10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended November 3, 2013

or

o 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.)
400-1818 Cornwall Avenue, Vancouver, British Columbia	V6J 1C7
(Address of principal executive offices)	(Zip Code)

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

Indicate by check mark whether the registrant: (1) has filed all 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 þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (of for such shorter period that the registrant was required to submit and post such files).    Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	þ	Accelerated filer	o
Non-accelerated filer	o (Do not check if a smaller reporting company)	Smaller reporting company	o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes o No þ

At December 9, 2013, there were 115,223,687 shares of the registrant’s common stock, par value $0.005 per share, outstanding.

Exchangeable and Special Voting Shares:

At December 9, 2013, there were outstanding 29,982,922 exchangeable shares of Lulu Canadian Holding, Inc., a wholly-owned subsidiary of the registrant. Exchangeable shares are exchangeable for an equal number of shares of the registrant’s common stock.

In addition, at December 9, 2013, the registrant had outstanding 29,982,922 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 generally vote together as a single class on all matters on which the common stock is entitled to vote.

TABLE OF CONTENTS

		Page
	PART I. FINANCIAL INFORMATION
Item 1.	FINANCIAL STATEMENTS:	3
	CONSOLIDATED BALANCE SHEETS as of November 3, 2013 and February 3, 2013	3
	CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME for the thirteen and thirty-nine weeks ended November 3, 2013 and October 28, 2012	4
	CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY for the thirty-nine weeks ended November 3, 2013	5
	CONSOLIDATED STATEMENTS OF CASH FLOWS for the thirty-nine weeks ended November 3, 2013 and October 28, 2012	6
	NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS	7
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	13
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	24
Item 4.	CONTROLS AND PROCEDURES	25
	PART II. OTHER INFORMATION
Item 1.	LEGAL PROCEEDINGS	26
Item 1A.	RISK FACTORS	26
Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	33
Item 6.	EXHIBITS	34
SIGNATURES		35

2

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

lululemon athletica inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

	November 3, 2013			February 3, 2013
	(Unaudited)
	(Amounts in thousands, except per share amounts)
ASSETS
Current assets
Cash and cash equivalents	$	600,745		$	590,179
Accounts receivable	12,105			6,351
Inventories	206,154			155,222
Prepaid expenses and other current assets	61,587			35,301
	880,591			787,053
Property and equipment, net	243,626			214,639
Goodwill and intangible assets, net	28,991			30,201
Deferred income taxes	16,103			15,033
Other non-current assets	5,243			4,152
	$	1,174,554		$	1,051,078
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	4,783		$	1,045
Accrued liabilities	38,221			30,032
Accrued compensation and related expenses	26,829			27,530
Income taxes payable	991			39,637
Unredeemed gift card liability	23,790			35,113
	94,614			133,357
Non-current liabilities	37,180			30,422
	131,794			163,779
Stockholders’ 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, issued and outstanding 29,983 and 32,065	—			—
Special voting stock, $0.000005 par value, 60,000 shares authorized, issued and outstanding 29,983 and 32,065	—			—
Common stock, $0.005 par value, 400,000 shares authorized, issued and outstanding 115,223 and 112,371	576			562
Additional paid-in capital	242,465			221,372
Retained earnings	814,130			644,275
Accumulated other comprehensive (loss) income	(14,411		)	21,090
	1,042,760			887,299
	$	1,174,554		$	1,051,078

See accompanying notes to the interim consolidated financial statements

3

lululemon athletica inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

	Thirteen Weeks Ended November 3, 2013			Thirteen Weeks Ended   October 28, 2012		Thirty-Nine Weeks Ended November 3, 2013			Thirty-Nine Weeks Ended October 28, 2012
	(Unaudited)
	(Amounts in thousands, except per share amounts)
Net revenue	$	379,900		$	316,537	$	1,070,195		$	884,869
Cost of goods sold	175,294			141,237		508,909			396,550
Gross profit	204,606			175,300		561,286			488,319
Selling, general and administrative expenses	112,270			94,689		324,075			264,455
Income from operations	92,336			80,611		237,211			223,864
Other income (expense), net	1,453			1,424		4,249			3,500
Income before provision for income taxes	93,789			82,035		241,460			227,364
Provision for income taxes	27,678			24,655		71,605			65,308
Net income	66,111			57,380		169,855			162,056
Net income attributable to non-controlling interest	—			64		—			875
Net income attributable to lululemon athletica inc.	$	66,111		$	57,316	$	169,855		$	161,181
Basic earnings per share	$	0.46		$	0.40	$	1.17		$	1.12
Diluted earnings per share	$	0.45		$	0.39	$	1.16		$	1.11
Basic weighted-average number of shares outstanding	145,120			144,057		144,806			143,903
Diluted weighted-average number of shares outstanding	146,014			145,748		145,967			145,750
Other comprehensive income:
Foreign currency translation adjustment	(9,153		)	2,642		(35,501		)	(381		)
Comprehensive income	$	56,958		$	59,958	$	134,354		$	160,800

See accompanying notes to the interim consolidated financial statements

4

lululemon athletica inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

	Exchangeable Stock				Special Voting Stock				Common Stock
	Shares		Par Value		Shares		Par Value		Shares		Par Value		Additional Paid-in Capital			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Total
	(Unaudited) (Amounts in thousands)
Balance at February 3, 2013	32,065		$	—	32,065		$	—	112,371		$	562	$	221,372		$	644,275	$	21,090		$	887,299
Net income attributable to lululemon athletica inc.																169,855					169,855
Foreign currency translation adjustment																		(35,501		)	(35,501		)
Stock-based compensation													12,453								12,453
Excess tax benefit from stock-based compensation													6,453								6,453
Common stock issued upon exchange of exchangeable shares	(2,082	)	—		(2,082	)	—		2,082		10		(10		)						—
Restricted share issuance									15		—		—								—
Stock options exercised									647		3		7,475								7,478
Common stock issued upon settlement of performance-based restricted stock units									191		1		(1		)						—
Shares withheld related to net share settlement of performance-based restricted stock units									(83	)	—		(5,277		)						(5,277		)
Balance at November 3, 2013	29,983		$	—	29,983		$	—	115,223		$	576	$	242,465		$	814,130	$	(14,411	)	$	1,042,760

See accompanying notes to the interim consolidated financial statements

5

lululemon athletica inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Thirty-Nine Weeks Ended   November 3, 2013			Thirty-Nine Weeks Ended   October 28, 2012
	(Unaudited) (Amounts in thousands)
Cash flows from operating activities
Net income	$	169,855		$	162,056
Items not affecting cash
Provision for inventories	18,316			724
Depreciation and amortization	36,723			30,962
Stock-based compensation	12,453			11,828
Excess tax benefits from stock-based compensation	(6,453		)	(7,172		)
Other, including net changes in other non-cash balances
Prepaid tax installments	(12,124		)	(9,315		)
Other prepaid expenses and other current assets	(14,645		)	(6,965		)
Inventories	(72,052		)	(61,262		)
Accounts payable	3,728			(7,958		)
Accrued liabilities	7,230			11,048
Sales tax collected	270			(7,573		)
Income taxes payable	(40,272		)	(1,858		)
Accrued compensation and related expenses	(1,474		)	(663		)
Other non-cash balances	(6,749		)	(612		)
Net cash provided by operating activities	94,806			113,240
Cash flows from investing activities
Purchase of property and equipment	(71,945		)	(72,041		)
Net cash used in investing activities	(71,945		)	(72,041		)
Cash flows from financing activities
Proceeds from exercise of stock options	7,478			6,978
Excess tax benefits from stock-based compensation	6,453			7,172
Purchase of non-controlling interest	—			(26,013		)
Taxes paid related to net share settlement of equity awards	(5,277		)	—
Net cash provided by (used in) financing activities	8,654			(11,863		)
Effect of exchange rate changes on cash	(20,949		)	650
Increase in cash and cash equivalents	10,566			29,986
Cash and cash equivalents, beginning of period	$	590,179		$	409,437
Cash and cash equivalents, end of period	$	600,745		$	439,423

See accompanying notes to the interim consolidated financial statements

6

lululemon athletica inc. and Subsidiaries

NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL

STATEMENTS

(Amounts in thousands, except per share and store count information, unless otherwise indicated)

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, manufacture and distribution of healthy lifestyle inspired athletic apparel, which is sold through a chain of corporate-owned and operated retail stores, direct to consumer through e-commerce and through a network of wholesale accounts. The Company’s primary markets are the United States, Canada, Australia, and New Zealand, where 166, 53, 25 and three corporate-owned stores were in operation as of November 3, 2013, respectively. There were a total of 247 and 211 corporate-owned stores in operation as of November 3, 2013 and February 3, 2013, respectively.

Basis of presentation

The unaudited interim consolidated financial statements as of November 3, 2013 and for the thirty-nine weeks ended November 3, 2013 and October 28, 2012 are presented using the United States dollar and have been prepared by the Company under the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the financial information is presented in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and, accordingly, do not include all of the information and footnotes required by GAAP for complete financial statements. The financial information as of February 3, 2013 is derived from the Company’s audited consolidated financial statements and notes for the fiscal year ended February 3, 2013, included in Item 8 in the fiscal 2012 Annual Report on Form 10-K filed with the SEC on March 21, 2013. These unaudited interim consolidated financial statements reflect all 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 the Company’s 2012 Annual Report on Form 10-K.

The Company’s fiscal year ends on the Sunday closest to January 31 of the following year, typically resulting in a 52 week year, but occasionally giving rise to an additional week, resulting in a 53 week year. Fiscal 2013 is a 52 week year, and will end on February 2, 2014 while fiscal 2012 was a 53 week year, and ended on February 3, 2013.

The Company’s business is affected by the pattern of seasonality common to most retail apparel businesses. The results for the periods presented are not necessarily indicative of future financial results.

NOTE 2. RECENT ACCOUNTING PRONOUNCEMENTS

In January 2013, the FASB amended ASC Topic 210 Balance Sheet (“ASC 210”) to clarify the scope of the required enhanced disclosures that will enable financial statement users to evaluate the effect or potential effect of netting arrangements on a company’s financial position, including the effect or potential effect of rights of setoff associated within scope assets and liabilities. The amendment requires enhanced disclosures by requiring improved information about financial instruments and derivative instruments that are either (i) offset in accordance with ASC 210-20-45 or ASC 815-10-45 or (ii) subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in accordance with ASC 210-20-45 or ASC 815-10-45. This guidance is effective for annual periods beginning on or after January 1, 2013. The Company adopted the amendment in the first quarter of fiscal 2013 with no material impact on the Company’s consolidated financial statements.

NOTE 3. STOCK-BASED COMPENSATION

Share option plans

The Company’s employees participate in various stock-based compensation plans, which are provided by the Company directly.

Stock-based compensation expense charged to income for the plans was $12,453 and $11,828 for the thirty-nine weeks ended November 3, 2013 and October 28, 2012, respectively. Total unrecognized compensation cost for all stock-based compensation plans was $23,886 at November 3, 2013, which is expected to be recognized over a weighted-average period of 2.1 years.

7

Company stock options, performance-based restricted stock units and restricted shares

A summary of the Company’s stock option, performance-based restricted stock unit and restricted share activity as of November 3, 2013 and changes during the thirty-nine week period then ended is presented below:

	Number of Stock Options	Weighted- Average Exercise Price		Number of Performance-Based Restricted Stock Units	Weighted- Average Grant Fair Value		Number of Restricted Shares	Weighted- Average Grant Fair Value
Balance at February 3, 2013	1,377	$	19.51	491	$	45.47	16	$	63.97
Granted	97	66.34		267	52.61		17	64.30
Exercised	647	11.56		191	20.74		16	63.97
Forfeited	52	24.83		24	60.98		2	64.30
Balance at November 3, 2013	775	$	31.67	543	$	57.01	15	$	64.30
Exercisable at November 3, 2013	364	$	16.51	—	$	—	—	$	—

The Company’s performance-based restricted stock units are awarded to eligible employees and entitle the grantee to receive a maximum of 1.5 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 award date. Expense for performance share units is recognized when it is probable that the performance goal will be achieved.

