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 lululemon athletica inc. Announces Second Quarter Fiscal 2017 Results
   Thursday, August 31, 2017 4:05:01 PM ET

lululemon athletica inc. (LULU ) today announced financial results for the second quarter ended July 30, 2017.

The Company reported diluted earnings per share of $0.36 for the second quarter of fiscal 2017. Excluding the impact of the ivivva restructuring that was announced on June 1, 2017, the Company reported adjusted diluted earnings per share of $0.39.

The summary below provides both GAAP and adjusted non-GAAP financial measures. In connection with the restructuring of its ivivva operations, the Company recognized pre-tax costs totaling $5.4 million in the second quarter of fiscal 2017. The adjusted financial measures exclude the impact of the ivivva restructuring and the related tax effects, and also exclude certain discrete tax items which were recognized during the second quarter of fiscal 2016.

For the second quarter ended July 30, 2017:

-- Net revenue was $581.1 million, an increase of 13% compared to the second quarter of fiscal 2016. On a constant dollar basis, net revenue increased 13%.

-- Total comparable sales increased 7%, or increased by 7% on a constant dollar basis. -- Comparable store sales increased 2%, or increased by 2% on a constant dollar basis.

-- Direct to consumer net revenue increased 29%, or increased 30% on a constant dollar basis. During the quarter the Company held an online warehouse sale. Excluding the impact of this sale, direct to consumer net revenue increased 15%, or increased 16% on a constant dollar basis.

-- Gross profit was $297.4 million, an increase of 17% compared to the second quarter of fiscal 2016. Adjusted gross profit was $299.7 million, an increase of 18%.

-- Gross margin was 51.2%, an increase of 180 basis points compared to the second quarter of fiscal 2016. Adjusted gross margin was 51.6%, an increase of 220 basis points.

-- Income from operations was $68.7 million, a decrease of 7% compared to the second quarter of fiscal 2016. Adjusted income from operations increased by $0.2 million to $74.1 million.

-- Operating margin was 11.8%, a decrease of 260 basis points compared to the second quarter of fiscal 2016. Adjusted operating margin was 12.8%, a decrease of 160 basis points.

-- Income tax expense was $20.8 million compared to $20.9 million in the second quarter of fiscal 2016 and the effective tax rate was 29.9% compared to 28.1%. The adjusted effective tax rate was 29.6% compared to 30.5% in the second quarter of fiscal 2016.

-- Diluted earnings per share were $0.36 compared to $0.39 in the second quarter of fiscal 2016. Adjusted diluted earnings per share were $0.39 compared to $0.38 for the second quarter of fiscal 2016.

-- The Company repurchased 1.5 million shares of its own common stock at an average cost of $52.93 per share.

The Company ended the second quarter of fiscal 2017 with $721.2 million in cash and cash equivalents compared to $535.3 million at the end of the second quarter of fiscal 2016. Inventories at the end of the second quarter of fiscal 2017 increased by 14% to $316.4 million compared to $277.3 million at the end of the second quarter of fiscal 2016. The Company ended the quarter with 421 stores.

Laurent Potdevin, CEO, lululemon, commented: "Our performance reflects the growing global consumer response to lululemon’s unique position as the leading brand that defines an active, mindful lifestyle. Through continuing to deliver category-defining product innovation, we are creating experiences that our guests, both existing and new, desire. This strong brand momentum reinforces my confidence in our long-term strategy."

Mr. Potdevin added: "The acceleration that we have seen across the business in the second quarter enables us to take another positive step on our path towards achieving $4 billion in revenue by 2020. Finally, I would also like to express my gratitude for the constant energy and determination of our teams and ambassadors, who powerfully bring our brand to life."

Updated Outlook

In connection with the restructuring of the ivivva operations, we expect to recognize total pre-tax costs of between $50.0 million and $60.0 million in fiscal 2017, inclusive of $23.2 million recognized during the first two quarters of fiscal 2017. This primarily relates to long-lived asset impairment and lease termination costs.

