potential" or the negative of these terms or other comparable terminology.
	The forward-looking statements contained in this Form 10-Q and any documents incorporated herein by reference
reflect our current views about future events and are subject to risks, uncertainties, assumptions, and changes in
circumstances that may cause events or our actual activities or results to differ significantly from those expressed in any
forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future events, results, actions, levels of activity, performance, or achievements. Readers are
cautioned not to place undue reliance on these forward-looking statements. A number of important factors could cause
actual results to differ material y from those indicated by the forward-looking statements, including, but not limited to, those
factors described in "Risk Factors" and elsewhere in this report.
					18

	Table of Contents
The forward-looking statements contained in this Form 10-Q reflect our views and assumptions only as of the date of
	this Form 10-Q and are expressly qualified in their entirety by the cautionary statements included in this Form 10-Q. Except as
	required by applicable securities law, we undertake no obligation to update any forward-looking statement to reflect events
	or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.
This information should be read in conjunction with the unaudited interim consolidated financial statements and the
	notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q and the audited consolidated financial statements and
	notes, and Management's Discussion and Analysis of Financial Condition and Results of Operations, contained in our fiscal
	2022 Annual Report on Form 10-K filed with the SEC on March 28, 2023. Fiscal 2023 and fiscal 2022 are referred to as "2023,"
	and "2022," respectively. The first quarter of 2023 and 2022 ended on April 30, 2023 and May 1, 2022, respectively.
	Components of management's discussion and analysis of financial condition and results of operations include:
•	Overview
•	Financial Highlights and Market Conditions and Trends
•	Quarter-to-Date Results of Operations
•	Comparable Store Sales and Total Comparable Sales
•	Non-GAAP Financial Measures
•	Seasonality
•	Liquidity and Capital Resources
•	Critical Accounting Policies and Estimates
•	Operating Locations
We disclose material non-public information through one or more of the fol owing channels: our investor relations
	website (http://corporate.lululemon.com/investors), the social media channels identified on our investor relations website,
	press releases, SEC filings, public conference cal s, and webcasts.
	Overview
lululemon athletica inc. is principal y a designer, distributor, and retailer of technical athletic apparel, footwear, and
	accessories. We have a vision to create transformative products and experiences that build meaningful connections, unlocking
	greater possibility and wel being for al . Since our inception, we have fostered a distinctive corporate culture; we promote a
	set of core values in our business which include taking personal responsibility, acting with courage, valuing connection and
	inclusion, and choosing to have fun. These core values attract passionate and motivated employees who are driven to achieve
	personal and professional goals, and share our purpose "to elevate human potential by helping people feel their best."
We offer a comprehensive line of performance apparel, footwear, and accessories marketed under the lululemon
	brand. Our apparel assortment includes items such as pants, shorts, tops, and jackets designed for a healthy lifestyle including
	athletic activities such as yoga, running, training, and most other activities. We also offer apparel designed for being on the
	move and fitness-inspired accessories. We expect to continue to broaden our merchandise offerings through expansion across
	these product areas. To help build our community of guests, and as part of our membership program, we offer in-home
	connected fitness and associated content subscriptions through lululemon Studio.
	Financial Highlights
For the first quarter of 2023, compared to the first quarter of 2022:
• Net revenue increased 24% to $2.0 bil ion. On a constant dol ar basis, net revenue increased 27%.
• Total comparable sales increased 14%, or 17% on a constant dol ar basis.
		–	Comparable store sales increased 13%, or 16% on a constant dol ar basis.
		–	Direct to consumer net revenue increased 16%, or 18% on a constant dol ar basis.
• Gross profit increased 32% to $1.2 bil ion.
• Gross margin increased 360 basis points to 57.5%.
• Income from operations increased 54% to $401.4 mil ion.
• Operating margin increased 400 basis points to 20.1%.
			19

	Table of Contents
• Income tax expense increased 69% to $119.0 mil ion. Our effective tax rate for the first quarter of 2023 was 29.1%
compared to 27.0% for the first quarter of 2022.
• Diluted earnings per share were $2.28 compared to $1.48 in the first quarter of 2022.
Refer to the non-GAAP reconciliation tables contained in the "Non-GAAP Financial Measures" section of this "Item 2.
	Management's Discussion and Analysis of Financial Condition and Results of Operations" for reconciliations between constant
	dol ar changes in net revenue, total comparable sales, comparable store sales, and direct to consumer net revenue and the
	most directly comparable measures calculated in accordance with GAAP.
	Market Conditions and Trends
Macroeconomic conditions, supply chain disruption, and the COVID-19 pandemic have impacted our business and
	operating costs. Certain trends are expected to continue throughout 2023, with the impact varying by market.
	Macroeconomic Conditions
Macroeconomic conditions, including foreign currency fluctuations, have impacted our financial results. Foreign
	currency fluctuations reduced the growth of our net revenue by $44.6 mil ion when comparing the first quarter of 2023 to
	2022 primarily due to the overal appreciation of the US dol ar. We expect that future exchange rate volatility wil impact our
	results. We have also experienced increased wage rates when comparing the first quarter of 2023 to 2022.
Guest traffic in our company-operated stores and online increased in the first quarter of 2023, compared to the first
	quarter of 2022. Consumer purchasing behaviors may be impacted by current economic conditions including inflation, higher
	interest rates, and other macroeconomic factors which may have an adverse effect on our future operating margins.
	Supply chain disruption
In 2021 and 2022 we experienced supply chain disruption, including delays in inbound delivery of our products as wel
	as in manufacturing. This supply chain disruption caused us to use higher cost modes of transport, including increasing our use
	of air freight. We have seen an improvement in the supply chain disruption during the second half of 2022 and the first
	quarter of 2023, including reductions in freight costs and reductions in our levels of air freight usage.
In the first quarter of 2023 compared to the first quarter of 2022 our product margin increased by 430 basis points,
	primarily due to lower air freight costs from rate reductions and reduced usage. We expect that we wil see improved product
	margin in the first half of 2023 compared to the prior year.
	COVID-19 Pandemic
Most of our retail locations were open throughout the first quarter of 2023 and 2022, with certain locations temporarily
	closed due to COVID-19 resurgences during the first quarter of 2022, including certain closures in the People's Republic of
	China ("PRC"), including the Company's third party distribution center. Net revenue from the PRC increased 79% in the first
	quarter of 2023 compared to the first quarter of 2022, with improvements in COVID-19 trading conditions contributing to this
	increase.
		20

Table of Contents
Quarter-to-Date Results of Operations: First Quarter Results
	The fol owing table summarizes key components of our results of operations for the periods indicated:
		First Quarter
			2023	2022		2023	2022
			(In thousands)	(Percentage of net revenue)
Net revenue			$ 2,000,792 $ 1,613,463	100.0 %	100.0 %
Cost of goods sold				849,987	743,070		42.5	46.1
Gross profit				1,150,805	870,393		57.5	53.9
Sel ing, general and administrative expenses				747,513	607,851		37.4	37.7
Amortization of intangible assets				1,878	2,195		0.1	0.1
Income from operations				401,414	260,347		20.1	16.1
Other income (expense), net				8,025	(22)		0.4		—
Income before income tax expense				409,439	260,325		20.5	16.1
Income tax expense				119,034	70,327		5.9	4.4
Net income			$	290,405 $	189,998		14.5 %	11.8 %
Net Revenue
	Net revenue increased $387.3 mil ion, or 24%, to $2.0 bil ion for the first quarter of 2023 from $1.6 bil ion for the first
quarter of 2022. On a constant dol ar basis, assuming the average foreign currency exchange rates for the first quarter of 2023
remained constant with the average foreign currency exchange rates for the first quarter of 2022, net revenue increased
$432.0 mil ion, or 27%.
	The increase in net revenue was primarily due to increased company-operated store net revenue, including from new
company-operated stores and increased comparable store sales, as wel as due to increased direct to consumer net revenue.
Other net revenue also increased.
	Total comparable sales, which includes comparable store sales and direct to consumer net revenue, increased 14% for
the first quarter of 2023 compared to the first quarter of 2022. Total comparable sales increased 17% on a constant dol ar
basis.
	Net revenue for the first quarter of 2023 and 2022 is summarized below.
			First Quarter
							2023	2022	2023	2022		Year over year change
							(In thousands)	(Percentages)	(In thousands)	(Percentages)
Company-operated stores							$	958,087 $	731,604	47.9 %	45.3 % $		226,483	31.0 %
Direct to consumer								834,942	721,253	41.7	44.7			113,689	15.8
Other								207,763	160,606	10.4	10.0			47,157	29.4
Net revenue							$ 2,000,792 $ 1,613,463	100.0 %	100.0 % $		387,329	24.0 %
	Company-Operated Stores. The increase in net revenue from our company-operated stores was driven by net revenue
from company-operated stores that we opened or significantly expanded since the first quarter of 2022 which contributed
$137.9 mil ion. We have opened 83 net new company-operated stores since the first quarter of 2022, including 39 stores in
Asia Pacific, 37 stores in North America, and seven stores in Europe. The increase in net revenue from our company-operated
stores was also driven by increased comparable store sales. Comparable store sales increased 13%, or 16% on a constant
dol ar basis. The increase in comparable store sales was primarily a result of increased store traffic, partial y offset by a
decrease in conversion rates. Dol ar value per transaction was consistent year over year.
	Direct to Consumer. Direct to consumer net revenue increased 16%, or 18% on a constant dol ar basis. The increase in
net revenue from our direct to consumer segment was primarily a result of increased traffic, partial y offset by a decrease in
conversion rates and a lower dol ar value per transaction.
	Other. The increase in other net revenue was primarily due to increased outlet sales, license and supply arrangement
revenue, sales to wholesale accounts, and recommerce revenue. The increase in net revenue was partial y offset by a
									21

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decrease in net revenue from our temporary locations, which had fewer locations open compared to the prior year, and

lululemon Studio.

Gross Profit

First Quarter

2023

2022

Year over year change

(In thousands)

(Percentage)

Gross profit

$ 1,150,805

870,393

280,412

32.2 %

Gross margin

57.5 %

53.9 %

360 basis points

The increase in gross margin was primarily the result of:

• a net increase in product margin of 430 basis points, primarily due to lower air freight costs from rate reductions

and reduced usage, modestly offset by higher inventory provisions in the current year; and

• a decrease in occupancy and depreciation costs as a percentage of net revenue of 10 basis points, driven primarily

by the increase in net revenue.

The increase in gross margin was partial y offset by an unfavorable impact of foreign currency exchange rates of 50 basis

points, and an increase in costs related to our product departments and distribution centers as a percentage of net revenue of

30 basis points.

Sel ing, General and Administrative Expenses

First Quarter

2023

2022

Year over year change

(In thousands)

(Percentage)

Sel ing, general and administrative expenses

747,513

607,851

139,662

23.0 %

Sel ing, general and administrative expenses as a percentage of net

revenue

37.4 %

37.7 %

(30) basis points

The increase in sel ing, general and administrative expenses was primarily due to:

• an increase in head office costs of $79.3 mil ion, comprised of:

– an increase of $45.5 mil ion primarily due to an increase in depreciation of $14.8 mil ion, increased brand

and community costs, including charitable donations, of $12.6 mil ion, increased technology costs, including

cloud computing amortization, of $11.0 mil ion, as wel as professional fees; and

– an increase in employee costs of $33.8 mil ion primarily due to an increase in salaries and wages of $18.9

mil ion and increased incentive compensation and stock-based compensation of $8.1 mil ion, primarily as a

result of headcount growth and increased wage rates, as wel as increased benefit costs and travel costs.