Employee stock purchase plan

The Company’s Board of Directors and stockholders approved the Company’s Employee Share Purchase Plan (“ESPP”) in September 2007. The ESPP allows for the purchase of common stock of the Company by all eligible employees at a 25% discount from fair market value subject to certain limits as defined in the ESPP. The maximum number of shares available under the ESPP is 6,000 shares. During the thirteen weeks ended November 3, 2013, there were 23 shares purchased under the ESPP, which were funded by the Company through open market purchases.

NOTE 4. EARNINGS PER SHARE

The details of the computation of basic and diluted earnings per share are as follows:

	Thirteen Weeks Ended November 3, 2013		Thirteen Weeks Ended October 28, 2012		Thirty-Nine Weeks Ended November 3, 2013		Thirty-Nine Weeks Ended October 28, 2012
Net income attributable to lululemon athletica inc.	$	66,111	$	57,316	$	169,855	$	161,181
Basic weighted-average number of shares outstanding	145,120		144,057		144,806		143,903
Effect of stock options assume exercised	894		1,691		1,161		1,847
Diluted weighted-average number of shares outstanding	146,014		145,748		145,967		145,750
Basic earnings per share	$	0.46	$	0.40	$	1.17	$	1.12
Diluted earnings per share	$	0.45	$	0.39	$	1.16	$	1.11

The Company’s calculation of weighted-average shares includes the common stock of the Company as well as the exchangeable shares. Exchangeable shares are the equivalent of common shares in all material respects. All classes of stock have in effect the same rights and share equally in undistributed net income. For the thirty-nine weeks ended November 3, 2013 and October 28, 2012, 63 and 53 stock options, respectively, were anti-dilutive to earnings and therefore have been excluded from the computation of diluted earnings per share.

8

NOTE 5. INVENTORIES

	November 3, 2013			February 3, 2013
Finished goods	$	232,270		$	163,008
Raw materials	568			583
Provision to reduce inventory to market value	(26,684		)	(8,369		)
	$	206,154		$	155,222

The Company’s calculation of provision to reduce inventory to market value includes a $17,469 charge to cost of sales in the thirty-nine weeks ended November 3, 2013, related to the pull-back of black luon pants in corporate-owned stores, direct to consumer and other sales channels, as well as inventory held in its warehouse facilities.

9

NOTE 6. SUPPLEMENTARY FINANCIAL INFORMATION

A summary of certain balance sheet accounts is as follows:

	November 3, 2013			February 3, 2013
Prepaid expenses and other current assets:
Prepaid tax installments	$	40,398		$	21,821
Prepaid expenses	21,189			13,480
	$	61,587		$	35,301
Property and equipment:
Land	$	69,773		$	72,679
Buildings	10,554			10,969
Leasehold improvements	140,927			109,233
Furniture and fixtures	38,872			30,907
Computer hardware and software	96,687			81,099
Equipment and vehicles	1,487			1,486
Accumulated amortization and depreciation	(114,674		)	(91,734		)
	$	243,626		$	214,639
Goodwill and intangible assets:
Goodwill	$	23,609		$	23,609
Changes in foreign currency exchange rates	879			2,451
	24,488			26,060
Reacquired franchise rights	10,630			10,630
Accumulated amortization	(8,490		)	(8,076		)
Changes in foreign currency exchange rates	2,363			1,587
	4,503			4,141
	$	28,991		$	30,201
Accrued liabilities:
Inventory purchases	$	12,837		$	7,633
Sales tax collected	8,909			8,501
Accrued rent	5,093			5,688
Other	11,382			8,210
	$	38,221		$	30,032
Non-current liabilities:
Deferred lease liability	$	17,921		$	16,785
Tenant inducements	19,259			13,637
	$	37,180		$	30,422

NOTE 7. LEGAL PROCEEDINGS

On October 25, 2013, plaintiff Laborers’ District Council Industry Pension Fund filed a books-and-records action entitled Laborers’ District Council Construction Industry Pension Fund v. lululemon athletica inc., No. 9039 (Del. Ch.) under 7 Del. C. Sec. 220 based on a demand letter it sent to the Company on or around August 8, 2013 to request certain lululemon records relating to the March 2013 sheer luon issue, the Company's announcement that its CEO intends to resign, and certain stock trades executed by the Chairman of the Company’s board of directors prior to the Company's announcement regarding its CEO. The Company moved to dismiss the complaint on November 11, 2013, and the motion remains pending. The Company believes there is no merit to this action and the Company intends to continue to defend vigorously.

On August 12, 2103 and August 23, 2013, plaintiffs Thomas Canty and Tammy Federman filed shareholder derivative actions entitled Canty v. Day , et al., No. 13-CV-5629 (S.D.N.Y.) and Federman v. Day, et al., No. 13-CV-5977 (S.D.N.Y.).

10

Plaintiffs allege that they are acting on behalf of the Company and name as defendants current and former directors and certain officers of the Company. The complaint challenges certain public disclosures and conduct relating to the March 2013 sheer luon issue, the Company's announcement that its CEO intends to resign, and certain stock trades executed by certain defendants prior to the Company's announcement regarding its CEO. The plaintiffs have designated the Canty complaint as their operative complaint and allege violations of Section 14(a) of the Securities Exchange Act and for breach of fiduciary duty, unjust enrichment, abuse of control, and gross mismanagement. The Defendants believe there is no merit to this suit and the Defendants intend to defend vigorously.

On July 2, 2013, plaintiff Houssam Alkhoury filed a putative shareholder class action entitled Alkhoury v. lululemon athletica inc., et al., No. 13-CV-4596 (S.D.N.Y.) against lululemon, a certain director and a certain officer of the Company (collectively, “Defendants”). On September 3, 2013, plaintiff Houssam Alkhoury and putative plaintiff Louisiana Sheriffs' Pension & Relief Fund moved to be appointed as lead plaintiff in the lawsuit. On October 1, 2013, the Court appointed Louisiana Sheriffs' Pension & Relief Fund as Lead Plaintiff and on November 1, Lead Plaintiff filed a consolidated class action complaint on behalf of a proposed class of purchasers of lululemon stock between September 7, 2012 through June 11, 2013 (the “Complaint”). In its Complaint, Lead Plaintiff asserts causes of action under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 against Defendants based on certain public disclosures made by the Company relating to its product quality and the March 2013 sheer luon issue. The Company believes there is no merit to this suit and the Company intends to defend vigorously.

On May 3, 2013, plaintiff Hallandale Beach Police Officers and Firefighters Personnel Retirement Fund filed a books-and-records action entitled Hallandale Beach Police Officers and Firefighters' Personnel Retirement Fund v. lululemon athletica inc., No. 8522 (Del. Ch.). under 7 Del. C. Sec. 220 based on a demand letter it sent to the Company on April 17, 2013 to request certain lululemon records relating to the March 2013 sheer luon issue and recent revisions to the Company's executive bonus plan. The Company moved to dismiss the complaint on May 28, 2013. On June 14, 2013, plaintiff sent a supplemental demand letter that requested additional records from the Company relating to the Company's announcement that its CEO intends to resign, and certain stock trades executed by the Company's Chairman prior to the Company's announcement regarding its CEO. On July 1, 2013, plaintiff filed an amended complaint to incorporate allegations relating to the June 14, 2013 supplemental demand letter. The Company moved to dismiss the amended complaint on August 15, 2013, and in response to this filing, plaintiffs served the Company with a new demand letter and then filed a second amended complaint on November 4, 2013. The Company believes there is no merit to this action and the Company intends to continue to defend vigorously.

11

NOTE 8. SEGMENT REPORTING

The Company applies ASC Topic 280, Segment Reporting (“ASC 280”), in determining reportable segments for its financial statement disclosure. The Company reports segments based on the financial information it uses in managing its business. The Company’s reportable segments are comprised of corporate-owned stores, direct to consumer and other. Direct to consumer includes sales from the Company’s e-commerce websites. Sales to wholesale accounts, showrooms sales and outlet sales have been combined into other. The Company has reviewed the classification of its expenses amongst its reportable segments and has updated the classification of some of these expenses. Accordingly, all prior year comparable information has been reclassified to conform to the current year classification. Information for these segments is detailed in the table below:

	Thirteen Weeks Ended   November 3, 2013		Thirteen Weeks Ended   October 28, 2012		Thirty-Nine Weeks Ended   November 3, 2013		Thirty-Nine Weeks Ended   October 28, 2012
Net revenue:
Corporate-owned stores	$	290,666	$	252,046	$	833,792	$	712,149
Direct to consumer	61,954		45,122		165,304		118,991
Other	27,280		19,369		71,099		53,729
	$	379,900	$	316,537	$	1,070,195	$	884,869
Income from operations before general corporate expense:
Corporate-owned stores	$	89,676	$	84,438	$	244,915	$	242,045
Direct to consumer	27,980		19,167		68,999		51,644
Other	4,597		4,278		12,755		11,597
	122,253		107,883		326,669		305,286
General corporate expense	29,917		27,272		89,458		81,422
Income from operations	92,336		80,611		237,211		223,864
Other income (expense), net	1,453		1,424		4,249		3,500
Income before provision for income taxes	$	93,789	$	82,035	$	241,460	$	227,364
Capital expenditures:
Corporate-owned stores	$	17,576	$	23,103	$	44,016	$	52,573
Direct to consumer	1,051		1,733		3,814		2,564
Corporate	9,305		8,159		24,115		16,904
	$	27,932	$	32,995	$	71,945	$	72,041
Depreciation:
Corporate-owned stores	$	7,847	$	7,826	$	22,850	$	20,957
Direct to consumer	1,190		639		3,303		2,296
Corporate	3,879		3,036		10,570		7,709
	$	12,916	$	11,501	$	36,723	$	30,962

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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 Section 27A of the Securities Act of 1933 and the Private Securities Litigation Reform Act of 1995. All 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,” “will,” “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 materially from those indicated by the forward-looking statements, including, but not limited to, those factors described in “Risk Factors” and elsewhere in this report.

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.

Our fiscal year ends on the Sunday closest to January 31 of the following year, typically resulting in a 52 week year, but occasionally giving rise to an additional week, resulting in a 53 week year. Fiscal 2013 is a 52 week year, and will end on February 2, 2014 while fiscal 2012 was a 53 week year, and ended on February 3, 2013.

We will disclose material non-public information through one or more of the following channels: our investor relations website (http://investor.lululemon.com/), the social media channels identified on our investor relations website, press releases, SEC filings, public conference calls, and webcasts.

Overview

Our results for the first three quarters of fiscal 2013 demonstrate our organization’s solid foundation. We remain committed to our brand and core values, which we believe drove year over year revenue growth across most of our selling channels. We believe our strong cash flow generation, solid balance sheet and healthy liquidity provide us with the financial flexibility to execute the initiatives which will continue to lead to quality growth.

In mid-March 2013, we determined that certain shipments of women’s black luon bottoms received from our factories and available in our stores from March 1, 2013, did not meet our specifications. As we became aware of this issue, we pulled what we believe to be all of the affected items from our stores, showrooms and e-commerce sites and began working with our supplier to replace the fabric and with our other manufacturers to replace these items as quickly as possible. The lost revenue in the remaining seven weeks of the first quarter of fiscal 2013 and in the second quarter of fiscal 2013, as well as additional costs incurred and the write down of affected product on hand from this issue have negatively impacted our results from operations in the first three quarters of fiscal 2013. During the first quarter of fiscal 2013 we recorded a $17.5 million inventory provision for the affected luon.

We believe the pull-back of black luon pants reiterates our quality standards. Our brand is recognized as premium in our offerings of women and men’s run and yoga assortment, as well as a leader in technical fabrics and functionality. Delivering quality to our customers is a critical factor in our market place differentiation and we believe removing items that do not meet our standards is key to maintaining our brand reputation. We have continued to invest in new and legacy information technology systems to develop new capabilities to support our vertical retail strategy.

Throughout the first three quarters of fiscal 2013, we were able to grow our e-commerce business which has further increased our brand awareness and has made our product available in new markets, including those outside of North America. While the pull-back of black luon pants from our e-commerce sites negatively affected sales, net revenue from our direct to consumer channel increased 39% and represented 15.5% of total revenue in the first three quarters of fiscal 2013 compared to

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13.4% of total revenue in the same period of the prior year. Continuing increases in traffic on our e-commerce website lead us to believe that there is potential for our direct to consumer segment to become an increasingly substantial part of our business and we plan to continue to commit a significant portion of our resources to further developing this channel.