For the third quarter of fiscal 2017, we expect net revenue to be in the range of $605 million to $615 million based on a total comparable sales increase in the mid-single digits on a constant dollar basis. Diluted earnings per share are expected to be in the range of $0.33 to $0.35 for the quarter. Excluding the impact of the ivivva restructuring, we expect adjusted diluted earnings per share to be in the range of $0.50 to $0.52 for the quarter. This guidance assumes 136.3 million diluted weighted-average shares outstanding and a 32.2% tax rate, or 30.4% excluding the tax effect of the ivivva restructuring. The guidance does not reflect potential future repurchases of the Company’s shares.

For the full fiscal 2017, we now expect net revenue to be in the range of $2.545 billion to $2.595 billion based on a total comparable sales increase in the low-single digits on a constant dollar basis. Diluted earnings per share are expected to be in the range of $2.04 to $2.11 for the full year. Excluding the impact of the ivivva restructuring, we expect adjusted diluted earnings per share to be in the range of $2.35 to $2.42 for the year. This guidance assumes 136.3 million diluted weighted-average shares outstanding and a 30.8% tax rate, or 30.3% excluding the tax effect of the ivivva restructuring. The guidance does not reflect potential future repurchases of the Company’s shares.

The guidance and outlook forward-looking statements made in this press release are based on management’s expectations as of the date of this press release and the Company undertakes no duty to update or to continue to provide information with respect to any forward-looking statements or risk factors, whether as a result of new information or future events or circumstances or otherwise. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of risks and uncertainties, including those stated below.

Conference Call Information

A conference call to discuss second quarter results is scheduled for today, August 31, 2017, at 4:30 p.m. Eastern time. Those interested in participating in the call are invited to dial 1-800-319-4610 or 1-604-638-5340, if calling internationally, approximately 10 minutes prior to the start of the call. A live webcast of the conference call will be available online at: http://investor.lululemon.com/events.cfm . A replay will be made available online approximately two hours following the live call for a period of 30 days.

About lululemon athletica inc.

lululemon athletica inc. (LULU ) is a healthy lifestyle inspired athletic apparel company for yoga, running, training, and most other sweaty pursuits, with products that create transformational experiences for people to live happy, healthy, fun lives. Setting the bar in technical fabrics and functional designs, lululemon works with yogis and athletes in local communities for continuous research and product feedback. For more information, visit www.lululemon.com.

Non-GAAP Financial Measures

Constant dollar changes in net revenue, total comparable sales, comparable store sales, direct to consumer net revenue, and direct to consumer net revenue excluding the online warehouse sale, and the adjusted financial results, are non-GAAP financial measures.

A constant dollar basis assumes the average foreign exchange rates for the period remained constant with the average foreign exchange rates for the same period of the prior year. We provide constant dollar changes in net revenue, total comparable sales, comparable store sales, direct to consumer net revenue, and direct to consumer net revenue excluding the online warehouse sale because we use these measures to understand the underlying growth rate of net revenue excluding the impact of changes in foreign exchange rates. We believe that disclosing these measures on a constant dollar basis is useful to investors because it enables them to better understand the level of growth of our business.

Adjusted gross profit, gross margin, income from operations, operating margin, effective tax rates, and diluted earnings per share exclude the costs recognized in connection with the restructuring of our ivivva operations, its related tax effects, and certain discrete items related to our transfer pricing arrangements and taxes on repatriation of foreign earnings. We believe these adjusted financial measures are useful to investors as the adjustments do not directly relate to our ongoing business operations and therefore do not contribute to a meaningful evaluation of the trend in our operating performance. Furthermore, we do not believe the adjustments are reflective of our expectations of our future operating performance and believe these non-GAAP measures are useful to investors because of their comparability to our historical information.

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. For more information on these non-GAAP financial measures, please see the section captioned "Reconciliation of Non-GAAP Financial Measures" included in the accompanying financial tables, 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.