• an increase in costs related to our operating channels of $61.6 mil ion, comprised of:

– an increase in employee costs of $34.4 mil ion primarily due to an increase in salaries and wages expense

and incentive compensation in our company-operated stores channel, primarily from the growth in our

business and increased wage rates;

– an increase in variable costs of $13.7 mil ion primarily due to an increase in credit card fees, distribution

costs, and packaging costs, primarily as a result of increased net revenue;

– an increase in other costs of $8.2 mil ion primarily due to increased technology costs, professional fees, and

repairs and maintenance costs; and

– an increase in brand and community costs of $5.3 mil ion primarily due to an increase in digital marketing

expenses related to our direct to consumer channel, partial y offset by a decrease in marketing expenses

related to lululemon Studio.

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The increase in sel ing, general and administrative expenses was partial y offset by a decrease in net foreign currency
	exchange and derivative revaluation losses of $1.3 mil ion.
	Amortization of Intangible Assets
		First Quarter
			2023	2022		Year over year change
			(In thousands)	(In thousands)	(Percentage)
	Amortization of intangible assets		$	1,878 $	2,195 $		(317)		(14.4) %
The amortization of intangible assets was primarily the result of the amortization of intangible assets recognized upon
	the acquisition of MIRROR.
	Income from Operations
On a segment basis, we determine income from operations without taking into account our general corporate expenses
	and certain other expenses. Segmented income from operations is summarized below.
							First Quarter
								2023	2022	2023	2022		Year over year change
			(Percentage of net revenue of
								(In thousands)	respective operating segment)	(In thousands)	(Percentage)
	Segmented income from operations:
Company-operated stores								$ 259,819	$ 160,706	27.1 %	22.0 % $		99,113	61.7 %
Direct to consumer									369,453		285,107	44.2	39.5		84,346		29.6
Other									44,083		19,527	21.2	12.2		24,556	125.8
								$ 673,355	$ 465,340	$	208,015		44.7 %
	General corporate expense								270,063		202,798		67,265	33.2
	Amortization of intangible assets								1,878		2,195						(317)	(14)
	Income from operations							$ 401,414	$ 260,347	$	141,067		54.2 %
	Operating margin							20.1 %	16.1 %	400 basis points
Company-Operated Stores. The increase in income from operations from our company-operated stores was primarily
	the result of increased gross profit of $149.8 mil ion, driven by increased net revenue and higher gross margin. The increase in
	gross margin was primarily due to higher product margin driven by lower air freight costs and lower markdowns, partial y
	offset by higher inventory provisions. The increase in gross margin was also due to leverage on occupancy and depreciation
	costs, partial y offset by an unfavorable impact of foreign currency exchange rates and deleverage in costs from our
	distribution centers and product teams. The increase in gross profit was partial y offset by an increase in sel ing, general and
	administrative expenses, primarily due to higher employee and operating costs. Employee costs increased primarily due to
	higher salaries and wages expense and higher incentive compensation as a result of the growth in our business and increased
	wage rates. Store operating costs increased primarily due to increases in credit card fees, packaging costs, and distribution
	costs, as a result of higher net revenue, as wel as increased repairs and maintenance. Income from operations as a
	percentage of company-operated stores net revenue increased due to higher gross margin and leverage on sel ing, general
	and administrative expenses.
Direct to Consumer. The increase in income from operations from our direct to consumer segment was primarily the
	result of increased gross profit of $111.0 mil ion, driven by increased net revenue and higher gross margin. The increase in
	gross margin was primarily due to higher product margin driven by lower air freight costs, partial y offset by higher inventory
	provisions. The increase in gross margin was partial y offset by an unfavorable impact of foreign currency exchange rates and
	deleverage in costs from our distribution centers and product teams. The increase in gross profit was partial y offset by an
	increase in sel ing, general and administrative expenses, primarily due to higher variable operating costs including distribution
	costs, packaging costs, and credit card fees, as a result of higher net revenue, as wel as higher digital marketing expenses and
	technology costs. Income from operations as a percentage of direct to consumer net revenue increased primarily due to
	higher gross margin.
Other. The increase in income from operations from our other channels was primarily the result of increased operating
	profit from our other lululemon retail operations and a reduction in lululemon Studio marketing expenses. Increased net
											23

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revenue from outlets, license and supply arrangements, sales to wholesale accounts, and recommerce resulted in increased

gross profit. This was partial y offset by a decrease in net revenue from our temporary locations and lululemon Studio. Sel ing,

general and administrative expenses decreased primarily due to lower lululemon Studio marketing costs. Income from

operations as a percentage of other net revenue increased primarily due to leverage on sel ing, general and administrative

expenses, partial y offset by lower gross margin driven by higher markdowns.

General Corporate Expense. The increase in general corporate expense was primarily due to increased employee costs,

primarily from headcount growth and increased wage rates, as wel as increased depreciation, brand and community costs,

technology costs, and professional fees. The increase in general corporate expense was partial y offset by a decrease in net

foreign currency exchange and derivative revaluation losses of $1.3 mil ion.

Other Income (Expense), Net

First Quarter

2023

2022

Year over year change

(In thousands)

(Percentage)

Other income (expense), net

8,025 $

(22) $

8,047

n/a

The increase in other income, net was primarily due to an increase in interest income as a result of higher interest rates

and higher cash balances.

Income Tax Expense

First Quarter

2023

2022

Year over year change

(In thousands)

(Percentage)

Income tax expense

119,034

70,327

48,707

69.3 %

Effective tax rate

29.1 %

27.0 %

210 basis points

The effective tax rate for the first quarter of 2023 has increased compared to the first quarter of 2022 primarily due to

the accrual of withholding taxes on unremitted foreign earnings and a decrease in deductions related to stock-based

compensation. This was partial y offset by a reduction in non-deductible expenses in international jurisdictions.

Net Income

First Quarter

2023

2022

Year over year change

(In thousands)

(Percentage)

Net income

290,405 $

189,998 $

100,407

52.8 %

The increase in net income was primarily due to an increase in gross profit of $280.4 mil ion and an increase in other

income (expense), net of $8.0 mil ion, partial y offset by an increase in sel ing, general and administrative expenses of $139.7

mil ion and an increase in income tax expense of $48.7 mil ion.

Comparable Store Sales and Total Comparable Sales

We use comparable store sales to assess the performance of our existing stores as it al ows us to monitor the

performance of our business without the impact of recently opened or expanded stores. We use total comparable sales to

evaluate the performance of our business from an omni-channel perspective. We believe investors would similarly find these

metrics useful in assessing the performance of our business.

Comparable store sales reflect net revenue from company-operated stores that have been open, or open after being

significantly expanded, for at least 12 ful fiscal months. Net revenue from a store is included in comparable store sales

beginning with the first fiscal month for which the store has a ful fiscal month of sales in the prior year. Comparable store

sales exclude sales from new stores that have not been open for at least 12 ful fiscal months, from stores which have not

been in their significantly expanded space for at least 12 ful fiscal months, and from stores which have been temporarily