We increased our store base through execution of our real estate strategy, when and where we saw opportunities for success. For example, we have opened 46 net new corporate-owned stores in North America and Australia since the third quarter of fiscal 2012. Where we find opportunities for growth through opening showrooms, or other community presence efforts, we expect to expand our store base and therefore our business. Our growth strategy relies on positive comparable store sales and expansion in North America, particularly in the United States. We also believe that international growth is an opportunity and are expanding our foothold in markets by establishing local community connections, distributing to strategic sales partners and opening showrooms where we believe our guests are shopping.

Operating Segment Overview

lululemon is a designer and retailer of technical athletic apparel operating primarily in North America and Australia. Our yoga-inspired apparel is marketed under the lululemon athletica and ivivva athletica brand names. We offer a comprehensive line of apparel and accessories including pants, shorts, tops and jackets designed for athletic pursuits such as yoga, running and general fitness, and dance-inspired apparel for female youth. As of November 3, 2013, our branded apparel was principally sold through 247 corporate-owned stores that are located in the United States, Canada, Australia and New Zealand and via our e-commerce websites included in our direct to consumer sales channel. We believe our vertical retail strategy allows us to interact more directly with and gain insights from our customers while providing us with greater control of our brand. In the thirteen week period ended November 3, 2013, 65% of our net revenue was derived from the sales of our products in the United States, 30% of our net revenue was derived from sales of our products in Canada, and 5% of our net revenue was derived from sales of our products outside of North America. In the thirteen week period ended October 28, 2012, 60% of our net revenue was derived from the sales of our products in the United States, 35% of our net revenue was derived from sales of our products in Canada, and 5% of our net revenue was derived from sales of our products outside of North America.

Our net revenue increased from $1.0 billion in fiscal 2011 to $1.4 billion in fiscal 2012, representing an annual growth rate of 37%. Our net revenue also increased from $316.5 million in the third quarter of fiscal 2012 to $379.9 million in third quarter of fiscal 2013, representing a 20% increase, and comparable store sales increased 2%. Our ability to open new stores and grow sales in existing stores has been driven by increasing demand for our technical athletic apparel and a growing recognition of the lululemon athletica brand. We believe our superior products, strategic store locations, inviting store environment and distinctive corporate culture are responsible for our strong financial performance.

We have three reportable segments: corporate-owned stores, direct to consumer and other. We report our segments based on the financial information we use in managing our businesses. While we receive financial information for each corporate-owned store, we have aggregated all of the corporate-owned stores into one reportable segment due to the similarities in the economic and other characteristics of these stores. Our direct to consumer segment accounted for 16.3% of our net revenue in third quarter of fiscal 2013, compared to 14.3% in the third quarter of fiscal 2012. Our other segment, consisting of sales to wholesale accounts, sales from company-operated showrooms, warehouse sales and outlets, accounted for less than 10% of our net revenue in the third quarters of fiscal 2013 and fiscal 2012.

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Results of Operations

Thirteen Week Results

The following table summarizes key components of our results of operations for the thirteen weeks ended November 3, 2013 and October 28, 2012. The operating results are expressed in dollar amounts as well as relevant percentages, presented as a percentage of net revenue.

	Thirteen Weeks Ended November 3, 2013 and October 28, 2012
	2013		2012		2013	2012
	(In thousands)				(Percentages)
Net revenue	$	379,900	$	316,537	100.0	100.0
Cost of goods sold	175,294		141,237		46.1	44.6
Gross profit	204,606		175,300		53.9	55.4
Selling, general and administrative expenses	112,270		94,689		29.6	29.9
Income from operations	92,336		80,611		24.3	25.5
Other income (expense), net	1,453		1,424		0.4	0.4
Income before provision for income taxes	93,789		82,035		24.7	25.9
Provision for income taxes	27,678		24,655		7.3	7.8
Net income	66,111		57,380		17.4	18.1
Net income attributable to non-controlling interest	—		64		—	—
Net income attributable to lululemon athletica inc.	$	66,111	$	57,316	17.4	18.1

Net Revenue

Net revenue increased$63.4 million, or 20%, to $379.9 million for the third quarter of fiscal 2013 from $316.5 million for the third quarter of fiscal 2012. Assuming the average exchange rates for the third quarter of fiscal 2013 remained constant with the average exchange rates for the third quarter of fiscal 2012, our net revenue would have increased$70.9 million, or 22%.

The net revenue increase was driven by sales from new stores opened, the growth of our e-commerce website sales included in our direct to consumer segment, and increased sales at locations in our comparable stores base. We believe the constant dollar increase in comparable store sales was driven primarily by the strength of our existing product lines, successful introduction of new products and increasing recognition of the lululemon athletica brand name, especially at our U.S. stores.

Our net revenue on a segment basis for the thirteen weeks ended November 3, 2013 and October 28, 2012 is expressed in dollar amounts as well as relevant percentages, presented as a percentage of total net revenue below.

	Thirteen Weeks Ended November 3, 2013 and October 28, 2012
	2013		2012		2013	2012
	(In thousands)				(Percentages)
Corporate-owned stores	$	290,666	$	252,046	76.5	79.6
Direct to consumer	61,954		45,122		16.3	14.3
Other	27,280		19,369		7.2	6.1
Net revenue	$	379,900	$	316,537	100.0	100.0

Corporate-Owned Stores. Net revenue from our corporate-owned stores segment increased$38.6 million, or 15%, to $290.7 million in the third quarter of fiscal 2013 from $252.0 million in the third quarter of fiscal 2012. The following contributed to the increase in net revenue from our corporate-owned stores segment:

• Comparable store sales increase of 2% in the third quarter of fiscal 2013 resulted in a $5.3 millionincrease to net revenue, including the effect of foreign currency fluctuations. Excluding the effect of foreign currency fluctuations, comparable store sales would have increased5%, or $10.6 million, in the third quarter of fiscal 2013; and

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• Net revenue from corporate-owned stores we opened subsequent to October 28, 2012, and therefore not included in the comparable store sales growth, contributed $33.3 million of the increase. Net new store openings since the third quarter of fiscal 2012 included 39 stores in the United States, three stores in Canada, three stores in Australia and one store in New Zealand.

Direct to Consumer. Net revenue from our direct to consumer segment increased$16.8 million, or 37%, to $62.0 million in the third quarter of fiscal 2013 from $45.1 million in the third quarter of fiscal 2012. The increase in net revenue was primarily the result of increasing traffic on our e-commerce websites.

Other. Net revenue from our other segment increased$7.9 million, or 41%, to $27.3 million in the third quarter of fiscal 2013 from $19.4 million in the third quarter of fiscal 2012. This increase was primarily the result of four new outlets opened since the third quarter of fiscal 2012 as well as increased net revenues from existing outlets. Increased revenue from our showrooms also contributed to the increase in net revenue from our other segment. We operate our other segment to increase interest in our product in markets we have not otherwise entered with corporate-owned stores.

Gross Profit

Gross profit increased$29.3 million, or 17%, to $204.6 million for the third quarter of fiscal 2013 from $175.3 million for the third quarter of fiscal 2012. Increased net revenues were partially offset by increased cost of goods sold.

The increase in gross profit was also partially offset by increases in fixed costs, such as occupancy costs and depreciation, and increased costs related to our production, design, distribution and merchandising departments.

Gross profit as a percentage of net revenue, or gross margin, decreased by 150 basis points, to 53.9% in the third quarter of fiscal 2013 from 55.4% in the third quarter of fiscal 2012. This was primarily a result of a decrease in product margin of 220 basis points due to an increase in product costs as well as increased air freight costs from higher usage.

The decrease in gross margin was partially offset by leverage on fixed costs, such as depreciation and occupancy costs, and a decrease in expenses related to our product and supply chain departments, relative to the increase in net revenue, which together contributed to an increase in gross margin of 70 basis points.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased$17.6 million, or 19%, to $112.3 million in the third quarter of fiscal 2013 from $94.7 million in the third quarter of fiscal 2012. The increase in selling, general and administrative expenses was principally comprised of:

• an increase in employee costs of $6.1 million as we experienced natural growth in labor hours associated with new and existing corporate-owned stores, outlets, showrooms and other, as well as an increase in wages as we invested in our employees;

• an increase in variable store costs of $2.0 million as a result of increased sales volume from new and existing corporate-owned stores, outlets, showrooms and other;

• an increase in head office employee costs of $3.3 million from increased head count incurred in order to position us for long-term growth;

• an increase in other head office costs of $2.9 million as a result of the overall growth of our business and investment in strategic initiatives and projects;

• an increase in variable costs such as distribution costs, credit card fees and packaging related to our direct to consumer segment of $0.9 million as a result of increased sales volume;

• an increase in administrative costs related to our direct to consumer segment of $1.0 million associated with the growth in this channel and increased head count to support it; and

• an increase in other costs, including occupancy costs and depreciation not included in cost of goods sold, of $1.4 million as a result of the expansion of our business.

As a percentage of net revenue, selling, general and administrative expenses decreased30 basis points, to 29.6% from 29.9%.

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Income from Operations

Income from operations increased$11.7 million, or 15%, to $92.3 million in the third quarter of fiscal 2013 from $80.6 million in the third quarter of fiscal 2012. The increase was a result of increased gross profit of $29.3 million, partially offset by increased selling, general and administrative costs of $17.6 million. The increase in selling, general and administrative costs was driven principally by the overall growth of our business.

On a segment basis, we determine income from operations without taking into account our general corporate expenses. We have reviewed our classification of our expenses amongst our reportable segments and have updated the classification of some of these expenses. Accordingly, all prior year comparable information has been reclassified to conform to the current year classification.

Income from operations before general corporate expenses for the thirteen weeks ended November 3, 2013 and October 28, 2012 is expressed in dollar amounts as well as percentages, presented as a percentage of net revenue of the respective operating segments below.

	Thirteen Weeks Ended November 3, 2013 and October 28, 2012
	2013		2012		2013	2012
	(In thousands)				(Percentages)
Corporate-owned stores	$	89,676	$	84,438	30.9	33.5
Direct to consumer	27,980		19,167		45.2	42.5
Other	4,597		4,278		16.9	22.1
Income from operations before general corporate expense	122,253		107,883
General corporate expense	29,917		27,272
Income from operations	$	92,336	$	80,611

Corporate-Owned Stores. Income from operations from our corporate-owned stores segment increased$5.2 million, or 6%, to $89.7 million for the third quarter of fiscal 2013 from $84.4 million for the third quarter of fiscal 2012 primarily due to an increase in gross profit of $15.7 million from increased sales, partially offset by an increase in selling, general and administrative expenses related to employee costs as well as operating expenses associated with new stores and net revenue growth at existing stores. Income from operations as a percentage of corporate-owned stores revenue decreased by 260 basis points primarily from a decrease in gross margin due to an increase in product costs as well as increased freight costs from higher usage.

Direct to Consumer. Income from operations from our direct to consumer segment increased$8.8 million, or 46%, to $28.0 million for the third quarter of fiscal 2013 from $19.2 million for the third quarter of fiscal 2012. This increase was primarily the result of increased gross profit of $10.9 million primarily due to increased revenue resulting from increased traffic, offset by increased selling, general and administrative expenses related to our long-term strategy for developing this channel. Income from operations as a percentage of direct to consumer revenue increased by 270 basis points primarily due to increased revenue resulting from higher traffic.

Other. Income from operations from our other segment increased$0.3 million, or 7%, to $4.6 million for the third quarter of fiscal 2013 from $4.3 million for the third quarter of fiscal 2012. Gross profit related to our other segment increased$2.8 million in the third quarter of fiscal 2013 from the third quarter of fiscal 2012. Income from operations as a percentage of other revenue decreased by 520 basis points primarily due to increased selling, general and administrative expenses.

General Corporate Expense. General corporate expense increased$2.6 million, or 10%, to $29.9 million for the third quarter of fiscal 2013 from $27.3 million for the third quarter of fiscal 2012. This was primarily due to increased head office employee costs, as well as other head office costs as a result of the overall growth of our business and investment in strategic initiatives and projects. The increase in general corporate expense was partially offset by a $1.8 million foreign exchange gain in our Canadian operating entity.