Forward-Looking Statements:

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risks, uncertainties and assumptions, such as statements regarding our future financial condition or results of operations and our prospects and strategies for future growth. In many cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "outlook," "believes," "intends," "estimates," "predicts," "potential" or the negative of these terms or other comparable terminology. These forward-looking statements also include our guidance and outlook statements. These statements are based on management’s current expectations but they involve a number of risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of risks and uncertainties, which include, without limitation: our ability to maintain the value and reputation of our brand; the acceptability of our products to our guests; our highly competitive market and increasing competition; our reliance on and limited control over third-party suppliers to provide fabrics for and to produce our products; an economic downturn or economic uncertainty in our key markets; increasing product costs and decreasing selling prices; our ability to anticipate consumer preferences and successfully develop and introduce new, innovative and updated products; our ability to accurately forecast customer demand for our products; our ability to safeguard against security breaches with respect to our information technology systems; any material disruption of our information systems; our ability to have technology-based systems function effectively and grow our e-commerce business globally; the fluctuating costs of raw materials; our ability to expand internationally in light of our limited operating experience and limited brand recognition in new international markets; our ability to deliver our products to the market and to meet customer expectations if we have problems with our distribution system; imitation by our competitors; higher than anticipated costs and our ability to realize the benefits associated with the restructuring of our ivivva business; our ability to protect our intellectual property rights; changes in tax laws or unanticipated tax liabilities, capital or financing needs in the United States, or our intentions with respect to the reinvestment of foreign earnings; our ability to manage our growth and the increased complexity of our business effectively; our ability to cancel store leases if an existing or new store is not profitable; increasing labor costs and other factors associated with the production of our products in South and South East Asia; our ability to successfully open new store locations in a timely manner; our ability to source our merchandise profitably or at all; our ability to comply with trade and other regulations; the continued service of our senior management; seasonality; fluctuations in foreign currency exchange rates; the operations of many of our suppliers are subject to international and other risks; our exposure to various types of litigation; actions of activist stockholders; and other risks and uncertainties set out in filings made from time to time with the United States Securities and Exchange Commission and available at www.sec.gov, including, without limitation, our most recent reports on Form 10-K and Form 10-Q. You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. The forward-looking statements made herein speak only as of the date of this press release and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances, except as may be required by law.

                                                                                                                                                                     
lululemon athletica inc.
Condensed Consolidated Statements of Operations
Unaudited; Expressed in thousands, except per share amounts
                                                                                                                                                                                                                                                   
                                                                                                                                         Quarter Ended                                                                                                                                             Two Quarters Ended
                                                                                       -----------------------------------------------------------------------------------------------------------------                                          ---------------------------------------------------------------------------------------------------------------------
                                                                                                  July 30, 2017                          July 31, 2016                                                                  July 30, 2017                            July 31, 2016
                                                                                       ----------------------------------                                          -------------------------------------                                          ------------------------------------                                          ---------------------------------------
Net revenue                                                                               $ 581,054                                                                      $ 514,520                                                                   $ 1,101,361                                                                      $ 1,010,036
Costs of goods sold                                                                         283,632                                                     260,359                                                    547,044                                                       516,744  
                                                                                       ---------------------------------                                           ------------------------------------                                           -----------------------------------                                           --------------------------------------
Gross profit                                                                                297,422                                                                        254,161                                                                       554,317                                                                          493,292
   As a percent of net revenue                                                                 51.2                    %                                                      49.4                    %                                                     50.3                    %                                                        48.8                    %
Selling, general and administrative expenses                                                225,524                                                                        180,202                                                                       424,665                                                                          361,744
   As a percent of net revenue                                                                 38.8                    %                                                      35.0                    %                                                     38.6                    %                                                        35.8                    %
Asset impairments and restructuring costs                                                     3,186                                                                 --                                                                        15,517                                                                   --
   As a percent of net revenue                                                                  0.6                    %                                            --                    %                                                      1.3                    %                                              --                    %
                                                                                       ---------------------------------                                           ------------------------------------                                           -----------------------------------                                           --------------------------------------
Income from operations                                                                       68,712                                                                         73,959                                                                       114,135                                                                          131,548
   As a percent of net revenue                                                                 11.8                    %                                                      14.4                    %                                                     10.4                    %                                                        13.0                    %
Other income (expense), net                                                                     812                                                         578                                                      1,719                                                            92  
                                                                                       ---------------------------------                                           ------------------------------------                                           -----------------------------------                                           --------------------------------------
Income before income tax expense                                                             69,524                                                                         74,537                                                                       115,854                                                                          131,640
Income tax expense                                                                           20,813                                                      20,912                                                     35,897                                                        32,679  
                                                                                       ---------------------------------                                           ------------------------------------                                           -----------------------------------                                           --------------------------------------
Net income                                                                                $  48,711                                                   $  53,625                                                $    79,957                                                   $    98,961  
                                                                                       ==== ======= ====================                                           ======= ======= ====================                                           ==== ========= ====================                                           ======= ========= ====================
                                                                                                                                                                                                                                                                                                                                 