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relocated for renovations or temporarily closed. Comparable store sales also exclude sales from direct to consumer and our
other operations, as wel as sales from company-operated stores that have closed.
	Total comparable sales combines comparable store sales and direct to consumer net revenue.
	In fiscal years with 53 weeks, the 53rd week of net revenue is excluded from the calculation of comparable sales. In the
year fol owing a 53 week year, the prior year period is shifted by one week to compare similar calendar weeks.
	Opening new stores and expanding existing stores is an important part of our growth strategy. Accordingly, total
comparable sales is just one way of assessing the success of our growth strategy insofar as comparable sales do not reflect the
performance of stores opened, or significantly expanded, within the last 12 ful fiscal months. The comparable sales measures
we report may not be equivalent to similarly titled measures reported by other companies.
Non-GAAP Financial Measures
	Constant dol ar changes in net revenue, total comparable sales, comparable store sales, and direct to consumer net
revenue are non-GAAP financial measures.
	A constant dol ar basis assumes the average foreign currency exchange rates for the period remained constant with the
average foreign currency exchange rates for the same period of the prior year. We provide constant dol ar changes in our
results to help investors understand the underlying growth rate of net revenue excluding the impact of changes in foreign
currency exchange rates.
	The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or with
greater prominence to, the financial information prepared and presented in accordance with GAAP. A reconciliation of the
non-GAAP financial measures fol ows, which includes more detail on the GAAP financial measure that is most directly
comparable to each non-GAAP financial measure, and the related reconciliations between these financial measures. Our non-
GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled
measures reported by other companies.
Constant Dol ar Changes in Net Revenue
	The below changes in net revenue show the change compared to the corresponding period in the prior year.
		First Quarter 2023
		Net Revenue
			(In thousands)	(Percentages)
Change			$	387,329		24 %
Adjustments due to foreign currency exchange rate changes				44,624		3
Change in constant dol ars			$	431,953		27 %
Constant Dol ar Changes in Total Comparable Sales, Comparable Store Sales, and Direct to Consumer Net Revenue
	The below changes in total comparable sales, comparable store sales, and direct to consumer net revenue show the
change compared to the corresponding period in the prior year.
			First Quarter 2023
					Total	Direct to
					Comparable	Comparable	Consumer Net
					Sales(1),(2)	Store Sales(2)	Revenue
Change						14 %	13 %	16 %
Adjustments due to foreign currency exchange rate changes						3	3	2
Change in constant dol ars						17 %	16 %	18 %
__________(1)
	Total comparable sales includes comparable store sales and direct to consumer net revenue.
(2)	Comparable store sales reflects net revenue from company-operated stores that have been open for at least 12 ful fiscal months, or open for at least
	12 ful fiscal months after being significantly expanded.
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Seasonality
	Our business is affected by the general seasonal trends common to the retail apparel industry. Our annual net revenue
is weighted more heavily toward our fourth fiscal quarter, reflecting our historical strength in sales during the holiday season,
while our operating expenses are more equal y distributed throughout the year. As a result, a substantial portion of our
operating profits are typical y generated in the fourth quarter of our fiscal year. For example, we generated approximately
44% of our ful year operating profit during the fourth quarter of 2021. Our operating profits in 2022 were not weighted
towards our fourth quarter primarily due to the impairment of goodwil and other assets recognized in relation to our
lululemon Studio business unit during that quarter.
Liquidity and Capital Resources
	Our primary sources of liquidity are our current balances of cash and cash equivalents, cash flows from operations, and
capacity under our committed revolving credit facility, including to fund short-term working capital requirements. Our primary
cash needs are capital expenditures for opening new stores and remodeling or relocating existing stores, investing in our
distribution centers, investing in technology and making system enhancements, funding working capital requirements, and
making other strategic capital investments both in North America and international y. We may also use cash to repurchase
shares of our common stock. Cash and cash equivalents in excess of our needs are held in interest bearing accounts with
financial institutions, as wel as in money market funds and term deposits.
	The fol owing table summarizes our net cash flows provided by and used in operating, investing, and financing activities
for the periods indicated:
		First Quarter
				Year over year
			2023	2022		change
		(In thousands)
Total cash provided by (used in):
Operating activities			$	45,503 $	(243,256) $			288,759
Investing activities				(138,219)	(101,328)			(36,891)
Financing activities				(115,399)	(259,560)			144,161
Effect of foreign currency exchange rate changes on cash				3,855			(6,711)	10,566
Increase (decrease) in cash and cash equivalents			$	(204,260) $	(610,855) $			406,595
Operating Activities
	The increase in cash provided by operating activities was primarily as a result of:
	• an increase in cash flows from the changes in operating assets and liabilities of $156.1 mil ion, primarily driven by
	changes in inventories and accounts payable, partial y offset by changes in accrued liabilities;
	• increased net income of $100.4 mil ion; and
	• changes in adjusting items of $32.2 mil ion, primarily driven by increased depreciation and higher cash inflows
	related to derivatives not designated in a hedging relationship.
Investing Activities
	The increase in cash used in investing activities was primarily due to increased capital expenditures and the settlement
of net investment hedges. The increase in capital expenditures was primarily due to an increase in company-operated store
expenditures driven by opening new stores and remodeling existing stores as wel as increased investment in our new and
existing distribution facilities. There has also been an increase in direct to consumer expenditures driven by investment in our
distribution centers as wel as other technology infrastructure and system initiatives. Corporate expenditures also increased
driven by investment in technology and business systems and increased expenditures on corporate office renovations.
Financing Activities
	The decrease in cash used in financing activities was primarily the result of a decrease in our stock repurchases. During
the first quarter of 2023, 0.3 mil ion shares were repurchased at a total cost including commissions and excise taxes of $98.5
mil ion. During the first quarter of 2022, 0.7 mil ion shares were repurchased at a total cost including commissions of $232.6
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mil ion. The common stock was repurchased in the open market at prevailing market prices, including under plans complying
with the provisions of Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934, with the timing and actual number
of shares repurchased depending upon market conditions, eligibility to trade, and other factors.
Liquidity Outlook
	We believe that our cash and cash equivalent balances, cash generated from operations, and borrowings available to us
under our committed revolving credit facility wil be adequate to meet our liquidity needs and capital expenditure
requirements for at least the next 12 months. Our cash from operations may be negatively impacted by a decrease in demand
for our products, as wel as the other factors described in "Item 1A. Risk Factors". In addition, we may make discretionary
capital improvements with respect to our stores, distribution facilities, headquarters, or systems, or we may repurchase
shares under an approved stock repurchase program, which we would expect to fund through the use of cash, issuance of
debt or equity securities or other external financing sources to the extent we were unable to fund such expenditures out of
our cash and cash equivalents and cash generated from operations.
	The fol owing table includes certain measures of our liquidity:
		April 30, 2023
		(In thousands)
Cash and cash equivalents		$	950,607
Working capital excluding cash and cash equivalents(1)			845,924
Capacity under committed revolving credit facility			393,546
__________(1)
	Working capital is calculated as current assets of $3.1 bil ion less current liabilities of $1.3 bil ion.
	We enter into standby letters of credit to secure certain of our obligations, including leases, taxes, and duties. As of
April 30, 2023, letters of credit and letters of guarantee totaling $10.0 mil ion had been issued, including $6.5 mil ion under
our committed revolving credit facility.
	Our committed North America credit facility provides for $400.0 mil ion in commitments under an unsecured five-year
revolving credit facility. The credit facility has a maturity date of December 14, 2026, subject to extension under certain
circumstances. As of April 30, 2023, aside from letters of credit of $6.5 mil ion, we had no other borrowings outstanding under
this credit facility. Further information regarding our credit facilities and associated covenants is outlined in Note 3. Revolving
Credit Facilities and Supply Chain Financing Program included in Item 1 of Part I of this report.
	The timing and cost of our inventory purchases wil vary depending on a variety of factors such as revenue growth,
assortment and purchasing decisions, product costs including freight and duty, and the availability of production capacity and
speed. Our inventory balance as of April 30, 2023 was $1.6 bil ion, an increase of 24% from May 1, 2022.
Critical Accounting Policies and Estimates
	The preparation of financial statements in conformity with U.S. general y accepted accounting principles requires
management to make estimates and assumptions. Predicting future events is inherently an imprecise activity and, as such,
requires the use of significant judgment. Actual results may vary from our estimates in amounts that may be material to the
financial statements. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on
assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that
reasonably could have been used or changes in the accounting estimates that are reasonably likely to occur periodical y, could
material y impact our consolidated financial statements.
	Our critical accounting policies, estimates, and judgements are discussed within "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations" of our 2022 Annual Report on Form 10-K filed with the SEC on
March 28, 2023.
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Operating Locations
	Our company-operated stores by country as of April 30, 2023 and January 29, 2023 are summarized in the table below.
		April 30,	January 29,
Number of company-operated stores by country (market)		2023	2023
United States				357	350
People's Republic of China(1)				119	117
Canada				69	69
Australia				32	32
United Kingdom				20	20
South Korea				16	16
Germany			9		10
New Zealand			8		8
Singapore			7		8
Japan			7		7
France			4		4
Ireland			4		4
Spain			3		3
Malaysia			2		2
Sweden			2		2
Netherlands			1		1
Norway			1		1
Switzerland			1		1
Total company-operated stores				662	655
__________(1)
	PRC included 101 stores in China Mainland, nine stores in Hong Kong Special Administrative Region, seven stores in Taiwan, and two stores in Macao
	Special Administration Region, as of April 30, 2023. As of January 29, 2023, there were 99 stores in China Mainland, nine stores in Hong Kong Special
	Administrative Region, seven stores in Taiwan, and two stores in Macao Special Administration Region.
	Retail locations operated by third parties under license and supply arrangements are not included in the above table. As
of April 30, 2023, there were 26 licensed locations, including 12 in Mexico, seven in the United Arab Emirates, three in Qatar,
three in Saudi Arabia, and one in Kuwait.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	Foreign Currency Exchange Risk. The functional currency of our international subsidiaries is general y the applicable
local currency. Our consolidated financial statements are presented in U.S. dol ars. Therefore, the net revenue, expenses,
assets, and liabilities of our international subsidiaries are translated from their functional currencies into U.S. dol ars.
Fluctuations in the value of the U.S. dol ar affect the reported amounts of net revenue, expenses, assets, and liabilities.
Foreign currency exchange differences which arise on translation of our international subsidiaries' balance sheets into U.S.
dol ars are recorded as other comprehensive income (loss), net of tax in accumulated other comprehensive income or loss
within stockholders' equity.
	We also have exposure to changes in foreign currency exchange rates associated with transactions which are
undertaken by our subsidiaries in currencies other than their functional currency. Such transactions include intercompany
transactions and inventory purchases denominated in currencies other than the functional currency of the purchasing entity.
As a result, we have been impacted by changes in foreign currency exchange rates and may be impacted for the foreseeable
future. The potential impact of currency fluctuation increases as our international expansion increases.
	As of April 30, 2023, we had certain forward currency contracts outstanding in order to hedge a portion of the foreign
currency exposure that arises on translation of a Canadian subsidiary into U.S. dol ars. We also had certain forward currency
contracts outstanding in an effort to reduce our exposure to the foreign currency exchange revaluation gains and losses that
are recognized by our Canadian and Chinese subsidiaries on U.S. dol ar denominated monetary assets and liabilities. Please
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refer to Note 6. Derivative Financial Instruments included in Item 1 of Part I of this report for further information, including
details of the notional amounts outstanding.
	In the future, in an effort to reduce foreign currency exchange risks, we may enter into further derivative financial
instruments including hedging additional currency pairs. We do not, and do not intend to, engage in the practice of trading
derivative securities for profit.
	We currently generate a significant portion of our net revenue and incur a significant portion of our expenses in Canada.
We also hold a significant portion of our net assets in Canada. The reporting currency for our consolidated financial
statements is the U.S. dol ar. A strengthening of the U.S. dol ar against the Canadian dol ar results in:
	• the fol owing impacts to the consolidated statements of operations:
		– a decrease in our net revenue upon translation of the sales made by our Canadian operations into U.S.
		dol ars for the purposes of consolidation;
		– a decrease in our sel ing, general and administrative expenses incurred by our Canadian operations upon
		translation into U.S. dol ars for the purposes of consolidation;
		– foreign currency exchange revaluation gains by our Canadian subsidiaries on U.S. dol ar denominated
		monetary assets and liabilities; and
		– derivative valuation losses on forward currency contracts not designated in a hedging relationship;
	• the fol owing impacts to the consolidated balance sheets:
		– a decrease in the foreign currency translation adjustment which arises on the translation of our Canadian
		subsidiaries' balance sheets into U.S. dol ars; and
		– net investment hedge losses from derivative valuation losses on forward currency contracts, entered into as
		net investment hedges of a Canadian subsidiary.
	During the first quarter of 2023, the change in the relative value of the U.S. dol ar against the Canadian dol ar resulted in
a $22.8 mil ion increase in accumulated other comprehensive loss within stockholders' equity. During the first quarter of
2022, the change in the relative value of the U.S. dol ar against the Canadian dol ar resulted in a $11.4 mil ion increase in
accumulated other comprehensive loss within stockholders' equity.
	A 10% appreciation in the relative value of the U.S. dol ar against the Canadian dol ar compared to the foreign currency
exchange rates in effect for the first quarter of 2023 would have resulted in lower income from operations of approximately
$83.9 mil ion. This assumes a consistent 10% appreciation in the U.S. dol ar against the Canadian dol ar over the first quarter
of 2023. The timing of changes in the relative value of the U.S. dol ar combined with the seasonal nature of our business, can
affect the magnitude of the impact that fluctuations in foreign currency exchange rates have on our income from operations.
	Interest Rate Risk. Our committed revolving credit facility provides us with available borrowings in an amount up to
$400.0 mil ion. Because our revolving credit facilities bear interest at a variable rate, we wil be exposed to market risks
relating to changes in interest rates, if we have a meaningful outstanding balance. As of April 30, 2023, aside from letters of
credit of $6.5 mil ion, there were no borrowings outstanding under these credit facilities. We currently do not engage in any
interest rate hedging activity and currently have no intention to do so. However, in the future, if we have a meaningful