Other Income (Expense), Net

Other income (expense), net, remained flat compared to the third quarter of fiscal 2012, and was $1.5 million for the third quarter of fiscal 2013.

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Provision for Income Taxes

Provision for income taxes increased$3.0 million, or 12%, to $27.7 million in the third quarter of fiscal 2013 from $24.7 million in the third quarter of fiscal 2012. In the third quarter of fiscal 2013, our effective tax rate was 29.5% compared to 30.1% in the third quarter of fiscal 2012. The tax rate for the third quarter of fiscal 2013 reflects the ongoing impact of the revised intercompany pricing agreements.

Net Income

Net income increased$8.8 million to $66.1 million for the third quarter of fiscal 2013 from $57.3 million for the third quarter of fiscal 2012. The increase in net income was a result of an increase in gross profit of $29.3 million, offset by an increase in selling, general and administrative expenses of $17.6 million and an increase in provision for income taxes of $3.0 million.

Thirty-Nine Week Results

The following table summarizes key components of our results of operations for the thirty-nine week periods ended November 3, 2013 and October 28, 2012. The operating results are expressed in dollar amounts as well as relevant percentages, presented as a percentage of net revenue.

	Thirty-Nine Week November 3, 2013 and October 28, 2012
	2013		2012		2013	2012
	(In thousands)				(Percentages)
Net revenue	$	1,070,195	$	884,869	100.0	100.0
Cost of goods sold	$	508,909	$	396,550	47.6	44.8
Gross profit	$	561,286	$	488,319	52.4	55.2
Selling, general and administrative expenses	$	324,075	$	264,455	30.2	29.9
Income from operations	$	237,211	$	223,864	22.2	25.3
Other income (expense), net	$	4,249	$	3,500	0.4	0.4
Income before provision for income taxes	$	241,460	$	227,364	22.6	25.7
Provision for income taxes	$	71,605	$	65,308	6.7	7.4
Net income	$	169,855	$	162,056	15.9	18.3
Net income attributable to non-controlling interest	—		875		—	0.1
Net income attributable to lululemon athletica inc.	$	169,855	$	161,181	15.9	18.2

Net Revenue

Net revenue increased$185.3 million, or 21%, to $1,070.2 million for the first three quarters of fiscal 2013 from $884.9 million for the first three quarters of fiscal 2012. Assuming the average exchange rates for the first three quarters of fiscal 2013 remained constant with average exchange rates for the first three quarters of fiscal 2012, our net revenue would have increased$198.0 million, or 22%, for the first three quarters of fiscal 2013.

The net revenue increase was driven by increased sales at locations in our comparable stores base, sales from new stores opened and the growth of our e-commerce website sales included in our direct to consumer segment. We believe the constant dollar increase in comparable store sales was driven primarily by the strength of our existing product lines, our successful introduction of new products and increasing recognition of the lululemon athletica brand name, especially at our U.S. stores.

 Our net revenue on a segment basis for the thirty-nine week periods ended November 3, 2013 and October 28, 2012 is expressed in dollar amounts as well as relevant percentages, presented as a percentage of total net revenue below.

	Thirty-Nine Week November 3, 2013 and October 28, 2012
	2013		2012		2013	2012
	(In thousands)				(Percentages)
Corporate-owned stores	$	833,792	$	712,149	77.9	80.5
Direct to consumer	165,304		118,991		15.5	13.4
Other	71,099		53,729		6.6	6.1
Net revenue	$	1,070,195	$	884,869	100.0	100.0

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Corporate-Owned Stores. Net revenue from our corporate-owned stores segment increased$121.6 million, or 17%, to $833.8 million in the first three quarters of fiscal 2013 from $712.1 million in the first three quarters of fiscal 2012. The following contributed to the increase in net revenue from our corporate-owned stores segment:

• Comparable store sales increase of 5% in the first three quarters of fiscal 2013 resulted in a $35.1 millionincrease to net revenue, including the effect of foreign currency fluctuations. Excluding the effect of foreign currency fluctuations, comparable store sales increased7%, or $44.2 million, in the first three quarters of fiscal 2013; and

• Net revenue from corporate-owned stores we opened subsequent to October 28, 2012, and therefore not included in the comparable store sales growth, contributed $86.5 million of the increase. Net new store openings since the third quarter of fiscal 2012 included 39 stores in the United States, three stores in Canada, three stores in Australia and one store in New Zealand.

Direct to consumer. Net revenue from our direct to consumer segment increased$46.3 million, or 39%, to $165.3 million in the first three quarters of fiscal 2013 from $119.0 million in the first three quarters of fiscal 2012. The increase in net revenue was primarily the result of increasing traffic on our e-commerce websites.

Other. Net revenue from our other segment increased$17.4 million, or 32%, to $71.1 million in the first three quarters of fiscal 2013 from $53.7 million in the first three quarters of fiscal 2012. This increase was primarily the result of four new outlets opened since the third quarter of fiscal 2012 as well as increased net revenues from existing outlets. Increased revenue from our showrooms also contributed to the increase in net revenue from our other segment. We operate our other segment to increase interest in our product in markets we have not otherwise entered with corporate-owned stores.

Gross Profit

Gross profit increased$73.0 million, or 15%, to $561.3 million for the first three quarters of fiscal 2013 from $488.3 million for the first three quarters of fiscal 2012. Increased net revenues in our operating segments resulted in an increased gross profit. A $17.5 million inventory provision related to the pull-back of black luon pants was recorded in cost of sales during the first three quarters of fiscal 2013.

The increase in gross profit was partially offset by increases in fixed costs, such as occupancy costs and depreciation, as well as increased costs related to our production, design, distribution and merchandising departments.

Gross profit as a percentage of net revenue, or gross margin, decreased by 280 basis points, to 52.4% in the first three quarters of fiscal 2013 from 55.2% in the first three quarters of fiscal 2012. The decrease in gross margin resulted primarily from:

• a decrease in product margin of 170 basis points due to a lower sales mix of higher margin core items related to the pull-back of black luon pants, along with higher markdowns and an increase in provision for inventories charged to cost of sales; and

• a non-recurring charge of 160 basis points related to the pull-back of black luon pants in the first quarter of fiscal 2013.

The decrease in gross margin was partially offset by a decrease in expenses related to our product and supply chain departments, relative to the increase in net revenue, and by leverage on fixed costs, such as depreciation and occupancy costs, which together contributed to an increase in gross margin of 50 basis points.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased$59.6 million, or 23%, to $324.1 million in the first three quarters of fiscal 2013 from $264.4 million in the first three quarters of fiscal 2012. The increase in selling, general and administrative expenses was principally comprised of:

• an increase in employee costs of $21.1 million as we experienced natural growth in labor hours associated with new and existing corporate-owned stores, showrooms, outlets and other, as well as an increase in wages as we invest in our employees;

• an increase in variable store costs of $6.0 million as a result of increased sales volume from new and existing corporate-owned stores, outlets and other;

• an increase in head office employee costs, including stock-based compensation expense and management incentive-based compensation, of $10.5 million incurred in order to position us for long-term growth;

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• an increase in other head office costs of $11.3 million as a result of the overall growth of our business and investment in strategic initiatives and projects;

• an increase in administrative expenses related to our direct to consumer segment of $4.9 million associated with the growth in this channel;

• an increase in variable costs such as distribution costs, credit card fees and packaging related to our direct to consumer segment of $3.7 million as a result of increased sales volume; and

• an increase of $2.1 million in other costs, including occupancy costs and depreciation not included in cost of goods sold, as a result of the expansion of our business, which was partially offset by a $6.2 million foreign exchange gain in our Canadian operating entity.

As a percentage of net revenue, selling, general and administrative expenses increased30 basis points, to 30.2% in the third quarter of fiscal 2013 from 29.9% in the third quarter of fiscal 2012.

Income from Operations

Income from operations increased$13.3 million, or 6%, to $237.2 million in the first three quarters of fiscal 2013 from $223.9 million in the first three quarters of fiscal 2012. The increase was a result of increased gross profit of $73.0 million, partially offset by increased selling, general and administrative costs of $59.6 million. The increase in selling, general and administrative costs was primarily driven by the increase in our business, as seen in our net revenue increases.

On a segment basis, we determine income from operations without taking into account our general corporate expenses. We have reviewed our general corporate expenses and determined some costs previously classified as general corporate are direct segment expenses. Accordingly, all prior year comparable information has been reclassified to conform to the current year classification.

Income from operations before general corporate expenses for the thirty-nine week periods endedNovember 3, 2013 and October 28, 2012 is expressed in dollar amounts as well as percentages, presented as a percentage of net revenue of the respective operating segments below.

	Thirty-Nine Week November 3, 2013 and October 28, 2012
	2013		2012		2013	2012
	(In thousands)				(Percentages)
Corporate-owned stores	$	244,915	$	242,045	29.4	34.0
Direct to consumer	68,999		51,644		41.7	43.4
Other	12,755		11,597		17.9	21.6
Income from operations before general corporate expense	326,669		305,286
General corporate expense	89,458		81,422
Income from operations	$	237,211	$	223,864

Corporate-Owned Stores. Net income from our corporate-owned stores segment increased$2.9 million to $244.9 million for the first three quarters of fiscal 2013 from $242.0 million for the first three quarters of fiscal 2012 primarily due to an increase of $39.0 million in gross profit, which was offset by an increase in selling, general and administrative expenses related to employee costs as well as operating expenses associated with new stores and net revenue growth at existing stores. Income from operations as a percentage of corporate-owned stores revenue decreased by 460 basis points primarily from a decrease in gross margin due to a lower mix of higher margin core items related to the pull-back of black luon pants.

Direct to consumer. Net income from our direct to consumer segment increased $17.4 million, or 34%, to $69.0 million for the first three quarters of fiscal 2013 from $51.6 million for the first three quarters of fiscal 2012. The increase was primarily the result of increased gross profit of $26.6 million, offset by increased selling, general and administrative expenses related to our long-term strategy for developing this channel. Income from operations as a percentage of direct to consumer revenue decreased by 170 basis points primarily due to increased employee costs and other selling, general and administrative expenses as a percentage of revenue.

Other. Net income from our other segment increased $1.2 million, or 10%, to $12.8 million for the first three quarters of fiscal 2013 from $11.6 million for the first three quarters of fiscal 2012. This increase was the result of increased gross profit of $7.7 million, partially offset by increased selling, general and administrative expenses. Income from operations as a percentage of other revenue decreased by 370 basis points primarily due to increase selling, general and administrative expenses.

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General Corporate Expense. General corporate expense increased$8.0 million, or 10%, to $89.5 million for the first three quarters of fiscal 2013 from $81.4 million for the first three quarters of fiscal 2012. This was primarily due to increased head office employee costs, as well as other head office costs as a result of the overall growth of our business and investment in strategic initiatives and projects. The increase in general corporate expense was partially offset by a $6.2 million foreign exchange gain in our Canadian operating entity.

Other Income (Expense), Net

Other income (expense), net increased$0.7 million, or 21%, to $4.2 million in the first three quarters of fiscal 2013 from $3.5 million in the first three quarters of fiscal 2012.

Provision for Income Taxes

Provision for income taxes increased$6.3 million, or 10%, to $71.6 million in the first three quarters of fiscal 2013 from $65.3 million in the first three quarters of fiscal 2012. The effective tax rate for the first three quarters of fiscal 2013 was 29.7% compared to 28.7% in the first three quarters of fiscal 2012. The tax rate for the first three quarters of fiscal 2013 reflects the ongoing impact of the revised intercompany pricing agreements.

Net Income

Net income increased$8.7 million to $169.9 million for the first three quarters of fiscal 2013 from $161.2 million for the first three quarters of fiscal 2012. The increase in net income was a result of an increase in gross profit of $73.0 million and an increase in other income (expense), net of $0.7 million, offset by a increase in selling, general and administrative expenses of $59.6 million and an increase in provision for income taxes of $6.3 million.

Seasonality

Historically, we have recognized a significant portion of our income from operations in the fourth fiscal quarter of each year as a result of increased sales during the holiday selling season. Despite the fact that we have experienced a significant amount of our net revenue and gross profit in the fourth quarter of each fiscal year, we believe that the true extent of the seasonality or cyclical nature of our business may have been overshadowed by our rapid growth to date.