Basic earnings per share                                                                  $    0.36                                                                      $    0.39                                                                   $      0.59                                                                      $      0.72
Diluted earnings per share                                                                $    0.36                                                                      $    0.39                                                                   $      0.58                                                                      $      0.72
Basic weighted-average shares outstanding                                                   136,171                                                                        136,987                                                                       136,604                                                                          137,071
Diluted weighted-average shares outstanding                                                 136,303                                                                        137,229                                                                       136,747                                                                          137,309
                                                                                                                                                                                                                                                                                                                                                   
                                                                                              
lululemon athletica inc.
Condensed Consolidated Balance Sheets
Unaudited; Expressed in thousands
                                                                                                                                                                            
                                                                                                           July 30,                                                                   January 29,
                                                                                                             2017                                                                        2017
                                                                                             ---------------------------------                                             ------------------------------
ASSETS
Current assets
   Cash and cash equivalents                                                                    $   721,212                                                                         $              734,846
   Inventories                                                                                      316,368                                                                                        298,432
   Prepaid and receivable income taxes                                                               66,161                                                                                         81,190
   Other current assets                                                                              67,281                                                                      48,269
                                                                                             -----------------------------------                                           --------------------------------
Total current assets                                                                              1,171,022                                                                                      1,162,737
Property and equipment, net                                                                         426,961                                                                                        423,499
Goodwill and intangible assets, net                                                                  24,749                                                                                         24,557
Deferred income taxes and other non-current assets                                                   64,191                                                                      46,748
                                                                                             -----------------------------------                                           --------------------------------
Total assets                                                                                    $ 1,686,923                                                      $            1,657,541
                                                                                             ==== ========= ====================                                           ========== ====================
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
   Accounts payable                                                                             $    19,049                                                                         $               24,846
   Accrued inventory liabilities                                                                     21,292                                                                                          8,601
   Accrued compensation and related expenses                                                         47,920                                                                                         55,238
   Income taxes payable                                                                               6,519                                                                                         30,290
   Unredeemed gift card liability                                                                    56,170                                                                                         70,454
   Other accrued liabilities                                                                         73,341                                                                      52,561
                                                                                             -----------------------------------                                           --------------------------------
Total current liabilities                                                                           224,291                                                                                        241,990
Deferred income tax liability                                                                         7,668                                                                                          7,262
Other non-current liabilities                                                                        57,155                                                                                         48,316
Stockholders’ equity                                                                              1,397,809                                                                   1,359,973
                                                                                             -----------------------------------                                           --------------------------------
Total liabilities and stockholders’ equity                                                      $ 1,686,923                                                      $            1,657,541
                                                                                             ==== ========= ====================                                           ========== ====================
                                                                                                                                                                                       