outstanding balance under our revolving facility, in an effort to mitigate losses associated with these risks, we may at times
enter into derivative financial instruments, although we have not historical y done so. These may take the form of forward
contracts, option contracts, or interest rate swaps. We do not, and do not intend to, engage in the practice of trading
derivative securities for profit.
	Our cash and cash equivalent balances are held in the form of cash on hand, bank balances, and short-term deposits
with original maturities of three months or less, and in money market funds. We do not believe these balances are subject to
material interest rate risk.
	Credit Risk. We have cash on deposit with various large, reputable financial institutions and have invested in AAA-rated
money market funds, which include investments in government bonds. The amount of cash and cash equivalents held with
certain financial institutions exceeds government-insured limits. We are also exposed to credit-related losses in the event of
nonperformance by the financial institutions that are counterparties to our forward currency contracts. The credit risk
amount is our unrealized gains on our derivative instruments, based on foreign currency rates at the time of nonperformance.
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We have not experienced any losses related to these items, and we believe credit risk to be minimal. We seek to minimize our
credit risk by entering into transactions with investment grade credit worthy and reputable financial institutions and by
monitoring the credit standing of the financial institutions with whom we transact. We seek to limit the amount of exposure
with any one counterparty.
Inflation
	Inflationary factors such as increases in the cost of our product, as wel as overhead costs and capital expenditures may
adversely affect our operating results. During 2022 and the first quarter of 2023, our operating margin was impacted by
increased wage rates. During the first half of 2022, our gross margin was impacted by higher air freight costs as a result of
global supply chain disruption.
	Sustained increases in transportation costs, wages, and raw material costs, or other inflationary pressures in the future
may have an adverse effect on our ability to maintain current levels of operating margin if the sel ing prices of our products do
not increase with these increased costs, or we cannot identify cost efficiencies.
ITEM 4. CONTROLS AND PROCEDURES
	We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed
by us in the reports we file or submit under the Securities Exchange Act of 1934, is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and
communicated to our management, including our principal executive officer and principal financial and accounting officer, to
al ow timely decisions to be made regarding required disclosure. We have established a Disclosure Committee, consisting of
certain members of management, to assist in this evaluation. The Disclosure Committee meets on a quarterly basis, and as
needed.
	Our management, including our principal executive officer and principal financial and accounting officer, evaluated the
effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the
Exchange Act) as of April 30, 2023. Based on that evaluation, our principal executive officer and principal financial and
accounting officer concluded that, as of April 30, 2023, our disclosure controls and procedures were effective.
	There were no changes in our internal control over financial reporting during the quarter ended April 30, 2023 that have
material y affected, or are reasonably likely to material y affect, our internal control over financial reporting.
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PART II
	OTHER INFORMATION
		ITEM 1. LEGAL PROCEEDINGS
			In addition to the legal matters described in Note 11. Legal Proceedings and Other Contingencies included in Item 1 of
		Part I of this report and in our 2022 Annual Report on Form 10-K, we are, from time to time, involved in routine legal matters
		incidental to the conduct of our business, including legal matters such as initiation and defense of proceedings to protect
		intel ectual property rights, personal injury claims, product liability claims, employment claims, and similar matters. We
		believe the ultimate resolution of any such current proceeding wil not have a material adverse effect on our financial
		position, results of operations or cash flows.
		ITEM 1A. RISK FACTORS
			In addition to the other information contained in this Form 10-Q and in our 2022 Annual Report on Form 10-K, the
		fol owing risk factors should be considered in evaluating our business. Our business, financial condition, or results of operations
		could be material y adversely affected as a result of any of these risks.
		Risks related to our business and industry
		Our success depends on our ability to maintain the value and reputation of our brand.
			The lululemon name is integral to our business as wel as to the implementation of our expansion strategies.
		Maintaining, promoting, and positioning our brand wil depend largely on the success of our marketing and merchandising
		efforts and our ability to provide a consistent, high quality product, and guest experience. We rely on social media, as one of
		our marketing strategies, to have a positive impact on both our brand value and reputation. Our brand and reputation could
		be adversely affected if we fail to achieve these objectives, if our public image was to be tarnished by negative publicity,
		which could be amplified by social media, if we fail to deliver innovative and high quality products acceptable to our guests, or
		if we face or mishandle a product recal . Our reputation could also be impacted by adverse publicity, whether or not valid,
		regarding al egations that we, or persons associated with us or formerly associated with us, have violated applicable laws or
		regulations, including but not limited to those related to safety, employment, discrimination, harassment, whistle-blowing,
		privacy, corporate citizenship, improper business practices, or cybersecurity. Certain activities on the part of stakeholders,
		including nongovernmental organizations and governmental institutions, could cause reputational damage, distract senior
		management, and disrupt our business. Additional y, while we devote considerable effort and resources to protecting our
		intel ectual property, if these efforts are not successful the value of our brand may be harmed. Any harm to our brand and
		reputation could have a material adverse effect on our financial condition.
		Changes in consumer shopping preferences, and shifts in distribution channels could material y impact our results of
		operations.
			We sel our products through a variety of channels, with a significant portion through traditional brick-and-mortar retail
		channels. As strong e-commerce channels emerge and develop, we are evolving towards an omni-channel approach to
		support the shopping behavior of our guests. This involves country and region-specific websites, social media, product
		notification emails, mobile apps, including mobile apps on in-store devices that al ow demand to be fulfil ed via our
		distribution centers, and online order fulfil ment through stores. The diversion of sales from our company-operated stores
		could adversely impact our return on investment and could lead to impairment charges and store closures, including lease exit
		costs. We could have difficulty in recreating the in-store experience through direct channels. Our failure to successful y
		integrate our digital and physical channels and respond to these risks might adversely impact our business and results of
		operations, as wel as damage our reputation and brands.
		If any of our products have manufacturing or design defects or are otherwise unacceptable to us or our guests, our business
		could be harmed.
			We have occasional y received, and may in the future receive, shipments of products that fail to comply with our
		technical specifications or that fail to conform to our quality control standards. We have also received, and may in the future
		receive, products that are otherwise unacceptable to us or our guests. Under these circumstances, unless we are able to
		obtain replacement products in a timely manner, we risk the loss of net revenue resulting from the inability to sel those
		products and related increased administrative and shipping costs. Additional y, if the unacceptability of our products is not
		discovered until after such products are sold, our guests could lose confidence in our products or we could face a product
		recal and our results of operations could suffer and our business, reputation, and brand could be harmed.
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Our lululemon Studio subsidiary offers complex hardware and software products and services that can be affected by
	design and manufacturing defects. Sophisticated operating system software and applications, such as those offered by
	lululemon Studio, often have issues that can unexpectedly interfere with the intended operation of hardware or software
	products. Defects may also exist in components and products that we source from third parties. Any defects could make our
	products and services unsafe and create a risk of environmental or property damage or personal injury and we may become
	subject to the hazards and uncertainties of product liability claims and related litigation. The occurrence of real or perceived
	defects in any of our products, now or in the future, could result in additional negative publicity, regulatory investigations, or
	lawsuits filed against us, particularly if guests or others who use or purchase our lululemon Studio products are injured. Even
	if injuries are not the result of any defects, if they are perceived to be, we may incur expenses to defend or settle any claims
	and our brand and reputation may be harmed.
	We operate in a highly competitive market and our competitors may compete more effectively than we can, resulting in a
	loss of our market share and a decrease in our net revenue and profitability.
The market for technical athletic apparel is highly competitive. Competition may result in pricing pressures, reduced
	profit margins or lost market share, or a failure to grow or maintain our market share, any of which could substantial y harm
	our business and results of operations. We compete directly against wholesalers and direct retailers of athletic apparel,
	including large, diversified apparel companies with substantial market share, and established companies expanding their
	production and marketing of technical athletic apparel, as wel as against retailers specifical y focused on women's athletic
	apparel. We also face competition from wholesalers and direct retailers of traditional commodity athletic apparel, such as
	cotton T-shirts and sweatshirts. Many of our competitors are large apparel and sporting goods companies with strong
	worldwide brand recognition. Because of the fragmented nature of the industry, we also compete with other apparel sel ers,
	including those specializing in yoga apparel and other activewear. Many of our competitors have significant competitive
	advantages, including longer operating histories, larger and broader customer bases, more established relationships with a
	broader set of suppliers, greater brand recognition and greater financial, research and development, store development,
	marketing, distribution, and other resources than we do. Our competitors may be able to achieve and maintain brand
	awareness and market share more quickly and effectively than we can.
We may fail to acknowledge or react appropriately to the entry or growth of a viable competitor or disruptive force, and
	could struggle to continue to innovate, differentiate, and sustain the growth of our brand. The increasing dominance and
	presence of our brand may also drive guests towards alternative emerging competitors.
In addition, because we hold limited patents and exclusive intel ectual property rights in the technology, fabrics or
	processes underlying our products, our current and future competitors are able to manufacture and sel products with
	performance characteristics, fabrication techniques, and styling similar to our products.
	Our sales and profitability may decline as a result of increasing costs and decreasing sel ing prices.
Our business is subject to significant pressure on costs and pricing caused by many factors, including intense
	competition, constrained sourcing capacity and related inflationary pressure, the availability of qualified labor and wage
	inflation, pressure from consumers to reduce the prices we charge for our products, and changes in consumer demand. These
	and other factors have, and may in the future, cause us to experience increased costs, reduce our prices to consumers or
	experience reduced sales in response to increased prices, any of which could cause our operating margin to decline if we are
	unable to offset these factors with reductions in operating costs and could have a material adverse effect on our financial
	condition, operating results, and cash flows.
	If we are unable to anticipate consumer preferences and successful y develop and introduce new, innovative, and
	differentiated products, we may not be able to maintain or increase our sales and profitability.
Our success depends on our ability to identify and originate product trends as wel as to anticipate and react to
	changing consumer demands in a timely manner. Al of our products are subject to changing consumer preferences that
	cannot be predicted with certainty. If we are unable to introduce new products or novel technologies in a timely manner or
	our new products or technologies are not accepted by our guests, our competitors may introduce similar products in a more
	timely fashion, which could hurt our goal to be viewed as a leader in technical athletic apparel innovation. Our new products
	may not receive consumer acceptance as consumer preferences could shift rapidly to different types of athletic apparel or
	away from these types of products altogether, and our future success depends in part on our ability to anticipate and respond
	to these changes. Our failure to anticipate and respond in a timely manner to changing consumer preferences could lead to,
	among other things, lower sales and excess inventory levels. We may not have relevant data to effectively understand and
	react to consumer preferences and expectations. Even if we are successful in anticipating consumer preferences, our ability to
	adequately react to and address those preferences wil in part depend upon our continued ability to develop and introduce
	innovative, high-quality products. Our failure to effectively introduce new products that are accepted by consumers could
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result in a decrease in net revenue and excess inventory levels, which could have a material adverse effect on our financial
condition.
Our results of operations could be material y harmed if we are unable to accurately forecast guest demand for our
products.
	To ensure adequate inventory supply, we must forecast inventory needs and place orders with our manufacturers
based on our estimates of future demand for particular products. Our ability to accurately forecast demand for our products
could be affected by many factors, including an increase or decrease in guest demand for our products or for products of our
competitors, our failure to accurately forecast guest acceptance of new products, product introductions by competitors,
unanticipated changes in general market conditions (for example, because of global economic concerns such as inflation, an
economic downturn, or delays and disruptions resulting from local and international shipping delays and labor shortages), and
weakening of economic conditions or consumer confidence in future economic conditions (for example, because of
inflationary pressures, or because of sanctions, restrictions, and other responses related to geopolitical events). If we fail to
accurately forecast guest demand, we may experience excess inventory levels or a shortage of products available for sale in
our stores or for delivery to guests.
	Inventory levels in excess of guest demand may result in inventory write-downs or write-offs and the sale of excess
inventory at discounted prices, which would cause our gross margin to suffer and could impair the strength and exclusivity of
our brand. Conversely, if we underestimate guest demand for our products, our manufacturers may not be able to deliver
products to meet our requirements, and this could result in damage to our reputation and guest relationships.
Our limited operating experience and limited brand recognition in new international markets and new product categories
may limit our expansion and cause our business and growth to suffer.
	Our future growth depends in part on our expansion efforts outside of North America. We have limited experience with
regulatory environments and market practices international y, and we may not be able to penetrate or successful y operate in
any new market. In connection with our expansion efforts we may encounter obstacles we did not face in North America,
including cultural and linguistic differences, differences in regulatory environments, labor practices and market practices,
difficulties in keeping abreast of market, business and technical developments, and international guests' tastes and
preferences. We may also encounter difficulty expanding into new international markets because of limited brand recognition
leading to delayed acceptance of our technical athletic apparel by guests in these new international markets. Our failure to
develop our business in new international markets or disappointing growth outside of existing markets could harm our
business and results of operations.
