China Mainland net revenue increased by 41% YoY, demonstrating strong growth in this market. The company plans to continue investing in China Mainland and expects the majority of company-operated store openings in 2025 to be in this market.

Lululemon increased its retail footprint by opening 56 net new company-operated stores, contributing to a 14% increase in square footage. This expansion supports the company's growth objectives and omni-channel capabilities.

On September 10, 2024, lululemon acquired the lululemon branded retail locations and operations run by a third party in Mexico. This acquisition provides direct control over the brand's presence in Mexico and is expected to contribute to future growth.

Operating margin increased 150 basis points to 23.7%, reflecting improved profitability. This expansion is attributed to effective cost management, strategic pricing, and successful execution of the company's growth plan.

Inventory increased 9% year over year, and the company expects inventory growth to exceed net revenue growth in 2025. This suggests potential challenges in managing inventory levels and efficiently aligning supply with demand.

Lululemon continues to invest in brand campaigns, ambassador programs, and product innovation to drive growth and deepen customer relationships. These investments are aimed at strengthening the brand's image and differentiating its products from competitors.

The company relies on international suppliers, primarily in APAC and China Mainland, for manufacturing and raw materials. Disruptions to the supply chain due to trade restrictions, political instability, or global health crises could significantly impact the company's ability to procure or distribute products.

The company acknowledges the importance of maintaining brand value and reputation, which can be adversely affected by negative publicity, product recalls, or allegations of misconduct. Social media amplifies these risks, requiring careful management of public image.

The company recognizes the increasing threat of cyber-attacks and the importance of safeguarding customer data. Compliance with evolving privacy and data protection laws, such as GDPR and CCPA, adds to the compliance burden and could result in potential regulatory enforcement activity and fines.

The athletic apparel market is highly competitive, with established companies and new entrants vying for market share. The company acknowledges the risk of competitors achieving greater brand awareness and market share more quickly and effectively.

The company has limited patents and exclusive intellectual property rights in its fabrics and manufacturing technology, making it easier for competitors to manufacture and sell similar products. This increases the risk of price competition and reduced profitability.

The company's success depends on its ability to anticipate consumer preferences and develop innovative products. Failure to do so could result in lower sales and excess inventory levels, highlighting the importance of continuous product development and market responsiveness.

Selling, general, and administrative expenses increased by 10.7%, driven by higher employee costs, marketing expenses, and distribution costs. This increase indicates potential inefficiencies or increased investments in growth-related activities.

The company continues to expand its distribution network to support growth, with a new distribution center in Brampton, Ontario, expected to be operational in fiscal 2026. This expansion aims to improve supply chain efficiency and reduce delivery times.

The company continues to evolve and integrate its digital and physical channels to enhance the guest experience. This includes investments in technologies that enable omni-channel retailing, such as buy online pick-up in store and ship from store.

The company continues to invest in technology, including cloud computing and digital capabilities, to enhance its operations and customer experience. This is evidenced by increased technology costs and cloud computing amortization.

The company discontinued selling MIRROR hardware and is now offering a digital app-only subscription. This shift reflects a change in strategy and a focus on software and digital content delivery.

The company operates a cybersecurity program designed to assess security risks, manage those risks, protect technology systems and data, and detect and respond to cybersecurity incidents. The company has a CISO and a Cyber Defense and Incident Response team.

The company repurchased 5.1 million shares for $1.6 billion in 2024, demonstrating a commitment to returning capital to shareholders. The board of directors also approved increases in the stock repurchase authorization totaling $2.0 billion during 2024.

Capital expenditures increased due to investments in supply chain infrastructure, company-operated stores, and system initiatives. This reflects a commitment to supporting future growth and improving operational capabilities.

The company does not anticipate paying any cash dividends on its common stock in the foreseeable future, and any future determination as to the payment of cash dividends will be at the discretion of the board of directors.

The company's Impact Agenda sets out social and environmental goals and strategy across three pillars: Be Human, Be Well, and Be Planet. This demonstrates a commitment to ESG principles and sustainable business practices.

The company has invested $71.0 million towards a goal to invest a total of $75.0 million to advance equity in well-being by the end of 2025. This reflects a commitment to social responsibility and employee well-being.

The company requires its suppliers and manufacturers to comply with its Vendor Code of Ethics, which includes labor, health and safety, and environmental standards. This demonstrates a commitment to ethical sourcing and responsible supply chain management.

The company acknowledges that macroeconomic conditions, including inflation and fluctuating interest rates, impact consumer spending and demand for its products. This highlights the sensitivity of the business to economic cycles.

Foreign currency fluctuations reduced the growth of net revenue by $75.3 million when comparing 2024 to 2023, primarily due to the overall appreciation of the US dollar. This highlights the company's exposure to currency risk and the importance of hedging strategies.

The company acknowledges the potential impact of political unrest, trade restrictions, and changes in diplomatic relationships on its business and results of operations. This highlights the importance of monitoring geopolitical developments and adapting supply chain strategies.