                                                    
lululemon athletica inc.
Condensed Consolidated Statements of Cash Flows
Unaudited; Expressed in thousands
                                                                                            
                                                                                                                                         Two Quarters Ended
                                                                                           --------------------------------------------------------------------------------------------------------------
                                                                                                      July 30, 2017                         July 31, 2016
                                                                                           ----------------------------------                                          ----------------------------------
Cash flows from operating activities
Net income                                                                                    $  79,957                                                                   $  98,961
   Items not affecting cash                                                                      71,872                                                                      47,809
   Changes in operating assets and liabilities                                                  (49,791 )                                                                   (45,577 )
                                                                                           ---------------------------------                                           ---------------------------------
Net cash provided by operating activities                                                       102,038                                                                     101,193
Net cash used in investing activities                                                           (49,889 )                                                                   (71,261 )
Net cash used in financing activities                                                           (91,910 )                                                                   (25,082 )
Effect of exchange rate changes on cash                                                          26,127                                                   29,018  
                                                                                           ---------------------------------                                           ---------------------------------
(Decrease) increase in cash and cash equivalents                                                (13,634 )                                                                    33,868
Cash and cash equivalents, beginning of period                                                  734,846                                                  501,482  
                                                                                           ---------------------------------                                           ---------------------------------
Cash and cash equivalents, end of period                                                      $ 721,212                                                $ 535,350  
                                                                                           ==== ======= ====================                                           ==== ======= ====================
                                                                                                                                                                                     
 
lululemon athletica inc.
Reconciliation of Non-GAAP Financial Measures
Unaudited; Expressed in thousands, except per share amounts
 

Constant dollar changes in net revenue, total comparable sales, comparable store sales, direct to consumer net revenue, and direct to consumer net revenue excluding the online warehouse sale

The below changes in net revenue, total comparable sales, comparable store sales, direct to consumer net revenue, and direct to consumer net revenue excluding the online warehouse sale show the net change for the second quarter of fiscal 2017 compared to the second quarter of fiscal 2016.

                                                                                                                              
                                                                                             Net Revenue                                                 Total                                                 Comparable                                               Direct to                                                  Direct to
                                                                                                                                                      Comparable                                             Store Sales(2)                                           Consumer Net                                               Consumer Net
                                                                                                                                                      Sales(1,2)                                                                                                         Revenue                                                    Revenue
                                                                                                                                                                                                                                                                                                                                   Excluding
                                                                                                                                                                                                                                                                                                                                      the
                                                                                                                                                                                                                                                                                                                                    Online
                                                                                                                                                                                                                                                                                                                                   Warehouse
                                                                                                                                                                                                                                                                                                                                     Sale
                                                                                           --------------                                           --------------                                           --------------                                           ------------                                           --------------------
Increase (decrease)                                                                                   13%                                                       7%                                                       2%                                                    29%                                                            15%
Adjustments due to foreign exchange rate changes                                           --                                           --                                           --                                                      1                                                              1
                                                                                           --------------                                           --------------                                           --------------                                           ------------                                           --------------------
Increase (decrease) in constant dollars                                                               13%                                                       7%                                                       2%                                                    30%                                                            16%
                                                                                                                                                                                                                                                                                                                              
__________
(1)   Total comparable sales includes comparable store sales and direct to
                         consumer sales.
(2)                      Comparable store sales reflects net revenue from company-operated
                         stores that have been open for at least 12 months, or open for at
                         least 12 months after being significantly expanded.
                          