	In addition, our continued growth depends in part on our ability to expand our product categories and introduce new
product lines. We may not be able to successful y manage integration of new product categories or the new product lines
with our existing products. Sel ing new product categories and lines wil require our management to learn different strategies
in order to be successful. We may be unsuccessful in entering new product categories and developing or launching new
product lines, which requires management of new suppliers, potential new customers, and new business models. Our
management may not have the experience of sel ing in these new product categories and we may not be able to grow our
business as planned. For example, in July 2020, we acquired MIRROR, an in-home fitness company with an interactive
workout platform that features live and on-demand classes. If we are unable to effectively and successful y further develop
these and future new product categories and lines, we may not be able to increase or maintain our sales and our operating
margins may be adversely affected. This may also divert the attention of management and cause additional expenses.
	We may, from time to time, evaluate and pursue other strategic investments or acquisitions. These involve various
inherent risks and the benefits sought may not be realized.
If we continue to grow at a rapid pace, we may not be able to effectively manage our growth and the increased complexity
of our business and as a result our brand image and financial performance may suffer.
	If our operations continue to grow at a rapid pace, we may experience difficulties in obtaining sufficient raw materials
and manufacturing capacity to produce our products, as wel as delays in production and shipments, as our products are
subject to risks associated with overseas sourcing and manufacturing. We could be required to continue to expand our sales
and marketing, product development and distribution functions, to upgrade our management information systems and other
processes and technology, and to obtain more space for our expanding workforce. This expansion could increase the strain on
our resources, and we could experience operating difficulties, including difficulties in hiring, training, and managing an
increasing number of employees. These difficulties could result in the erosion of our brand image which could have a material
adverse effect on our financial condition.
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We are subject to risks associated with leasing retail and distribution space subject to long-term and non-cancelable leases.
	We lease the majority of our stores under operating leases and our inability to secure appropriate real estate or lease
terms could impact our ability to grow. Our leases general y have initial terms of between two and 15 years, and general y can
be extended in increments between two and five years, if at al . We general y cannot cancel these leases at our option. If an
existing or new store is not profitable, and we decide to close it, as we have done in the past and may do in the future, we
may nonetheless be committed to perform our obligations under the applicable lease including, among other things, paying
the base rent for the balance of the lease term. Similarly, we may be committed to perform our obligations under the
applicable leases even if current locations of our stores become unattractive as demographic patterns change. In addition, as
each of our leases expire, we may fail to negotiate renewals, either on commercial y acceptable terms or at al , which could
require us to close stores in desirable locations.
	We also lease the majority of our distribution centers and our inability to secure appropriate real estate or lease terms
could impact our ability to deliver our products to the market.
Our future success is substantial y dependent on the service of our senior management and other key employees.
	The performance of our senior management team and other key employees may not meet our needs and expectations.
Also, the loss of services of any of these key employees, or any negative public perception with respect to these individuals,
may be disruptive to, or cause uncertainty in, our business and could have a negative impact on our ability to manage and
grow our business effectively. Such disruption could have a material adverse impact on our financial performance, financial
condition, and the market price of our stock.
	If we are unable to successful y maintain and evolve our unique corporate culture, offer competitive compensation and
benefits, and a desirable work model, we may be unable to attract and retain highly qualified individuals to support our
business and continued growth. Our work model may not meet the needs and expectations of our employees and may not be
perceived as favorable compared to other companies. We also face risks related to employee engagement and productivity.
Our business is affected by seasonality, which could result in fluctuations in our operating results.
	Our business is affected by the general seasonal trends common to the retail apparel industry. Our annual net revenue
is typical y weighted more heavily toward our fourth fiscal quarter, reflecting our historical strength in sales during the holiday
season, while our operating expenses are more equal y distributed throughout the year. This seasonality, along with other
factors that are beyond our control, including weather conditions and the effects of climate change, could adversely affect our
business and cause our results of operations to fluctuate.
Risks related to our supply chain
Disruptions of our supply chain could have a material adverse effect on our operating and financial results.
	Disruption of our supply chain capabilities due to trade restrictions, political instability, severe weather, natural
disasters, public health crises, war, terrorism, product recal s, labor supply shortages or stoppages, the financial or operational
instability of key suppliers and carriers, changes in diplomatic or trade relationships (including any sanctions, restrictions, and
other responses such as those related to current geopolitical events), or other reasons could impair our ability to distribute
our products. To the extent we are unable to mitigate the likelihood or potential impact of such events, there could be a
material adverse effect on our operating and financial results.
We rely on international suppliers and any significant disruption to our supply chain could impair our ability to procure or
distribute our products.
	We do not manufacture our products or raw materials and rely on suppliers and manufacturers located predominantly
in the Asia Pacific region, including the PRC. We also source other materials used in our products, including items such as
content labels, elastics, buttons, clasps, and drawcords, from suppliers located primarily in this region. Based on cost, during
2022:
	• Approximately 39% of our products were manufactured in Vietnam, 14% in Cambodia, 12% in Sri Lanka, 8% in
	Bangladesh, and 7% in Indonesia, and the remainder in other regions.
	• Approximately 43% of the fabric used in our products originated from Taiwan, 19% from China Mainland, 16% from
	Sri Lanka, and the remainder from other regions.
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The entire apparel industry, including our company, could face supply chain chal enges as a result of the impacts of
	global public health crises, political instability, inflationary pressures, macroeconomic conditions, and other factors, including
	reduced freight availability and increased costs, port disruption, manufacturing facility closures, and related labor shortages
	and other supply chain disruptions.
Our supply chain capabilities may be disrupted due to these or other factors, such as severe weather, natural disasters,
	war or other military conflicts, terrorism, labor supply shortages or stoppages, the financial or operational instability of key
	suppliers or the countries in which they operate, or changes in diplomatic or trade relationships (including any sanctions,
	restrictions, and other responses to geopolitical events). Any significant disruption in our supply chain capabilities could
	impair our ability to procure or distribute our products, which would adversely affect our business and results of operations.
	A relatively smal number of vendors supply and manufacture a significant portion of our products, and losing one or more
	of these vendors could adversely affect our business and results of operations.
Many of the specialty fabrics used in our products are technical y advanced textile products developed and
	manufactured by third parties and may be available, in the short-term, from only one or a limited number of sources. We
	have no long-term contracts with any of our suppliers or manufacturers for the production and supply of our raw materials
	and products, and we compete with other companies for fabrics, other raw materials, and production. During 2022, we
	worked with approximately 45 vendors to manufacture our products and 60 suppliers to provide the fabric for our products.
	Based on cost, during 2022:
• Approximately 56% of our products were manufactured by our top five vendors, the largest of which produced
approximately 15% of our products; and
• Approximately 56% of our fabrics were produced by our top five fabric suppliers, the largest of which produced
approximately 21% of fabric used.
We have experienced, and may in the future experience, a significant disruption in the supply of fabrics or raw materials
	and may be unable to locate alternative suppliers of comparable quality at an acceptable price, or at al . In addition, if we
	experience significant increased demand, or if we need to replace an existing supplier or manufacturer, we may be unable to
	locate additional supplies of fabrics or raw materials or additional manufacturing capacity on terms that are acceptable to us,
	or at al , or we may be unable to locate any supplier or manufacturer with sufficient capacity to meet our requirements or fil
	our orders in a timely manner. Identifying a suitable supplier is an involved process that requires us to become satisfied with
	its quality control, responsiveness and service, financial stability, and labor and other ethical practices. Even if we are able to
	expand existing or find new manufacturing or fabric sources, we may encounter delays in production and added costs as a
	result of the time it takes to train our suppliers and manufacturers in our methods, products, and quality control standards.
Our supply of fabric or manufacture of our products could be disrupted or delayed by economic or political or global
	health conditions, and the related government and private sector responsive actions such as closures, restrictions on product
	shipments, and travel restrictions. Delays related to supplier changes could also arise due to an increase in shipping times if
	new suppliers are located farther away from our markets or from other participants in our supply chain. In addition, freight
	capacity issues continue to persist worldwide as there is much greater demand for shipping and reduced capacity and
	equipment. Any delays, interruption, or increased costs in the supply of fabric or manufacture of our products could have an
	adverse effect on our ability to meet guest demand for our products and result in lower net revenue and income from
	operations both in the short and long term.
	Our business could be harmed if our suppliers and manufacturers do not comply with our Vendor Code of Ethics or
	applicable laws.
While we require our suppliers and manufacturers to comply with our Vendor Code of Ethics, which includes labor,
	health and safety, and environment standards, we do not control their operations. If suppliers or contractors do not comply
	with these standards or applicable laws or there is negative publicity regarding the production methods of any of our
	suppliers or manufacturers, even if unfounded or not specific to our supply chain, our reputation and sales could be adversely
	affected, we could be subject to legal liability, or could cause us to contract with alternative suppliers or manufacturing
	sources.
	The fluctuating cost of raw materials could increase our cost of goods sold.
The fabrics used to make our products include synthetic fabrics whose raw materials include petroleum-based products.
	Our products also include silver and natural fibers, including cotton. Our costs for raw materials are affected by, among other
	things, weather, consumer demand, speculation on the commodities market, the relative valuations and fluctuations of the
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currencies of producer versus consumer countries, and other factors that are general y unpredictable and beyond our control.
Any and al of these factors may be exacerbated by global climate change. In addition, political instability, trade relations,
sanctions, inflationary pressure, or other geopolitical or economic conditions could cause raw material costs to increase and
have an adverse effect on our future margins. Increases in the cost of raw materials, including petroleum or the prices we pay
for silver and our cotton yarn and cotton-based textiles, could have a material adverse effect on our cost of goods sold, results
of operations, financial condition, and cash flows.
If we encounter problems with our distribution system, our ability to deliver our products to the market and to meet guest
expectations could be harmed.
	We rely on our distribution facilities for substantial y al of our product distribution. Our distribution facilities include
computer control ed and automated equipment, which means their operations may be subject to a number of risks related to
security or computer viruses, the proper operation of software and hardware, electronic or power interruptions, or other
system failures. In addition, our operations could also be interrupted by labor difficulties, pandemics, the impacts of climate
change, extreme or severe weather conditions or by floods, fires, or other natural disasters near our distribution centers. If we
encounter problems with our distribution system, our ability to meet guest expectations, manage inventory, complete sales,
and achieve objectives for operating efficiencies could be harmed.
Increasing labor costs and other factors associated with the production of our products in South Asia and South East Asia
could increase the costs to produce our products.
	A significant portion of our products are produced in South Asia and South East Asia and increases in the costs of labor
and other costs of doing business in the countries in this area could significantly increase our costs to produce our products
and could have a negative impact on our operations and earnings. Factors that could negatively affect our business include
labor shortages and increases in labor costs, labor disputes, pandemics, the impacts of climate change, difficulties and
additional costs in transporting products manufactured from these countries to our distribution centers and significant
revaluation of the currencies used in these countries, which may result in an increase in the cost of producing products. Also,
the imposition of trade sanctions or other regulations against products imported by us from, or the loss of "normal trade
relations" status with any country in which our products are manufactured, could significantly increase our cost of products
and harm our business.
Risks related to information security and technology
We may be unable to safeguard against security breaches which could damage our customer relationships and result in
significant legal and financial exposure.
	As part of our normal operations, we receive confidential, proprietary, and personal y identifiable information, including
credit card information, and information about our customers, our employees, job applicants, and other third parties. Our
business employs systems and websites that al ow for the storage and transmission of this information. However, despite our
safeguards and security processes and protections, security breaches could expose us to a risk of theft or misuse of this
information, and could result in litigation and potential liability.
	The retail industry, in particular, has been the target of many recent cyber-attacks. We may not have the resources or
technical sophistication to be able to anticipate or prevent rapidly evolving types of cyber-attacks. Attacks may be targeted at
us, our vendors or customers, or others who have entrusted us with information. In addition, despite taking measures to
safeguard our information security and privacy environment from security breaches, our customers and our business could
stil be exposed to risk. Actual or anticipated attacks may cause us to incur increasing costs including costs to deploy additional
personnel and protection technologies, train employees and engage third party experts and consultants. Advances in
computer capabilities, new technological discoveries or other developments may result in the technology used by us to
protect transaction or other data being breached or compromised. Measures we implement to protect against cyber-attacks
may also have the potential to impact our customers' shopping experience or decrease activity on our websites by making
them more difficult to use.
	Data and security breaches can also occur as a result of non-technical issues including intentional or inadvertent breach
by employees or persons with whom we have commercial relationships that result in the unauthorized release of personal or
confidential information. Any compromise or breach of our security could result in a violation of applicable privacy and other
laws, significant legal and financial exposure, and damage to our brand and reputation or other harm to our business.