Liquidity and Capital Resources

Our primary sources of liquidity are our current balances of cash and cash equivalents, cash flows from operations and borrowings available under our revolving credit facility. Our cash needs are primarily capital expenditures for opening new stores and remodeling existing stores, international expansion, making information technology system investments and enhancements, real estate acquisitions and funding working capital requirements. Cash and cash equivalents in excess of our needs are held in interest bearing accounts with financial institutions.

At November 3, 2013, our working capital (excluding cash and cash equivalents) was $185.2 million and our cash and cash equivalents were $600.7 million.

The following table summarizes our net cash flows provided by and used in operating, investing and financing activities for the periods indicated:

	Thirty-Nine Weeks Ended   November 3, 2013			Thirty-Nine Weeks Ended   October 28, 2012
	(In thousands)
Total cash provided by (used in):
Operating activities	$	94,806		$	113,240
Investing activities	(71,945		)	(72,041		)
Financing activities	8,654			(11,863		)
Effect of exchange rate changes on cash	(20,949		)	650
Increase in cash and cash equivalents	$	10,566		$	29,986

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Operating Activities

Operating Activities consist primarily of net income adjusted for certain non-cash items, including provision for inventories, depreciation and amortization, stock-based compensation expense and the effect of the changes in non-cash working capital items, principally accounts payable, inventories, prepaid expenses, income taxes payable, and accrued compensation and related expenses.

Cash provided by operating activities decreased$18.4 million, to $94.8 million for the first three quarters of fiscal 2013 compared to $113.2 million for the first three quarters of fiscal 2012. The decrease was primarily a result of increased income taxes paid during the first three quarters of fiscal 2013 compared to the first three quarters of fiscal 2012, offset by increased net income after certain non-cash items, including provision for inventories.

Investing Activities

Investing Activities relate entirely to capital expenditures. Cash used in investing activities decreased$0.1 million to $71.9 million for the first three quarters of fiscal 2013 from $72.0 million for the first three quarters of fiscal 2012.

Financing Activities

Financing Activities consists of cash received on the exercise of stock options, excess tax benefits from stock-based compensation, taxes paid related to the net share settlement of equity awards, and cash paid to acquire non-controlling interest. Cash provided by financing activities increased by $20.5 million to $8.7 million for the first three quarters of fiscal 2013 from cash used in financing activities of $11.9 million for the first three quarters of fiscal 2012. The cash used in financing activities for the first three quarters of fiscal 2012 included $26.0 million for the purchase of the non-controlling interest in lululemon australia.

We believe that our cash from operations and borrowings available to us under our revolving credit facility will be adequate to meet our liquidity needs and capital expenditure requirements for at least the next 24 months. Our cash from operations may be negatively impacted by a decrease in demand for our products as well as the other factors described in “Risk Factors” and elsewhere in this report. In addition, we may make discretionary capital improvements with respect to our stores, distribution facility, headquarters, or other systems, which we would expect to fund through the issuance of debt or equity securities or other external financing sources to the extent we were unable to fund such capital expenditures out of our cash from operations.

Revolving Credit Facility

In April 2007, we executed a credit facility with the Royal Bank of Canada that provided for a CDN$20.0 million uncommitted demand revolving credit facility to fund our working capital requirements. Borrowings under this uncommitted credit facility are made on a when-and-as-needed basis at our discretion.

Borrowings under the credit facility can be made either as i) Revolving Loans — Revolving loan borrowings will bear interest at a rate equal to the bank’s CDN$ or US$ annual base rate (defined as zero% plus the lender’s annual prime rate) per annum, ii) Offshore Loans — Offshore rate loan borrowings will bear interest at a rate equal to a base rate based upon LIBOR for the applicable interest period, plus 1.125% per annum, iii) Bankers Acceptances — Bankers acceptance borrowings will bear interest at the bankers' acceptance rate plus 1.125% per annum, or iv) Letters of Credit and Letters of Guarantee — Borrowings drawn down under letters of credit or guarantee issued by the banks will bear a 1.125% per annum fee.

At November 3, 2013, aside from letters of credit and guarantees, there were no borrowings outstanding under this credit facility.

Off-Balance Sheet Arrangements

We enter into documentary letters of credit to facilitate the international purchase of merchandise. We also enter into standby letters of credit to secure certain of our obligations, including insurance programs and duties related to import purchases. As of November 3, 2013, letters of credit and letters of guarantee totaling $1.0 million have been issued.

Other than these standby letters of credit and guarantee, we do not have any off-balance sheet arrangements, investments in special purpose entities or undisclosed borrowings or debt. In addition, we have not entered into any derivative contracts or synthetic leases.

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Critical Accounting Policies

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. Predicting future events is inherently an imprecise activity and, as such, requires the use of judgment. Actual results may vary from 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 periodically, could materially impact our consolidated financial statements. Our critical accounting policies and estimates are discussed in our Annual Report on Form 10-K for our 2012 fiscal year end filed with the SEC on March 21, 2013 and in Note 2 included in Item 1 of Part I of this Quarterly Report on Form 10-Q.

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Operating Locations

Our corporate-owned stores by U.S. state, Canadian province, Australian state and in New Zealand as of November 3, 2013 and February 3, 2013, are summarized in the table below. While most of our stores are branded lululemon athletica, 11 of our corporate-owned stores are branded ivivva athletica and specialize in dance-inspired apparel for female youth.

	November 3, 2013	February 3, 2013
United States
Alabama	1	1
Arizona	5	3
Arkansas	1	—
California	28	24
Colorado	3	3
Connecticut	3	3
District of Columbia	2	2
Florida	8	8
Georgia	3	3
Hawaii	1	1
Illinois	10	9
Indiana	1	1
Kansas	1	1
Louisiana	1	1
Maryland	4	3
Massachusetts	8	6
Michigan	3	2
Minnesota	4	3
Missouri	3	2
Nebraska	1	1
Nevada	1	1
New Jersey	7	6
New Mexico	1	1
New York	14	9
North Carolina	5	4
Ohio	5	5
Oklahoma	1	—
Oregon	2	2
Pennsylvania	6	6
Rhode Island	1	—
South Carolina	1	1
Tennessee	3	3
Texas	14	10
Utah	2	1
Vermont	1	1
Virginia	3	3
Washington	6	3
Wisconsin	2	2
Total United States	166	135
Canada
Alberta	12	12
British Columbia	11	12
Manitoba	2	2
Nova Scotia	1	1
Ontario	20	18
Quebec	5	4
Saskatchewan	2	2
Total Canada	53	51
Australia
Australian Capital Territory	1	1
New South Wales	7	7
Queensland	3	3
South Australia	1	1
Tasmania	1	1
Victoria	8	7
Western Australia	4	3
Total Australia	25	23
New Zealand	3	2
Total	247	211

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of fluctuations in interest rates and foreign currency exchange rates. We do not hold or issue financial instruments for trading purposes.

Foreign Currency Exchange Risk. We currently generate a significant portion of our net revenue in Canada. The reporting currency for our consolidated financial statements is the U.S. dollar. Historically, our operations were based largely in Canada. As of November 3, 2013, we operated 53 stores in Canada. As a result, we have been impacted by changes in exchange rates and may be impacted materially for the foreseeable future. As we recognize net revenue from sales in Canada in Canadian dollars, and the U.S. dollar has strengthened during the first three quarters of fiscal 2013, it has had a negative impact on our Canadian operating results upon translation of those results into U.S. dollars for the purposes of consolidation. However, the loss in net revenue was offset by lower cost of sales and lower selling, general and administrative expenses that are generated in Canadian dollars. A 10% depreciation in the relative value of the Canadian dollar compared to the U.S. dollar would have resulted in lost income from operations of approximately $3.8 million in the first three quarters of fiscal 2013. To the extent the ratio between our net revenue generated in Canadian dollars increases as compared to our expenses generated in Canadian dollars, we expect that our results of operations will be further impacted by changes in exchange rates. A portion of our net revenue is generated in Australia. A 10% depreciation in the relative value of the Australian dollar compared to the U.S. dollar would have resulted in additional income from operations of less than $0.1 million in the first three quarters of fiscal 2013. We do not currently hedge foreign currency fluctuations. However, in the future, in an effort to mitigate losses associated with these risks, we may at times enter into derivative financial instruments, although we have not historically done so. We have not, and do not intend to, engage in the practice of trading derivative securities for profit.

Interest Rate Risk. In April 2007, we entered into an uncommitted senior secured demand revolving credit facility with Royal Bank of Canada. The revolving credit facility provides us with available borrowings in an amount up to CDN$20.0 million. Because our revolving credit facility bears interest at a variable rate, we will be exposed to market risks relating to changes in interest rates, if we have a meaningful outstanding balance. As of November 3, 2013, we had no outstanding borrowings under our revolving facility and we do not believe we are significantly exposed to changes in interest rate risk. We currently do not engage in any interest rate hedging activity and currently have no intention to do so in the foreseeable future. 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 historically done so. These may take the form of forward sales contracts, option contracts, and interest rate swaps. We have not, and do not intend to, engage in the practice of trading derivative securities for profit.

Inflation

Inflationary factors such as increases in the cost of our product and overhead costs may adversely affect our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and selling, general and administrative expenses as a percentage of net revenue if the selling prices of our products do not increase with these increased costs.

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, or the Exchange Act, 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 Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), to allow 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 Chief Executive Officer and Chief Financial 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), at November 3, 2013. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, at November 3, 2013, our disclosure controls and procedures were effective.

There was no change in internal control over financial reporting during the thirteen weeks ended November 3, 2013 that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

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PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On October 25, 2013, plaintiff Laborers’ District Council Industry Pension Fund filed a books-and-records action entitled Laborers’ District Council Construction Industry Pension Fund v. lululemon athletica inc., No. 9039 (Del. Ch.) under 7 Del. C. Sec. 220 based on a demand letter it sent to the Company on or around August 8, 2013 to request certain lululemon records relating to the March 2013 sheer luon issue, the Company's announcement that its CEO intends to resign, and certain stock trades executed by the Chairman of our board of directors prior to the Company's announcement regarding its CEO. The Company moved to dismiss the complaint on November 11, 2013, and the motion remains pending. The Company believes there is no merit to this action and the Company intends to continue to defend vigorously.

On August 12, 2103 and August 23, 2013, plaintiffs Thomas Canty and Tammy Federman filed shareholder derivative actions entitled Canty v. Day , et al., No. 13-CV-5629 (S.D.N.Y.) and Federman v. Day, et al., No. 13-CV-5977 (S.D.N.Y.). Plaintiffs allege that they are acting on behalf of the Company and name as defendants current and former directors and certain officers of the Company. The complaint challenges certain public disclosures and conduct relating to the March 2013 sheer luon issue, the Company's announcement that its CEO intends to resign, and certain stock trades executed by certain defendants prior to the Company's announcement regarding its CEO. The plaintiffs have designated the Canty complaint as their operative complaint and allege violations of Section 14(a) of the Securities Exchange Act and for breach of fiduciary duty, unjust enrichment, abuse of control, and gross mismanagement. The Defendants believe there is no merit to this suit and the Defendants intend to defend vigorously.

On July 2, 2013, plaintiff Houssam Alkhoury filed a putative shareholder class action entitled Alkhoury v. lululemon athletica inc., et al., No. 13-CV-4596 (S.D.N.Y.) against lululemon, a certain director and a certain officer of the Company (collectively, “Defendants”). On September 3, 2013, plaintiff Houssam Alkhoury and putative plaintiff Louisiana Sheriffs' Pension & Relief Fund moved to be appointed as lead plaintiff in the lawsuit. On October 1, 2013, the Court appointed Louisiana Sheriffs' Pension & Relief Fund as Lead Plaintiff and on November 1, Lead Plaintiff filed a consolidated class action complaint on behalf of a proposed class of purchasers of lululemon stock between September 7, 2012 through June 11, 2013 (the “Complaint”). In its Complaint, Lead Plaintiff asserts causes of action under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 against Defendants based on certain public disclosures made by the Company relating to its product quality and the March 2013 sheer luon issue. The Company believes there is no merit to this suit and the Company intends to defend vigorously.