 
Adjusted financial measures
 

The following table reconciles adjusted financial measures with the most directly comparable measures calculated in accordance with GAAP:

                                                                                                                                                                                   
                                                                                                                                              Quarter Ended                                                                                                                                                                            Quarter Ended
                                                                                                                                              July 30, 2017                                                                                                                                                                            July 31, 2016
                                                                                  -----------------------------------------------------------------------------------------------------------------------                                                       ---------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     GAAP Results         Adjustments         Adjusted                                                 GAAP Results               Adjustments                    Adjusted
                                                                                                                                                                                                           Results                                                                                                                                                                                        Results
                                                                                                                                                                                                         (Non-GAAP)                                                                                                                                                                                     (Non-GAAP)
                                                                                  ---------------                                             -----------                                             -------------                                             ---------------                                             ------------------------                                             ----------------------
Gross profit(1)                                                                      $ 297,422                                                  $ 2,244                                                 $ 299,666                                                  $ 254,161                                                      $ --                                                 $    254,161
Gross margin(1)                                                                           51.2 %                                                    0.4 %                                                    51.6 %                                                     49.4 %                                                      -- %                                                       49.4 %
Income from operations(1,2)                                                             68,712                                                    5,430                                                    74,142                                                     73,959                                                        --                                                       73,959
Operating margin(1,2)                                                                     11.8 %                                                    1.0 %                                                    12.8 %                                                     14.4 %                                                      -- %                                                       14.4 %
Income before income tax expense(1,2,3)                                                 69,524                                                    5,430                                                    74,954                                                     74,537                                                                   270                                                       74,807
Income tax expense(3,4)                                                                 20,813                                                    1,390                                                    22,203                                                     20,912                                                                 1,926                                                       22,838
Effective tax rate(3,4)                                                                   29.9 %                                                   (0.3 )%                                                   29.6 %                                                     28.1 %                                                                 2.4 %                                                       30.5 %
Diluted earnings per share(1,2,3,4)                                                  $    0.36                                                  $  0.03                                                 $    0.39                                                  $    0.39                                                      $          (0.01 )                                               $       0.38
                                                                                                                                                                                                                                                                                                                                                                                                      
__________
(1)   During the second quarter of fiscal 2017, we recognized costs in
                         cost of goods sold totaling $2.2 million to reduce the carrying
                         value of certain ivivva branded inventories to their estimated net
                         realizable value, to record the expected net loss on certain
                         committed inventory purchases, and to record accelerated
                         depreciation.
(2)                      During the second quarter of fiscal 2017, we recognized costs in
                         operating expenses totaling $3.2 million for severance, lease
                         terminations and other costs related to the restructuring of our
                         ivivva operations.
(3)                      The adjustments in the second quarter of fiscal 2016 relate to our
                         transfer pricing arrangements, the associated repatriation of
                         foreign earnings, and net interest costs. These adjustments were
                         recorded in income tax expense and other income (expense), net.
(4)                      The adjustment to income tax expense for the second quarter of
                         fiscal 2017 represents the tax effect of the ivivva related
                         restructuring adjustments, calculated based on the expected annual
                         tax rate of the applicable tax jurisdictions.
                          

Please refer to Notes 6 and 7 to the unaudited interim consolidated financial statements included in Item 1 of Part I of our Report on Form 10-Q to be filed with the SEC on or about August 31, 2017 for further explanation as to the nature of these items.

                                                                                        
Adjusted expected gross margin, effective tax rate, and diluted
earnings per share
                                                                                                                                                                      
                                                                                                     Quarter Ending                                                         Fiscal Year Ending
                                                                                                    October 29, 2017                                                         January 28, 2018
                                                                                             ----------------------------                                            ------------------------------
Expected gross margin                                                                            50.9 %                                                                    51.9 %
Non-GAAP adjustments(1)                                                                           0.2                                                    0.3  
                                                                                             -------- --------------------                                           ---------- --------------------
Adjusted expected gross margin                                                                   51.1 %                                                                    52.2 %
                                                                                                                                                                      
                                                                                                     Quarter Ending                                                         Fiscal Year Ending
                                                                                                    October 29, 2017                                                         January 28, 2018
                                                                                             ----------------------------                                            ------------------------------
Expected effective tax rate                                                                      32.2 %                                                                    30.8 %
Non-GAAP adjustments(1)                                                                          (1.8 )                                                                    (0.5 )
                                                                                             -------- --------------------                                           ---------- --------------------
Adjusted expected effective tax rate                                                             30.4 %                                                                    30.3 %
                                                                                                                                                                      