	In addition, the increased use of employee-owned devices for communications as wel as work-from-home
arrangements present additional operational risks to our technology systems, including increased risks of cyber-attacks.
Further, like other companies in the retail industry, we have in the past experienced, and we expect to continue to
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experience, cyber-attacks, including phishing, and other attempts to breach, or gain unauthorized access to, our systems. To
date, these attacks have not had a material impact on our operations, but they may have a material impact in the future.
Privacy and data protection laws increase our compliance burden.
	We are subject to a variety of privacy and data protection laws and regulations that change frequently and have
requirements that vary from jurisdiction to jurisdiction. For example, we are subject to significant compliance obligations
under privacy laws such as the General Data Privacy Regulation ("GDPR") in the European Union, the Personal Information
Protection and Electronic Documents Act (“PIPEDA”) in Canada, the California Consumer Privacy Act ("CCPA") modified by the
California Privacy Rights Act (“CPRA”), and the Personal Information Protection Law (“PIPL”) in the PRC. Some privacy laws
prohibit the transfer of personal information to certain other jurisdictions. We are subject to privacy and data protection
audits or investigations by various government agencies. Our failure to comply with these laws subjects us to potential
regulatory enforcement activity, fines, private litigation including class actions, and other costs. Our efforts to comply with
privacy laws may complicate our operations and add to our compliance costs. A significant privacy breach or failure or
perceived failure by us or our third-party service providers to comply with privacy or data protection laws, regulations,
policies or regulatory guidance might have a material y adverse impact on our reputation, business operations and our
financial condition or results of operations.
Disruption of our technology systems or unexpected network interruption could disrupt our business.
	We are increasingly dependent on technology systems and third-parties to operate our e-commerce websites, process
transactions, respond to guest inquiries, manage inventory, purchase, sel and ship goods on a timely basis, and maintain cost-
efficient operations. The failure of our technology systems to operate properly or effectively, problems with transitioning to
upgraded or replacement systems, or difficulty in integrating new systems, could adversely affect our business. In addition,
we have e-commerce websites in the United States, Canada, and international y. Our technology systems, websites, and
operations of third parties on whom we rely, may encounter damage or disruption or slowdown caused by a failure to
successful y upgrade systems, system failures, viruses, computer "hackers", natural disasters, or other causes. These could
cause information, including data related to guest orders, to be lost or delayed which could, especial y if the disruption or
slowdown occurred during the holiday season, result in delays in the delivery of products to our stores and guests or lost
sales, which could reduce demand for our products and cause our sales to decline. The concentration of our primary offices,
two of our distribution centers, and a number of our stores along the west coast of North America could amplify the impact of
a natural disaster occurring in that area to our business, including to our technology systems. In addition, if changes in
technology cause our information systems to become obsolete, or if our information systems are inadequate to handle our
growth, we could lose guests. We have limited back-up systems and redundancies, and our technology systems and websites
have experienced system failures and electrical outages in the past which have disrupted our operations. Any significant
disruption in our technology systems or websites could harm our reputation and credibility, and could have a material adverse
effect on our business, financial condition, and results of operations.
Our technology-based systems that give our customers the ability to shop with us online may not function effectively.
	Many of our customers shop with us through our e-commerce websites and mobile apps. Increasingly, customers are
using tablets and smart phones to shop online with us and with our competitors and to do comparison shopping. We are
increasingly using social media and proprietary mobile apps to interact with our customers and as a means to enhance their
shopping experience. Any failure on our part to provide attractive, effective, reliable, user-friendly e-commerce platforms that
offer a wide assortment of merchandise with rapid delivery options and that continual y meet the changing expectations of
online shoppers could place us at a competitive disadvantage, result in the loss of e-commerce and other sales, harm our
reputation with customers, have a material adverse impact on the growth of our e-commerce business global y and could
have a material adverse impact on our business and results of operations.
Risks related to environmental, social, and governance issues
Climate change, and related legislative and regulatory responses to climate change, may adversely impact our business.
	There is increasing concern that a gradual rise in global average temperatures due to increased concentration of carbon
dioxide and other greenhouse gases in the atmosphere wil cause significant changes in weather patterns around the globe,
an increase in the frequency, severity, and duration of extreme weather conditions and natural disasters, and water scarcity
and poor water quality. These events could adversely impact the cultivation of cotton, which is a key resource in the
production of our products, disrupt the operation of our supply chain and the productivity of our contract manufacturers,
increase our production costs, impose capacity restraints and impact the types of apparel products that consumers purchase.
These events could also compound adverse economic conditions and impact consumer confidence and discretionary
spending. As a result, the effects of climate change could have a long-term adverse impact on our business and results of
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operations. In many countries, governmental bodies are enacting new or additional legislation and regulations to reduce or
mitigate the potential impacts of climate change. If we, our suppliers, or our contract manufacturers are required to comply
with these laws and regulations, or if we choose to take voluntary steps to reduce or mitigate our impact on climate change,
we may experience increased costs for energy, production, transportation, and raw materials, increased capital expenditures,
or increased insurance premiums and deductibles, which could adversely impact our operations. Inconsistency of legislation
and regulations among jurisdictions may also affect the costs of compliance with such laws and regulations. Any assessment
of the potential impact of future climate change legislation, regulations or industry standards, as wel as any international
treaties and accords, is uncertain given the wide scope of potential regulatory change in the countries in which we operate.
Increased scrutiny from investors and others regarding our environmental, social, governance, or sustainability,
responsibilities could result in additional costs or risks and adversely impact our reputation, employee retention, and
wil ingness of customers and suppliers to do business with us.
	Investor advocacy groups, certain institutional investors, investment funds, other market participants, stockholders, and
customers have focused increasingly on the environmental, social and governance ("ESG") or “sustainability” practices of
companies, including those associated with climate change. These parties have placed increased importance on the
implications of the social cost of their investments. If our ESG practices do not meet investor or other industry stakeholder
expectations and standards, which continue to evolve, our brand, reputation and employee retention may be negatively
impacted based on an assessment of our ESG practices. Any sustainability report that we publish or other sustainability
disclosures we make may include our policies and practices on a variety of social and ethical matters, including corporate
governance, environmental compliance, employee health and safety practices, human capital management, product quality,
supply chain management, and workforce inclusion and diversity. It is possible that stakeholders may not be satisfied with our
ESG practices or the speed of their adoption. We could also incur additional costs and require additional resources to monitor,
report, and comply with various ESG practices. Also, our failure, or perceived failure, to meet the standards included in any
sustainability disclosure could negatively impact our reputation, employee retention, and the wil ingness of our customers
and suppliers to do business with us.
Risks related to global economic, political, and regulatory conditions
An economic recession, depression, downturn, periods of inflation, or economic uncertainty in our key markets may
adversely affect consumer discretionary spending and demand for our products.
	Many of our products may be considered discretionary items for consumers. Some of the factors that may influence
consumer spending on discretionary items include general economic conditions, high levels of unemployment, pandemics,
higher consumer debt levels, reductions in net worth based on market declines and uncertainty, home foreclosures and
reductions in home values, fluctuating interest and foreign currency exchange rates and credit availability, government
austerity measures, fluctuating fuel and other energy costs, fluctuating commodity prices, inflationary pressure, tax rates and
general uncertainty regarding the overal future economic environment. Global economic conditions are uncertain and
volatile, due in part to the potential impacts of increasing inflation, the potential impacts of geopolitical uncertainties, and any
potential sanctions, restrictions or responses to those conditions. As global economic conditions continue to be volatile or
economic uncertainty remains, trends in consumer discretionary spending also remain unpredictable and subject to
reductions due to credit constraints and uncertainties about the future. Unfavorable economic conditions may lead
consumers to delay or reduce purchases of our products. Consumer demand for our products may not reach our targets, or
may decline, when there is an economic downturn or economic uncertainty in our key markets. Our sensitivity to economic
cycles and any related fluctuation in consumer demand may have a material adverse effect on our financial condition.
Our financial condition could be adversely affected by global or regional health events such as the COVID-19 pandemic and
related government, private sector, and individual consumer responsive actions.
	The recent COVID-19 pandemic negatively impacted the global economy, disrupted consumer spending and global
supply chains, and created significant volatility and disruption of financial markets. The COVID-19 pandemic and related
government, private sector, and individual consumer responsive actions negatively impacted our business operations, store
traffic, employee availability, supply chain, financial condition, liquidity, and cash flows.
	The occurrence or resurgence of global or regional health events such as the COVID-19 pandemic, and the related
governmental, private sector and individual consumer responses, could contribute to a recession, depression, or global
economic downturn, reduce store traffic and consumer spending, result in temporary or permanent closures of retail
locations, offices, and factories, and could negatively impact the flow of goods. Such events could cause health officials to
impose restrictions and recommend precautions to mitigate the health crisis such as the temporary closure of our stores,
limitations on the number of guests al owed in our stores at any single time, minimum physical distancing requirements, and
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limited operating hours. A health event such as the COVID-19 pandemic could also negatively impact our employees, guests,
and brand by reducing consumer wil ingness to visit stores, mal s, and lifestyle centers, and employee wil ingness to staff our
stores. A global or regional health event may also cause long-term changes to consumer shopping behavior, preferences and
demand for our products that may have a material adverse effect on our business.
	A global or regional health event such as the COVID-19 pandemic could significantly and adversely impact our supply
chain if the factories that manufacture our products, the distribution centers where we manage our inventory, or the
operations of our logistics and other service providers are disrupted, temporarily closed, or experience worker shortages.
Global economic and political conditions could adversely impact our results of operations.
	Uncertain or chal enging global economic and political conditions could impact our performance, including our ability to
successful y expand international y. Global economic conditions could impact levels of consumer spending in the markets in
which we operate, which could impact our sales and profitability. Political unrest, such as the turmoil related to current
geopolitical events and the related sanctions, restrictions, or other responses, could negatively impact our guests and
employees, reduce consumer spending, and adversely impact our business and results of operations.
We may be unable to source and sel our merchandise profitably or at al if new trade restrictions are imposed or existing
restrictions become more burdensome.
	The United States and the countries in which our products are produced or sold have imposed and may impose
additional quotas, duties, tariffs, or other restrictions or regulations, or may adversely adjust prevailing quota, duty, or tariff
levels. The results of any audits or related disputes regarding these restrictions or regulations could have an adverse effect on
our financial statements for the period or periods for which the applicable final determinations are made. Countries impose,
modify, and remove tariffs and other trade restrictions in response to a diverse array of factors, including global and national
economic and political conditions, which make it impossible for us to predict future developments regarding tariffs and other
trade restrictions. Trade restrictions, including tariffs, quotas, embargoes, safeguards, and customs restrictions, could increase
the cost or reduce the supply of products available to us, could increase shipping times, or may require us to modify our
supply chain organization or other current business practices, any of which could harm our business, financial condition, and
results of operations.
	We are dependent on international trade agreements and regulations. The countries in which we produce and sel our
products could impose or increase tariffs, duties, or other similar charges that could negatively affect our results of
operations, financial position, or cash flows.
	Adverse changes in, or withdrawal from, trade agreements or political relationships between the United States and the
PRC, Canada, or other countries where we sel or source our products, could negatively impact our results of operations or
cash flows. Any tariffs imposed between the United States and the PRC could increase the costs of our products. General
geopolitical instability and the responses to it, such as the possibility of sanctions, trade restrictions, and changes in tariffs,
including recent sanctions against the PRC, tariffs imposed by the United States and the PRC, and the possibility of additional
tariffs or other trade restrictions between the United States and Mexico, could adversely impact our business. It is possible
that further tariffs may be introduced, or increased. Such changes could adversely impact our business and could increase the
costs of sourcing our products from the PRC, or could require us to source more of our products from other countries. The
Uyghur Forced Labor Prevention Act and other similar legislation may lead to greater supply chain compliance costs and
delays to us and to our vendors.
	There could be changes in economic conditions in the United Kingdom ("UK") or European Union ("EU"), including due
to the UK's withdrawal from the EU, foreign currency exchange rates, and consumer markets. Our business could be adversely
affected by these changes, including by additional duties on the importation of our products into the UK from the EU and as a
result of shipping delays or congestion.
Changes in tax laws or unanticipated tax liabilities could adversely affect our effective income tax rate and profitability.
	We are subject to the income tax laws of the United States, Canada, and several other international jurisdictions. Our
effective income tax rates could be unfavorably impacted by a number of factors, including changes in the mix of earnings
amongst countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in
tax laws, new tax interpretations and guidance, the outcome of income tax audits in various jurisdictions around the world,
and any repatriation of unremitted earnings for which we have not previously accrued applicable U.S. income taxes and
international withholding taxes.
	Repatriations from our Canadian subsidiaries are not subject to Canadian withholding taxes if such distributions are
made as a return of capital. The extent to which the accumulated earnings of our Canadian subsidiaries can be repatriated as
		39