On May 3, 2013, plaintiff Hallandale Beach Police Officers and Firefighters Personnel Retirement Fund filed a books-and-records action entitled Hallandale Beach Police Officers and Firefighters' Personnel Retirement Fund v. lululemon athletica inc., No. 8522 (Del. Ch.)., under 7 Del. C. Sec. 220 based on a demand letter it sent to us on April 17, 2013 to request certain lululemon records relating to the March 2013 sheer luon issue and recent revisions to our executive bonus plan. We moved to dismiss the complaint on May 28, 2013. On June 14, 2013, plaintiff sent a supplemental demand letter that requested additional records from us relating to our announcement that Ms. Day intends to resign as our Chief Executive Officer, and certain stock trades executed by our Chairman prior to our announcement regarding Ms. Day. On July 1, 2013, plaintiff filed an amended complaint to incorporate allegations relating to the June 14, 2013 supplemental demand letter. We moved to dismiss the amended complaint on August 15, 2013, and, in response to this filing, plaintiffs served the Company with a new demand letter and then filed a second amended complaint on November 4, 2013. We believe there is no merit to this action and we intend to continue to defend vigorously.

We are, from time to time, involved in routine legal matters incidental to our business. Management believes the ultimate resolution of any such current proceeding will not have a material adverse effect on our continued 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 Annual Report on Form 10-K for our 2012 fiscal year, the following risk factors should be considered carefully in evaluating our business. Our business, financial condition or results of operations could be materially adversely affected by any of these risks. Please note that additional risks not presently known to us or that we currently deem immaterial could also impair our business and operations.

Our success depends on our ability to maintain the value and reputation of our brand.

Our success depends on the value and reputation of the lululemon athletica brand. The lululemon athletica name is integral to our business as well as to the implementation of our strategies for expanding our business. Maintaining, promoting and positioning our brand will depend largely on the success of our marketing and merchandising efforts and our ability to

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provide a consistent, high quality 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 could be adversely affected if we fail to achieve these objectives or if our public image or reputation were to be tarnished by negative publicity. Negative publicity regarding the production methods of any of our suppliers or manufacturers could adversely affect our reputation and sales and force us to locate alternative suppliers or manufacturing sources. Additionally, while we devote considerable efforts and resources to protecting our intellectual property, if these efforts are not successful the value of our brand may be harmed, which could have a material adverse effect on our financial condition.

If any of our products are unacceptable to us or our guests, our business could be harmed.

We have occasionally received, and may in the future continue to 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 continue to receive, products that either meet our technical specifications but that are nonetheless unacceptable to us, or products that are otherwise unacceptable to us or our customers. 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 sell those products and related increased administrative and shipping costs. Additionally, if the unacceptability of our products are not discovered until after such products are purchased by our guests, our guests could lose confidence in the technical attributes of our products and our results of operations could suffer and our business could be harmed.

Our reliance on third-party suppliers to provide fabrics for and to produce our products could cause problems in our supply chain.

We do not manufacture our products or the raw materials for them and rely instead on third-party suppliers. Many of the specialty fabrics used in our products are technically advanced textile products developed and manufactured by third parties and may be available, in the short-term, from only one or a very limited number of sources. For example, luon fabric, which is included in many of our products, is supplied to the garment factories we use by a limited number of manufacturers, and the components used in manufacturing luon fabric may each be supplied to our manufacturers by single companies. In fiscal 2012, approximately 60% of our products were produced by our top five manufacturing suppliers, and 45% of raw materials were produced by a single manufacturer. We have no long term contracts with our suppliers or manufacturing sources, and we compete with other companies for fabrics, raw materials, production and import quota capacity.

We have experienced, and may in the future continue to experience, a significant disruption in the supply of fabrics or raw materials from current sources and we may be unable to locate alternative materials suppliers of comparable quality at an acceptable price, or at all. 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 all, or we may be unable to locate any supplier or manufacturer with sufficient capacity to meet our requirements or to fill 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. 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. 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 customer demand for our products and our results in lower net revenue and income from operations both in the short and long term.

An economic downturn 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. Factors affecting the level of consumer spending for such discretionary items include general economic conditions, particularly those in North America and other factors such as consumer confidence in future economic conditions, fears of recession, the availability of consumer credit, levels of unemployment, tax rates and the cost of consumer credit. 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. The current volatility in the United States economy in particular has resulted in an overall slowing in growth in the retail sector because of decreased consumer spending, which may remain depressed for the foreseeable future. These unfavorable economic conditions may lead consumers to delay or reduce purchase of our products. Consumer demand for our products may not reach our sales targets, or may decline, when there is an economic downturn or economic uncertainty in our key markets, particularly in North America. Our sensitivity to economic cycles and any related fluctuation in consumer demand may have a material adverse effect on our financial condition.

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Our sales and profitability may decline as a result of increasing product costs and decreasing selling prices.

Our business is subject to significant pressure on pricing and costs caused by many factors, including intense competition, constrained sourcing capacity and related inflationary pressure, pressure from consumers to reduce the prices we charge for our products and changes in consumer demand. These factors may cause us to experience increased costs, reduce our sales 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 conditions, operating results and cash flows.

If we are unable to anticipate consumer preferences and successfully develop and introduce new, innovative and updated 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 well as to anticipate and react to changing consumer demands in a timely manner. All 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 customers, 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. 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. Even if we are successful in anticipating consumer preferences, our ability to adequately react to and address those preferences will 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 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 materially harmed if we are unable to accurately forecast customer 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 customer demand for our products or for products of our competitors, our failure to accurately forecast customer acceptance of new products, product introductions by competitors, unanticipated changes in general market conditions, and weakening of economic conditions or consumer confidence in future economic conditions. If we fail to accurately forecast customer demand we may experience excess inventory levels or a shortage of products available for sale in our stores or for delivery to customers.

Inventory levels in excess of customer 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 customer 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 customer relationships.

Any material disruption of our information systems could disrupt our business and reduce our sales.

We are increasingly dependent on information systems to operate our e-commerce websites, process transactions, respond to guest inquiries, manage inventory, purchase, sell and ship goods on a timely basis and maintain cost-efficient operations. Any material disruption or slowdown of our systems, including a disruption or slowdown caused by our failure to successfully upgrade our systems, system failures, viruses, computer “hackers” or other causes, could cause information, including data related to customer orders, to be lost or delayed which could—especially if the disruption or slowdown occurred during the holiday season—result in delays in the delivery of products to our stores and customers or lost sales, which could reduce demand for our products and cause our sales to decline. 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 customers.

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.

We have expanded our operations rapidly since our inception in 1998 and our net revenue has increased from $40.7 million in fiscal 2004 to $1,370.4 million in fiscal 2012. 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 well 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

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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 serious 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.

The fluctuating cost of raw materials could increase our cost of goods sold and cause our results of operations and financial condition to suffer.

The fabrics used by our suppliers and manufacturers include synthetic fabrics whose raw materials include petroleum-based products. Our products also include 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 currencies of producer versus consumer countries and other factors that are generally unpredictable and beyond our control. Increases in the cost of raw materials, including petroleum or the prices we pay for 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.

Our limited operating experience and limited brand recognition in new international markets may limit our expansion strategy and cause our business and growth to suffer.

Our future growth depends in part on our international expansion efforts. We have limited experience with regulatory environments and market practices internationally, and we may not be able to penetrate or successfully 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 foreign 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 new international markets or disappointing growth outside of existing markets will harm our business and results of operations.

We operate in a highly competitive market and the size and resources of some of our competitors may allow them to 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 our market share, any of which could substantially 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 well as against retailers specifically 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, such as Nike, Inc., adidas AG, which includes the adidas and Reebok brands, and The Gap, Inc, which includes the Athleta brand. Because of the fragmented nature of the industry, we also compete with other apparel sellers, including those specializing in yoga apparel. 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. In addition, our technical athletic apparel is sold at a price premium to traditional athletic apparel.

Our competitors may be able to achieve and maintain brand awareness and market share more quickly and effectively than we can. In contrast to our “grassroots” marketing approach, many of our competitors promote their brands through traditional forms of advertising, such as print media and television commercials, and through celebrity endorsements, and have substantial resources to devote to such efforts. Our competitors may also create and maintain brand awareness using traditional forms of advertising more quickly than we can. Our competitors may also be able to increase sales in their new and existing markets faster than we do by emphasizing different distribution channels than we do, such as catalog sales or an extensive franchise network, as opposed to distribution through retail stores, wholesale or internet, and many of our competitors have substantial resources to devote toward increasing sales in such ways.

In addition, because we own no patents or exclusive intellectual property rights in the technology, fabrics or processes underlying our products, our current and future competitors are able to manufacture and sell products with performance characteristics, fabrication techniques and styling similar to our products.

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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 substantially all of our product distribution. Our distribution facilities include computer controlled and automated equipment, which means their operations are complicated and 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, because substantially all of our products are distributed from three locations, our operations could also be interrupted by labor difficulties, extreme or severe weather conditions or by floods, fires or other natural disasters near our distribution centers. For example, severe weather conditions in Sumner, Washington in 2011, including snow and freezing rain, resulted in disruption in our distribution facilities and the local transportation system. 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.

Our fabrics and manufacturing technology are not patented and can be imitated by our competitors.

The intellectual property rights in the technology, fabrics and processes used to manufacture our products are owned or controlled by our suppliers and are generally not unique to us. Our ability to obtain intellectual property protection for our products is therefore limited and we currently own no patents or exclusive intellectual property rights in the technology, fabrics or processes underlying our products. As a result, our current and future competitors are able to manufacture and sell 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 sell products based on our fabrics and manufacturing technology at lower prices than we can. If our competitors do sell similar products to ours at lower prices, our net revenue and profitability could suffer.

Our failure or inability to protect our intellectual property rights could diminish the value of our brand and weaken our competitive position.

We currently rely on a combination of copyright, trademark, trade dress and unfair competition laws, as well as confidentiality procedures and licensing arrangements, to establish and protect our intellectual property rights. We cannot assure you that the steps taken by us to protect our intellectual property rights will be adequate to prevent infringement of such rights by others, including imitation of our products and misappropriation of our brand. In addition, intellectual property protection may be unavailable or limited in some foreign countries where laws or law enforcement practices may not protect our intellectual property rights as fully as in the United States or Canada, and it may be more difficult for us to successfully challenge the use of our intellectual property rights by other parties in these countries. If we fail to protect and maintain our intellectual property rights, the value of our brand could be diminished and our competitive position may suffer.

We are subject to risks associated with leasing retail space subject to long-term and non-cancelable leases.

We lease the majority of our corporate-owned stores under operating leases and our inability to secure appropriate real estate or lease terms could impact our ability to grow. Our leases generally have initial terms of between five and ten years, and generally can be extended only in five-year increments if at all. We generally 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 commercially acceptable terms or at all, which could require us to close stores in desirable locations.

Increasing labor costs and other factors associated with the production of our products in China could increase the costs to produce our products.

During fiscal 2012, approximately 34% of our products were produced in China and increases in the costs of labor and other costs of doing business in China could significantly increase our costs to produce our products and could have a negative impact on our operations, revenue and earnings. Factors that could negatively affect our business include a potential significant revaluation of the Chinese Yuan, which may result in an increase in the cost of producing products in China, labor shortage and increases in labor costs in China, and difficulties in moving products manufactured in China out of Asia and through the ports on the western coast of North America, whether due to port congestion, labor disputes, product regulations and/or inspections or other factors, and natural disasters or health pandemics impacting China. Also, the imposition of trade sanctions or other regulations against products imported by us from, or the loss of “normal trade relations” status with, China, could significantly increase our cost of products imported into North America and/or Australia and harm our business.

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We may not be able to successfully open new store locations in a timely manner, if at all, which could harm our results of operations.

Our growth will largely depend on our ability to successfully open and operate new stores. Our approach to identifying locations for our stores typically favors street locations, lifestyle centers and malls where we can be a part of the community. As a result, our stores are typically located near retailers or fitness facilities that we believe are consistent with our guests’ lifestyle choices. Sales at these stores are derived, in part, from the volume of foot traffic in these locations. Our ability to successfully open and operate new stores depends on many factors, including, among others, our ability to:

• identify suitable store locations, the availability of which is outside of our control;

• negotiate acceptable lease terms, including desired tenant improvement allowances;

• hire, train and retain store personnel and field management;

• immerse new store personnel and field management into our corporate culture;

• source sufficient inventory levels; and

• successfully integrate new stores into our existing operations and information technology systems.