                                                                                                     Quarter Ending                                                         Fiscal Year Ending
                                                                                                    October 29, 2017                                                         January 28, 2018
                                                                                             ----------------------------                                            ------------------------------
Expected diluted earnings per share range                                                            $0.33 to $0.35                                                           $2.04 to $2.11
Non-GAAP adjustments(1)                                                                          0.17                                                   0.31  
                                                                                             -------- --------------------                                           ---------- --------------------
Adjusted expected diluted earnings per share range                                                   $0.50 to $0.52                                                           $2.35 to $2.42
__________
(1)   These adjustments relate to the restructuring of our ivivva
                         operations. Please refer to Note 6 to the unaudited interim
                         consolidated financial statements included in Item 1 of Part I of
                         our Report on Form 10-Q to be filed with the SEC on or about August
                         31, 2017 for further explanation as to the nature of these items.
                          
                                                                             
lululemon athletica inc.
Store Count and Square Footage(1)
Square Footage Expressed in Thousands
                                                                                                                                                                                                                                       
                                                              Number of                                                Number of                                                Number of                                                   Number of
                                                           Stores Open at                                            Stores Opened                                            Stores Closed                                                Stores Open
                                                                 the                                                  During the                                               During the                                                 at the End of
                                                              Beginning                                                 Quarter                                                Quarter(3)                                                      the
                                                                 of                                                                                                                                                                          Quarter
                                                             the Quarter
                                                           -------------                                            ------------                                            --------------                                            --------------------
3rd Quarter 2016                                               379                                                      12                                                               2                                                             389
4th Quarter 2016                                               389                                                      17                                                  --                                                             406
1st Quarter 2017                                               406                                                       5                                                  --                                                             411
2nd Quarter 2017                                               411                                                      11                                                               1                                                             421
                                                                                                                                                                                                                                       
                                                             Total Gross                                             Gross Square                                             Gross Square                                                 Total Gross
                                                           Square Feet at                                             Feet Added                                                Feet Lost                                                Square Feet at
                                                            the Beginning                                             During the                                               During the                                                  the End of
                                                                 of                                                   Quarter(2)                                               Quarter(2,                                                      the
                                                             the Quarter                                                                                                           3)                                                        Quarter
                                                           -------------                                            ------------                                            --------------                                            --------------------
3rd Quarter 2016                                             1,117                                                      32                                                               5                                                           1,144
4th Quarter 2016                                             1,144                                                      47                                                               1                                                           1,190
1st Quarter 2017                                             1,190                                                      14                                                  --                                                           1,204
2nd Quarter 2017                                             1,204                                                      37                                                               3                                                           1,238
                                                                                                                                                                                                                                       
__________
(1)   Store count and square footage summary includes company-operated
                         stores which are branded lululemon or ivivva. Excludes retail
                         locations operated by third parties under license and supply
                         arrangements.
(2)                      Gross square feet added/lost during the quarter includes net square
                         foot additions for company-operated stores which have been renovated
                         or relocated in the quarter.
(3)                      Subsequent to quarter end, on August 20, 2017, as part of the
                         restructuring of its ivivva operations, the Company closed 47 of the
                         55 ivivva branded company-operated stores. Of the eight remaining
                         ivivva branded stores, seven are expected to remain in operation and
                         one is expected to be converted to a lululemon branded store.

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170831006292r1&sid=cmtx6&distro=nx&

View source version on businesswire.com: http://www.businesswire.com/news/home/20170831006292/en/

SOURCE: lululemon athletica inc.

Investors: 
ICR, Inc. 
Joseph Teklits/Caitlin Morahan 
203-682-8200 
or 
Media: 
Brunswick 
Mike France/Laura Buchanan 
917-676-5802 / +44 797 498 2492 
or 
lululemon athletica inc. 
Allison Reid, +44 787 576 2283


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