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a return of capital is dependent on, among other things, the amount of paid-up-capital in our Canadian subsidiaries and
transactions undertaken by our exchangeable shareholders. General y, exchange transactions by our exchangeable
shareholders result in an increase in the amount of paid-up-capital in our Canadian subsidiaries and so increase the amount
which can be repatriated free of Canadian withholding taxes.
	Prior to 2022, we had not accrued for Canadian withholding taxes because the accumulated earnings of, or 'net
investment' in, our Canadian subsidiaries was either indefinitely reinvested or could be repatriated as a return of capital
without payment of withholding tax.
	During 2022, the net investment in our Canadian subsidiaries, which was not indefinitely reinvested, exceeded the paid-
up capital and therefore we accrued for Canadian withholding taxes on the portion of our net investment which we expect to
be unable to repatriate free of withholding tax.
	For 2023, assuming there are no exchange transactions by our exchangeable shareholders, we wil continue to accrue
for Canadian withholding taxes on the accumulated earnings of our Canadian subsidiaries which are not indefinitely
reinvested.
	We engage in a number of intercompany transactions across multiple tax jurisdictions. Although we believe that these
transactions reflect the accurate economic al ocation of profit and that proper transfer pricing documentation is in place, the
profit al ocation and transfer pricing terms and conditions may be scrutinized by local tax authorities during an audit and any
resulting changes may impact our mix of earnings in countries with differing statutory tax rates. At the end of 2020, our
Advance Pricing Arrangement ("APA") with the Internal Revenue Service and the Canada Revenue Agency expired. This APA
stipulated the al ocation of certain profits between the U.S. and Canada. We are currently in the process of negotiating the
renewal of this arrangement and the final agreed upon terms and conditions thereof could impact our effective tax rate.
	Current economic and political conditions make tax rules in any jurisdiction, including the United States and Canada,
subject to significant change. Changes in applicable U.S., Canadian, or other international tax laws and regulations, or their
interpretation and application, including the possibility of retroactive effect, could affect our income tax expense and
profitability, as they did in fiscal 2017 and fiscal 2018 upon passage of the U.S. Tax Cuts and Jobs Act, and in 2020 with the
passage of the Coronavirus Aid, Relief, and Economic Security Act. Certain provisions of the recently enacted Inflation
Reduction Act, including a 15% corporate alternative minimum tax, as wel as the similar 15% global minimum tax under the
Organization for Economic Cooperation and Development's Pil ar Two Global Anti-Base Erosion Rules, may impact our income
tax expense, profitability, and capital al ocation decisions.
Our failure to comply with trade and other regulations could lead to investigations or actions by government regulators
and negative publicity.
	The labeling, distribution, importation, marketing, and sale of our products are subject to extensive regulation by
various federal agencies, including the Federal Trade Commission, Consumer Product Safety Commission and state attorneys
general in the United States, the Competition Bureau and Health Canada in Canada, the State Administration for Market
Regulation of the PRC, General Administration of Customs of the PRC, as wel as by various other federal, state, provincial,
local, and international regulatory authorities in the countries in which our products are distributed or sold. If we fail to
comply with any of these regulations, we could become subject to enforcement actions or the imposition of significant
penalties or claims, which could harm our results of operations or our ability to conduct our business. In addition, any audits
and inspections by governmental agencies related to these matters could result in significant settlement amounts, damages,
fines, or other penalties, divert financial and management resources, and result in significant legal fees. An unfavorable
outcome of any particular proceeding could have an adverse impact on our business, financial condition, and results of
operations. In addition, the adoption of new regulations or changes in the interpretation of existing regulations may result in
significant compliance costs or discontinuation of product sales and could impair the marketing of our products, resulting in
significant loss of net revenue.
	Our international operations are also subject to compliance with the U.S. Foreign Corrupt Practices Act, or FCPA, and
other anti-bribery laws applicable to our operations. In many countries, particularly in those with developing economies, it
may be a local custom that businesses operating in such countries engage in business practices that are prohibited by the
FCPA or other U.S. and international laws and regulations applicable to us. Although we have implemented procedures
designed to ensure compliance with the FCPA and similar laws, some of our employees, agents, or other partners, as wel as
those companies to which we outsource certain of our business operations, could take actions in violation of our policies. Any
such violation could have a material and adverse effect on our business.
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Because a significant portion of our net revenue and expenses are generated in countries other than the United States,
fluctuations in foreign currency exchange rates have affected our results of operations and may continue to do so in the
future.
	The functional currency of our international subsidiaries is general y the applicable local currency. Our consolidated
financial statements are presented in U.S. dol ars. Therefore, the net revenue, expenses, assets, and liabilities of our
international subsidiaries are translated from their functional currencies into U.S. dol ars. Fluctuations in the value of the U.S.
dol ar affect the reported amounts of net revenue, expenses, assets, and liabilities. Foreign currency exchange differences
which arise on translation of our international subsidiaries' balance sheets into U.S. dol ars are recorded as other
comprehensive income (loss), net of tax in accumulated other comprehensive income or loss within stockholders' equity.
	We also have exposure to changes in foreign currency exchange rates associated with transactions which are
undertaken by our subsidiaries in currencies other than their functional currency. Such transactions include intercompany
transactions and inventory purchases denominated in currencies other than the functional currency of the purchasing entity.
As a result, we have been impacted by changes in foreign currency exchange rates and may be impacted for the foreseeable
future. The potential impact of currency fluctuation increases as our international expansion increases.
	Although we use financial instruments to hedge certain foreign currency risks, these measures may not succeed in ful y
offsetting the negative impact of foreign currency rate movements.
	We are exposed to credit-related losses in the event of nonperformance by the counterparties to forward currency
contracts used in our hedging strategies.
Risks related to intel ectual property
Our fabrics and manufacturing technology general y are not patented and can be imitated by our competitors. If our
competitors sel products similar to ours at lower prices, our net revenue and profitability could suffer.
	The intel ectual property rights in the technology, fabrics, and processes used to manufacture our products general y
are owned or control ed by our suppliers and are general y not unique to us. Our ability to obtain intel ectual property
protection for our products is therefore limited. We hold limited patents and exclusive intel ectual property rights in the
technology, fabrics or processes underlying our products. As a result, our current and future competitors are able to
manufacture and sel products with performance characteristics, fabrics and styling similar to our products. Because many of
our competitors have significantly greater financial, distribution, marketing, and other resources than we do, they may be
able to manufacture and sel products based on our fabrics and manufacturing technology at lower prices than we can. If our
competitors sel products similar to ours at lower prices, our net revenue and profitability could suffer.
Our failure or inability to protect our intel ectual property rights could diminish the value of our brand and weaken our
competitive position.
	We currently rely on a combination of patent, copyright, trademark, trade dress, trade secret, and unfair competition
laws, as wel as confidentiality procedures and licensing arrangements, to establish and protect our intel ectual property
rights. The steps we take to protect our intel ectual property rights may not be adequate to prevent infringement of these
rights by others, including imitation of our products and misappropriation of our brand. In addition, any of our intel ectual
property rights may be chal enged, which could result in them being narrowed in scope or declared invalid or unenforceable,
or our intel ectual property protection may be unavailable or limited in some international countries where laws or law
enforcement practices may not protect our intel ectual property rights as ful y as in the United States or Canada, and it may
be more difficult for us to successful y chal enge the use of our intel ectual property rights by other parties in these countries.
If we fail to protect and maintain our intel ectual property rights, the value of our brand could be diminished, and our
competitive position may suffer.
Our trademarks, patents, and other proprietary rights could potential y conflict with the rights of others and we may be
prevented from sel ing some of our products.
	Our success depends in large part on our brand image. We believe that our trademarks, patents, and other proprietary
rights have significant value and are important to identifying and differentiating our products from those of our competitors
and creating and sustaining demand for our products. We have applied for and obtained some United States, Canada, and
international trademark registrations and patents, and wil continue to evaluate additional trademarks and patents as
appropriate. However, some or al of these pending trademark or patent applications may not be approved by the applicable
governmental authorities. Moreover, even if the applications are approved, third parties may seek to oppose or otherwise
chal enge these applications or registrations. Additional y, we may face obstacles as we expand our product line and the
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geographic scope of our sales and marketing. Third parties may assert intel ectual property claims against us, particularly as
we expand our business and the number of products we offer. Our defense of any claim, regardless of its merit, could be
expensive and time consuming and could divert management resources. Successful infringement claims against us could
result in significant monetary liability or prevent us from sel ing some of our products. In addition, resolution of claims may
require us to redesign our products, license rights from third parties, or cease using those rights altogether. Any of these
events could harm our business and cause our results of operations, liquidity, and financial condition to suffer.
We have been, and in the future may be, sued by third parties for al eged infringement of their proprietary rights.
	There is considerable patent and other intel ectual property development activity in our market, and litigation, based on
al egations of infringement or other violations of intel ectual property, is frequent in the fitness and technology industries.
Furthermore, it is common for individuals and groups to purchase patents and other intel ectual property assets for the
purpose of making claims of infringement to extract settlements from companies like ours. Our use of third-party content,
including music content, software, and other intel ectual property rights may be subject to claims of infringement or
misappropriation. We cannot guarantee that our internal y developed or acquired technologies and content do not or wil not
infringe the intel ectual property rights of others. From time to time, our competitors or other third parties may claim that we
are infringing upon or misappropriating their intel ectual property rights, and we may be found to be infringing upon such
rights. Any claims or litigation could cause us to incur significant expenses and, if successful y asserted against us, could
require that we pay substantial damages or ongoing royalty payments, prevent us from offering our platform or services or
using certain technologies, force us to implement expensive work-arounds, or impose other unfavorable terms. We expect
that the occurrence of infringement claims is likely to grow as the market for fitness products and services grows and as we
introduce new and updated products and offerings. Accordingly, our exposure to damages resulting from infringement claims
could increase and this could further exhaust our financial and management resources. Any of the foregoing could prevent us
from competing effectively and could have an adverse effect on our business, financial condition, and operating results.
Risks related to legal and governance matters
We are subject to periodic claims and litigation that could result in unexpected expenses and could ultimately be resolved
against us.
	From time to time, we are involved in litigation and other proceedings, including matters related to product liability
claims, stockholder class action and derivative claims, commercial disputes and intel ectual property, as wel as trade,
regulatory, employment, and other claims related to our business. Any of these proceedings could result in significant
settlement amounts, damages, fines, or other penalties, divert financial and management resources, and result in significant
legal fees. An unfavorable outcome of any particular proceeding could exceed the limits of our insurance policies or the
carriers may decline to fund such final settlements and/or judgments and could have an adverse impact on our business,
financial condition, and results of operations. In addition, any proceeding could negatively impact our reputation among our
guests and our brand image.
Our business could be negatively affected as a result of actions of activist stockholders or others.
	We may be subject to actions or proposals from stockholders or others that may not align with our business strategies
or the interests of our other stockholders. Responding to such actions can be costly and time-consuming, disrupt our business
and operations, and divert the attention of our board of directors, management, and employees from the pursuit of our
business strategies. Such activities could interfere with our ability to execute our strategic plan. Activist stockholders or others
may create perceived uncertainties as to the future direction of our business or strategy which may be exploited by our
competitors and may make it more difficult to attract and retain qualified personnel and potential guests, and may affect our
relationships with current guests, vendors, investors, and other third parties. In addition, a proxy contest for the election of
directors at our annual meeting would require us to incur significant legal fees and proxy solicitation expenses and require
significant time and attention by management and our board of directors. The perceived uncertainties as to our future
direction also could affect the market price and volatility of our securities.
Anti-takeover provisions of Delaware law and our certificate of incorporation and bylaws could delay and discourage
takeover attempts that stockholders may consider to be favorable.
	Certain provisions of our certificate of incorporation and bylaws and applicable provisions of the Delaware General
Corporation Law may make it more difficult or impossible for a third-party to acquire control of us or effect a change in our
board of directors and management. These provisions include:
	• the classification of our board of directors into three classes, with one class elected each year;
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• prohibiting cumulative voting in the election of directors;
• the ability of our board of directors to issue preferred stock without stockholder approval;
• the ability to remove a director only for cause and only with the vote of the holders of at least 66 2/3% of our voting
stock;
• a special meeting of stockholders may only be cal ed by our chairman or Chief Executive Officer, or upon a
resolution adopted by an affirmative vote of a majority of the board of directors, and not by our stockholders;
• prohibiting stockholder action by written consent; and
• our stockholders must comply with advance notice procedures in order to nominate candidates for election to our
board of directors or to place stockholder proposals on the agenda for consideration at any meeting of our
stockholders.
In addition, we are governed by Section 203 of the Delaware General Corporation Law which, subject to some specified
	exceptions, prohibits "business combinations" between a Delaware corporation and an "interested stockholder," which is
	general y defined as a stockholder who becomes a beneficial owner of 15% or more of a Delaware corporation's voting stock,
	for a three-year period fol owing the date that the stockholder became an interested stockholder. Section 203 could have the
	effect of delaying, deferring, or preventing a change in control that our stockholders might consider to be in their best
	interests.
	ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The fol owing table provides information regarding our purchases of shares of our common stock during the first
	quarter of 2023 related to our stock repurchase program:
					Maximum Dollar
				Total Number of	Value of Shares
				Shares Purchased	that May Yet Be
		Total Number of	Average	as Part of Publicly	Purchased Under
		Shares	Price Paid per	Announced Plans	the Plans or
	Period(1)	Purchased(2)	Share	or Programs(2)	Programs(2)
	January 30, 2023 - February 26, 2023					83,681 $	313.46	83,681 $	717,580,985
	February 27, 2023 - April 2, 2023					75,404	303.82	75,404	694,671,865
	April 3, 2023 - April 30, 2023					132,626	369.32	132,626	645,689,842
	Total					291,711				291,711
	__________(1)
Monthly information is presented by reference to our fiscal periods during our first quarter of 2023.
	(2)	On March 23, 2022, our board of directors approved a stock repurchase program for up to $1.0 bil ion of our common shares on the open market or in
privately negotiated transactions. The repurchase plan has no time limit and does not require the repurchase of a minimum number of shares.
Common shares repurchased on the open market are at prevailing market prices, including under plans complying with the provisions of Rule 10b5-1
and Rule 10b-18 of the Securities Exchange Act of 1934. The timing and actual number of common shares to be repurchased wil depend upon market
conditions, eligibility to trade, and other factors. The authorized value of shares available to be repurchased under this program excludes the cost of
commissions and excise taxes.
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	Table of Contents
The fol owing table provides information regarding our purchases of shares of our common stock during the first
	quarter of 2023 related to our Employee Share Purchase Plan:
					Maximum
				Total Number of	Number of Shares
				Shares Purchased	that May Yet Be
		Total Number of	Average	as Part of Publicly	Purchased Under
		Shares	Price Paid per	Announced Plans	the Plans or
	Period(1)	Purchased(2)	Share	or Programs(2)	Programs(2)
	January 30, 2023 - February 26, 2023					8,107 $	321.18	8,107	4,491,672
	February 27, 2023 - April 2, 2023					12,366	322.78	12,366	4,479,306
	April 3, 2023 - April 30, 2023					7,199	370.96	7,199	4,472,107
	Total					27,672				27,672
	__________(1)
Monthly information is presented by reference to our fiscal periods during our first quarter of 2023.
	(2)	The ESPP was approved by our board of directors and stockholders in September 2007. Al shares purchased under the ESPP are purchased on the
Nasdaq Global Select Market (or such other stock exchange as we may designate). Unless our board terminates the ESPP earlier, it wil continue until
al shares authorized for purchase have been purchased. The maximum number of shares authorized to be purchased under the ESPP was 6,000,000.
Excluded from this disclosure are shares withheld to settle statutory employee tax withholding related to the vesting of
	stock-based compensation awards.
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Table of Contents