Successful new store openings may also be affected by our ability to initiate our grassroots marketing efforts in advance of opening our first store in a new market. We typically rely on our grassroots marketing efforts to build awareness of our brand and demand for our products. Our grassroots marketing efforts are often lengthy and must be tailored to each new market based on our emerging understanding of the market. Accordingly, there can be no assurance that we will be able to successfully implement our grassroots marketing efforts in a particular market in a timely manner, if at all. Additionally, we may be unsuccessful in identifying new markets where our technical athletic apparel and other products and brand image will be accepted or the performance of our stores will be considered successful.

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, as well 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, 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 sales.

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 foreign 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 foreign laws and regulations applicable to us. Although we have implemented procedures designed to ensure compliance with the FCPA and similar laws, there can be no assurance that all of our employees, agents and other channel partners, as well as those companies to which we outsource certain of our business operations, will not take actions in violation of our policies. Any such violation could have a material and adverse effect on our business.

Our future success is substantially dependent on the continued service of our senior management.

Our future success is substantially dependent on the continued service of our senior management and other key employees. The loss of the services of our senior management or other key employees could make it more difficult to successfully operate our business and achieve our business goals.

We also may be unable to retain existing management, technical, sales and client support personnel that are critical to our success, which could result in harm to our customer and employee relationships, loss of key information, expertise or know-how and unanticipated recruitment and training costs.

We do not maintain a key person life insurance policy on any of the other members of our senior management team. As a result, we would have no way to cover the financial loss if we were to lose the services of members of our senior management team.

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Our business is affected by seasonality.

Our business is affected by the general seasonal trends common to the retail apparel industry. Our annual net sales are weighted more heavily toward our fourth fiscal quarter, reflecting our historical strength in sales during the holiday season, while our operating expenses are more equally distributed throughout the year. As a result, a substantial portion of our operating profits are generated in the fourth quarter of our fiscal year. For example, we generated approximately 35%, 37% and 36% of our full year gross profit during the fourth quarters of fiscal 2012, fiscal 2011 and fiscal 2010, respectively. This seasonality may adversely affect our business and cause our results of operations to fluctuate, and, as a result, we believe that comparisons of our operating results between different quarters within a single fiscal year are not necessarily meaningful and that results of operations in any period should not be considered indicative of the results to be expected for any future period.

Because a significant portion of our sales are generated in countries other than the United States, fluctuations in foreign currency exchange rates have negatively affected our results of operations and may continue to do so in the future.

The reporting currency for our consolidated financial statements is the U.S. dollar. In the future, we expect to continue to derive a significant portion of our net revenue and incur a significant portion of our operating costs in Canada, and changes in exchange rates between the Canadian dollar and the U.S. dollar may have a significant, and potentially adverse, effect on our results of operations. Additionally, a portion of our net revenue is generated in Australia and New Zealand. Our primary risk of loss regarding foreign currency exchange rate risk is caused by fluctuations in the exchange rates between the U.S. dollar, Canadian dollar, Australian dollar and New Zealand dollar. As we recognize net revenue from sales in Canada in Canadian dollars, and the U.S. dollar has strengthened during the first three quarters of fiscal 2013, it has had a negative impact on our Canadian operating results upon translation of those results into U.S. dollars for the purposes of consolidation. However, the loss in net revenue was offset by lower cost of sales and lower selling, general and administrative expenses that are generated in Canadian dollars. A 10% depreciation in the relative value of the Canadian dollar compared to the U.S. dollar would have resulted in lost income from operations of approximately $3.8 million in the first three quarters of fiscal 2013. A 10% depreciation in the relative value of the Australian dollar compared to the U.S. dollar would have resulted in additional income from operations of less than $0.1 million in the first three quarters of fiscal 2013. We have not historically engaged in hedging transactions but in the future may at times enter into derivative financial instruments to mitigate foreign exchange risks. As we continue to recognize gains and losses in foreign currency transactions, depending upon changes in future currency rates, such gains or losses could have a significant, and potentially adverse, effect on our results of operations.

The operations of many of our suppliers are subject to additional risks that are beyond our control and that could harm our business, financial condition and results of operations.

Almost all of our suppliers are located outside of North America. During fiscal 2012, approximately 54% of our products were produced in South and South East Asia, approximately 34% in China, approximately 3% in North America and the remainder in the Peru, Israel, Egypt and other countries. As a result of our international suppliers, we are subject to risks associated with doing business abroad, including:

• political unrest, terrorism, labor disputes and economic instability resulting in the disruption of trade from foreign countries in which our products are manufactured;

• the imposition of new laws and regulations, including those relating to labor conditions, quality and safety standards, imports, duties, taxes and other charges on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds;

• reduced protection for intellectual property rights, including trademark protection, in some countries, particularly China;

• disruptions or delays in shipments; and

• changes in local economic conditions in countries where our manufacturers, suppliers or guests are located.

These and other factors beyond our control could interrupt our suppliers’ production in offshore facilities, influence the ability of our suppliers to export our products cost-effectively or at all and inhibit our suppliers’ ability to procure certain materials, any of which could harm our business, financial condition and results of operations.

Our ability to source our merchandise profitably or at all could be hurt if new trade restrictions are imposed or existing trade restrictions become more burdensome.

The United States and the countries in which our products are produced or sold internationally have imposed and may impose additional quotas, duties, tariffs, or other restrictions or regulations, or may adversely adjust prevailing quota, duty or tariff levels. We have expanded our relationships with suppliers outside of China, which among other things has resulted in increased costs and shipping times for some products. Countries impose, modify and remove tariffs and other trade restrictions

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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 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.

Our trademarks and other proprietary rights could potentially conflict with the rights of others and we may be prevented from selling some of our products.

Our success depends in large part on our brand image. We believe that our trademarks 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 obtained and applied for some United States and foreign trademark registrations, and will continue to evaluate the registration of additional trademarks as appropriate. However, we cannot guarantee that any of our pending trademark applications will be approved by the applicable governmental authorities. Moreover, even if the applications are approved, third parties may seek to oppose or otherwise challenge these registrations. Additionally, we cannot assure you that obstacles will not arise as we expand our product line and the geographic scope of our sales and marketing. Third parties may assert intellectual 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 selling 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.

Our founder controls a significant percentage of our stock and is able to exercise significant influence over our affairs.

Our founder, Dennis Wilson, beneficially owns approximately 28% of our common stock. As a result, Mr. Wilson is able to influence or control matters requiring approval by our stockholders, including the election of directors and the approval of mergers, acquisitions or other extraordinary transactions. This concentration of ownership may have various effects including, but not limited to, delaying, preventing or deterring a change of control of our company.

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;

• 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 called 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 generally 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 following 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 following table provides information regarding our purchases of our common stock during the thirteen weeks ended November 3, 2013:

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Period(1)	Total Number of Shares Purchased(2)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(3)	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(2,3)
August 5, 2013 - September 1, 2013	8,541	$	70.91	8,541	5,468,816
September 2, 2013 - October 6, 2013	7,127	69.95		7,127	5,461,689
October 7, 2013 - November 3, 2013	6,914	73.80		6,914	5,454,775
Total	22,582			22,582

(1) Monthly information is presented by reference to our fiscal months during our third quarter of fiscal 2013.

(2) Excluded from this disclosure are shares repurchased to settle statutory employee tax withholding related to the vesting of performance-based restricted stock unit awards.

(3) Our Employee Share Purchase Plan (ESPP) was approved by our Board of Directors and stockholders in September 2007. All shares purchased under the ESPP are purchased on the Nasdaq Global Select Market (or such other stock exchange as we may designate from time to time). Unless our Board of Directors terminates the ESPP earlier, the ESPP will continue until all shares authorized for purchase under the ESPP have been purchased. The maximum number of shares authorized to be purchased under the ESPP is 6,000,000.

ITEM 6. EXHIBITS

		Incorporated by Reference
Exhibit No.	Exhibit Title	Filed Herewith	Form	Exhibit No.	File No.	Filing Date
10.1*	Executive Employment Agreement, effective as of October 15, 2013 between lululemon athletica inc. and Tara Poseley	X
31.1	Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a-14(a)	X
31.2	Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a-14(a)	X
32.1	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
101**	The following financial statements from the Company’s 10-Q for the fiscal quarter ended November 3, 2013, formatted in XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income, (iii) Consolidated Statements of Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows (v) Notes to the Consolidated Financial Statements

*	Denotes a compensatory plan, contract or arrangement, in which or directors or executive officers may participate.
**	Furnished herewith

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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/ JOHN E. CURRIE
	John E. Currie
	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

Dated: December 11, 2013

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Exhibit Index

Exhibit No.	Exhibit Title	Filed Herewith	Form	Exhibit No.	File No.	Filing Date
10.1*	Executive Employment Agreement, effective as of October 15, 2013 between lululemon athletica inc. and Tara Poseley	X
31.1	Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a-14(a)	X
31.2	Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a-14(a)	X
32.1	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
101**	The following financial statements from the Company’s 10-Q for the fiscal quarter ended November 3, 2013, formatted in XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations and Comprehensive Income, (iii) Consolidated Statements of Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows (v) Notes to the Consolidated Financial Statements

*	Denotes a compensatory plan, contract or arrangement, in which or directors or executive officers may participate.
**	Furnished herewith

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EX-10.1

Exhibit 10.1

Private and Confidential

This Agreement is dated for reference as of October 15, 2013.

To:    Tara Poseley

Dear Tara:

Re:    Executive Employment Agreement

This Agreement contains the terms and conditions of our offer of employment in the position of Executive Vice President, Chief Product Officer. This Agreement will take effect as of the Effective Date and will continue until terminated in accordance with its terms.

If you accept employment on the terms and conditions set out below, please execute this Agreement where indicated.

ARTICLE 1 - INTERPRETATION

1.01 Definitions

In this Agreement, unless something in the subject matter or context is inconsistent therewith:

“Affiliate” has the meaning attributed to such term in the Canada Business Corporations Act and includes each direct and indirect subsidiary of the Company and any other entities, including joint ventures and franchises, in which the Company has an interest.

“Agreement” means this agreement, including its recitals and schedules, as amended from time to time in accordance with Section 6.05.

“Approvals” means collectively, a Canadian work permit and all other necessary authorizations and approvals for the Executive to work in Canada.

“Base Salary” has the meaning attributed to such term in Section 3.01.

“Board” means the board of directors of the Company in office from time to time.

“Bonus Plan” means the Company's Executive Bonus Plan as amended by the Company from time to time.

“Cause” means (a) acts or omissions constituting gross negligence, recklessness or willful misconduct on the part of Executive with respect to the Executive’s obligations or otherwise relating to the business of Company; (b) any acts or conduct by the Executive that are materially adverse to the Company’s interests; (c) the Executive’s material breach of this Agreement; (d) the Executive’s conviction or entry of a plea of nolo contendere for fraud, misappropriation or embezzlement, or any felony or crime of moral turpitude or that otherwise negatively impacts the Executive’s ability to effectively perform the Executive’s duties hereunder; (e) the Executive’s willful neglect of duties; (f) the Executive’s breach of the warranties and affirmations set forth in this Agreement or, (g) while employed in Canada, Cause shall have the usual meaning

of just cause under the common law. In the event of any of the foregoing, the Executive will have fifteen (15) days from receipt of notice from the Company to cure the issue, if curable, and failure to timely effect such cure shall entitle the Company to terminate the Executive's employment for Cause.

“Company” means lululemon athletica inc., a Delaware corporation.

“Compensation Committee” means the compensation committee of the Board.

“Effective Date” of this Agreement means November 11, 2013, unless Executive elects to start on an earlier date.

“Executive” means Tara Poseley.

“Plan” means the Company’s 2007 Equity Incentive Plan.

“Relocation” has the meaning attributed to such term in Section 2.03(2).

“Restrictive Covenant Agreement” has the meaning attributed to such term in Section 4.05.

“Termination Date” has the meaning attributed to such term in Section 5.01.

ARTICLE 2 - EMPLOYMENT

2.01 Employment

(1)Subject to the terms and conditions of this Agreement, the Company will, commencing on the Effective Date, employ the Executive in the position of Executive Vice‑President, Chief Product Officer, on the terms and conditions set out herein.