ITEM 6. EXHIBITS

Incorporated by Reference

ExhibitFiledExhibitFiling

No.

Exhibit Title

Herewith

Form

No.

File No.

Date

31.1

Certification of principal executive officer Pursuant to

Exchange Act Rule 13a-14(a)

31.2

Certification of principal financial and accounting officer

Pursuant to Exchange Act Rule 13a-14(a)

32.1*

Certification of principal executive officer and principal

financial and accounting officer Pursuant to 18 U.S.C.

Section 1350 as Adopted Pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

101

The fol owing unaudited interim consolidated financial

statements from the Company's Quarterly Report on Form 10-

Q for the fiscal quarter ended April 30, 2023, formatted in

iXBRL: (i) Consolidated Balance Sheets, (i ) Consolidated

Statements of Operations and Comprehensive Income, (i i)

Consolidated Statements of Stockholders' Equity, (iv)

Consolidated Statements of Cash Flows (v) Notes to the

Unaudited Interim Consolidated Financial Statements

104

Cover Page Interactive Data File (formatted in iXBRL and

contained in Exhibit 101)

Furnished herewith.

		Table of Contents
SIGNATURES
	Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
		signed on its behalf by the undersigned, thereunto duly authorized.

			lululemon athletica inc.
			By: /s/ MEGHAN FRANK
			Meghan FrankChief Financial Officer(principal financial and accounting officer)
		Dated: June 1, 2023
				46

Exhibit 31.1
	I, Calvin McDonald, certify that:
		1. I have reviewed this quarterly report on Form 10-Q of lululemon athletica inc.;
		2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
	material fact necessary to make the statements made, in light of the circumstances under which such statements were made,
	not misleading with respect to the period covered by this report;
		3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
	present in al material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
	periods presented in this report;
		4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
	procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
	defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
			(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
	designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
	subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being
	prepared;
			(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting
	to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
	preparation of financial statements for external purposes in accordance with general y accepted accounting principles;
			(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
	our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
	report based on such evaluation; and
			(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
	during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has
	material y affected, or is reasonably likely to material y affect, the registrant’s internal control over financial reporting; and
		5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
	over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons
	performing the equivalent functions):
			(a) Al significant deficiencies and material weaknesses in the design or operation of internal control over financial
	reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report
	financial information; and
			(b) Any fraud, whether or not material, that involves management or other employees who have a significant role
	in the registrant’s internal control over financial reporting.

				By: /s/ CALVIN MCDONALD
					Calvin McDonaldChief Executive Officer and Director(principal executive officer)
	Date: June 1, 2023

Exhibit 31.2
	I, Meghan Frank, certify that:
		1. I have reviewed this quarterly report on Form 10-Q of lululemon athletica inc.;
		2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
	material fact necessary to make the statements made, in light of the circumstances under which such statements were made,
	not misleading with respect to the period covered by this report;
		3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
	present in al material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
	periods presented in this report;
		4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
	procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
	defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
			(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
	designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
	subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being
	prepared;
			(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting
	to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
	preparation of financial statements for external purposes in accordance with general y accepted accounting principles;
			(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
	our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
	report based on such evaluation; and
			(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
	during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has
	material y affected, or is reasonably likely to material y affect, the registrant’s internal control over financial reporting; and
		5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
	over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons
	performing the equivalent functions):
			(a) Al significant deficiencies and material weaknesses in the design or operation of internal control over financial
	reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report
	financial information; and
			(b) Any fraud, whether or not material, that involves management or other employees who have a significant role
	in the registrant’s internal control over financial reporting.

				By: /s/ MEGHAN FRANK
					Meghan FrankChief Financial Officer(principal financial and accounting officer)
	Date: June 1, 2023

Exhibit 32.1
	CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
		AS ADOPTED PURSUANT TO SECTION 906 OF
		THE SARBANES-OXLEY ACT OF 2002
			In connection with the Quarterly Report of lululemon athletica inc. (the “Company”) on Form 10-Q for the first quarter
				of fiscal 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the
				undersigned officers of the Company certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-
				Oxley Act of 2002, that, to such officer’s knowledge:
					(1) The Report ful y complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
				1934; and
					(2) The information contained in the Report fairly presents, in al material respects, the financial condition and
				results of operations of the Company.

						By: /s/ CALVIN MCDONALD
							Calvin McDonaldChief Executive Officer and Director(principal executive officer)
				Date: June 1, 2023

						By: /s/ MEGHAN FRANK
							Meghan FrankChief Financial Officer(principal financial and accounting officer)
				Date: June 1, 2023
			The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the
				Report or as a separate disclosure document.