(2)The Executive will report to the Chief Executive Officer (the “CEO”) of the Company.

(3)The Executive will perform the duties and functions of an Executive Vice-President, Chief Product Officer of a corporation in a business and of a size similar to the Company and such other services and duties as may reasonably be assigned from time to time by the CEO, subject always to the control and direction of the CEO.

2.02 Term

The term of this Agreement and the Executive’s employment under this Agreement will commence on the Effective Date and will continue for an indefinite period, subject to termination in accordance with the terms of this Agreement. While employed by Company in the United States, Executive’s employment shall be at-will, subject to the provisions regarding termination set forth below, which means that Company recognizes the Executive’s right to terminate the relationship at any time and for any reason, and similarly, the Company reserves the right to alter, modify or terminate the relationship at any time with or without cause or advance notice.

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2.03 Place of Employment/Affirmation for Approvals

(1)Until the Relocation, the Executive will be based in San Francisco, California. During the Executive’s employment with the Company, both before and after the Relocation, Executive’s position shall require frequent travel to Company’s offices and retail stores, wherever located, as directed by the Company.

(2)Within thirty (30) days after the Approvals are granted, the Executive will relocate her primary residence to Vancouver, B.C. (the “Relocation”) and will perform her work and services for the Company at the principal executive offices of the Company and the Executive will reside within a reasonable daily commuting distance of such offices.

(3)The Executive warrants and affirms that there exist no circumstances with respect to her professional or personal history that would prevent the Executive from obtaining the Approvals. The Company agrees to pay all costs and expenses in connection with processing and obtaining the Approvals for the Executive, including, without limitation, reimbursing the Executive if the Executive has to travel to Canada or engage her own counsel as part of the process of obtaining the work permit.

ARTICLE 3 - REMUNERATION AND BENEFITS

3.01 Base Salary

The Company will pay the Executive a base salary (the “Base Salary”) in the amount of USD$600,000 per annum before the Relocation, or CAD $600,000 per annum after the Relocation. The Base Salary will be payable in accordance with the Company’s usual payroll practices and dates, andsubject to deductions required by law or authorized by the Executive. The Executive will be eligible for an annual merit increase on or about March of each year, beginning in March 2014.

3.02 Bonus

(1)The Executive will be eligible to receive an annual bonus pursuant to the terms and conditions of the Bonus Plan. The Executive’s bonus target under the Bonus Plan shall be 75% of Base Salary, provided the target bonus for 2013 shall be 75% of the Executive’s pro-rated Base Salary received in 2013.

(2)In exchange for Executive accepting employment with the Company and remaining employed for a period of twelve (12) months (“Retention Period”), the Company agrees to provide the Executive with a retention bonus in the amount of USD $300,000 (“Retention Bonus”), less applicable tax and other withholdings. Within fifteen (15) days following the Effective Date of this Agreement, the Company will pay to the Executive the Retention Bonus in advance of the Executive actually having remained employed for the Retention Period. The Retention Bonus is an advance of wages that the Executive has not yet earned. Because the Company is advancing this unearned Retention Bonus to the Executive in anticipation of retaining the Executive’s services for at least twelve (12) months, in the event the Executive should voluntarily resign Executive’s employment with the Company or is terminated for Cause prior to completing the Retention Period, the Executive will reimburse the Company the Retention Bonus in full within 15 days of the date of such resignation or termination. Should the Company terminate the Executive's employment without Cause or due to the Executive's death or disability at any

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time prior to the Executive completing the Retention Period, or should the Executive terminate her employment for Good Reason (as defined below) during the Retention Period, then the Retention Bonus shall be considered earned in full on the date of such termination and it shall not be repaid or reimbursed by the Executive (or her estate) to the Company. For purposes of this Section 3.02(2) only, Executive will be deemed to have resigned for Good Reason if Executive voluntarily terminates Executive’s employment with Company within thirty (30) days after the occurrence of one or more of the following circumstances: (a) a material reduction in Executive’s Base Salary or (b) a material diminution of Executive’s duties so that Executive’s duties are no longer consistent with the position of a senior executive reporting directly to the CEO, without Executive’s prior written approval; provided, however, that Company has been provided with written notice of the circumstance and fifteen (15) days from receipt of written notice in which to cure such circumstance.

3.03 Onboarding Equity

(1)Subject to the approval of the Compensation Committee, the Executive will be awarded a one-time grant of performance-based restricted stock units consisting of the right to receive on the settlement date 8,360 shares of the Company’s common stock (“PSUs”), in accordance with the Plan and pursuant to the Company’s applicable agreements, practices and policies on granting PSU awards, including the Company’s standard PSU award agreement. The PSUs will be subject to a three year performance period consisting of the Company’s 2013, 2014 and 2015 fiscal years based on the Company’s achievement of certain financial performance measures determined by the Compensation Committee. The PSUs will have a vesting date on or about the third anniversary of the effective grant date.

(2)Subject to the approval of the Compensation Committee, the Executive will be awarded a one-time grant of stock options to purchase 17,570 shares of the Company’s common stock (“Options”) in accordance with the Plan and pursuant to the Company’s applicable agreements, practices and policies on granting stock options, including the Company’s standard stock option agreement. Such Options shall have a per share exercise price equal to the closing sale price of a share of the Company’s common stock as reported on the Nasdaq Global Select Market on the effective grant date. The Options will vest in equal instalments over four years (25% per year) on the anniversary of the effective grant date.

3.04 Incentives

As an employee of the Company, the Executive will be eligible for annual equity awards as determined by the Compensation Committee currently consisting of stock options and PSU awards, based on the Executive’s position.

3.05 Benefits

The Executive will be entitled to participate in all of the Company's benefit plans generally available to its senior executives from time to time, including and without limitation, health, disability and death, subject to and in accordance with the terms and conditions of the applicable plans, subject to any express limitations by this Agreement or unless a greater benefit is expressly provided to the Executive under this Agreement. The Executive further acknowledges that the Company may amend or terminate the benefit plans from time to time.

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3.06 Plan documents and right to change

(1)Some of the compensation and benefit plans and programs referred to in this Agreement are governed by insurance contracts and other plan or policy documents, which will in all cases govern.

(2)The Company reserves the right to amend, change or terminate any or all of its plans, programs, policies and benefits at any time for any reason without notice to the Executive, including without limitation bonus, commission, benefit, or compensation plans and programs.

3.07 Vacation

The Executive will be entitled to accrue up to four (4) weeks paid vacation each year. Such vacation entitlement will be pro-rated for any part of a year. The Executive will take such vacation at times having regard to the best interests of the Company pursuant to the Company’s vacation policy. Except as may be required by applicable law, upon separation of employment, the Executive will not be paid out for any accrued but unused vacation and the Executive agrees that any unearned advanced vacation may be deducted from the Executive’s final pay should her employment with the Company end for any reason.

3.08 Relocation and Temporary Living Expenses

(1)Contingent upon and following the Executive’s receipt of the Approvals, the Company will provide the Executive with the following:

(a) Relocation services through a third party vendor as per the Company’s relocation policy. The Company will pay for the following items in connection with the Executive’s Relocation to Vancouver, B.C. (collectively the “Relocation Fees”):

(i) the reasonable cost of travel for the Executive and her immediate family to Vancouver, Canada;

(ii) the reasonable cost of transporting the Executive’s household goods and vehicles to Vancouver;

(iii) One house hunting trip for the Executive’s family to Vancouver, as per the Company’s relocation policy;

(iv) Two house hunting trips for the Executive and her spouse to Vancouver, as per the Company’s relocation policy; and

(b) In addition, following the Relocation the Executive will receive a flex budget of up to CAD $10,000 (the “Flex Budget”) in accordance with the Company’s Flex Budget Policy for reasonable expenses relating to the relocation but not covered under items (1)(a)(i) and (ii). The Executive must submit receipts for reimbursement in order to use the Flex Budget. The Company will also remit up to 43.7% of the tax due to the Canada Revenue Agency (or comparable US Agency) on the relocation benefits in this Section 3.08 (the “Gross Up Amounts”) on behalf of the Executive.

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(2)If the Executive terminates her employment with the Company for other than Good Reason (as defined in Section 3.02(2)) or is terminated for Cause any time within one year following the Effective Date, the Executive agrees to repay to the Company the cost of the Relocation Fees, the Flex Budget and Gross Up Amounts. The Executive shall not be required to repay to the Company the cost of the Relocation Fees, the Flex Budget and Gross Up Amounts if the Company terminates the Executive's employment without Cause or due to the Executive's death or disability, or should the Executive terminate her employment for Good Reason (as defined in Section 3.02(2)).

3.09 Temporary Living Provision

(1)The Company will provide the Executive with accommodation in a furnished one bedroom apartment in Vancouver (or in reasonable alternative accommodation), from the grant of the Approvals until Executive’s Relocation, provided the Relocation must be completed no later than thirty (30) days after the Approvals are granted.

(2)During any time between Executive’s Relocation and the relocation of the Executive’s family to Vancouver, the Executive will be provided with reimbursement for up to two economy round trip flights for the Executive to travel from Vancouver to San Francisco, per calendar month, provided that Executive shall be required to relocate her family to Vancouver no later than July 1, 2014.

3.10 Tax Advice

The Company will pay for the services of an accountant chosen by the Company to assist with the Executive’s tax filing in Canada and the USA for the 2013 and 2014 tax filing years.

3.11 Expenses

Other than the relocation expenses specifically addressed in this Agreement, the Company will reimburse the Executive for all reasonable out-of-pocket expenses properly incurred by her in the course of the Executive’s employment with the Company, in accordance with the Company’s expense reimbursement policy in effect as at the date the Executive incurs any such expenses. The Executive will provide the Company with appropriate statements and receipts verifying such expenses as the Company may require.

ARTICLE 4 - EXECUTIVE’S COVENANTS

4.01 Full Time Service

The Executive will devote all of her time, attention and effort to the business and affairs of the Company, and will well and faithfully serve the Company and will use her best efforts to promote the interests of the Company and its Affiliates.

4.02 Duties and Responsibilities

The Executive will duly and diligently perform all of the duties assigned to her while in the employ of the Company provided such duties and responsibilities are consistent and commensurate with her position as Executive Vice-President, Chief Product Officer.

6

4.03 Policies, Rules and Regulations

The Executive will be bound by and will faithfully observe and abide by all of the policies, rules and regulations of the Company from time to time in force which are applicable to senior executives of the Company and which are brought to her notice or of which she should reasonably be aware, including but not limited to the Company’s Code of Business Conduct and Ethics and Integrity Line.

4.04 Conflict of Interest

The Executive will refrain from any situation that may create, seem to create, or be perceived to create a conflict between the Executive’s personal interest and the interests of the Company. If the Executive feels that she may have a conflict of interest or a potential conflict of interest, the Executive will disclose the situation to, and obtain approval from, the CEO.

4.05 Restrictive Covenants

Effective commencing on the Relocation, the Executive agrees to be bound by the terms and conditions of the Restrictive Covenant Agreement (the “Restrictive Covenant Agreement”) between the Company and the Executive, a copy of which is attached to this Agreement as Schedule A and is incorporated by reference and deemed to be a part of this Agreement.

ARTICLE 5 - TERMINATION

5.01 Termination by the Company

The Company may terminate the Executive’s employment with the Company at any time by giving notice in writing to the Executive and stipulating the last day of employment (the “Termination Date”).

5.02Termination by the Executive

The Executive may terminate her employment with the Company at any time by giving the Company thirty (30) days’ notice in writing (the “Notice of Resignation Period”). The Company may waive such notice, in whole or in part, in which case the Executive shall only be entitled to (i) payment of the Executive’s Base Salary for the period from the effective date of the waiver of the Notice of Resignation Period to the end of the Notice of Resignation Period; (ii) continued group benefit coverage under Section 3.05, subject to and in accordance with the terms and conditions of the applicable plans, for the period ending the last day of the Notice of Resignation Period; (iii) the value of the pro-rated vacation leave with pay for that portion of the calendar year up to the end of the Notice of Resignation Period, and (iv) any payments or entitlements under the Bonus Plan that the Executive would otherwise receive during the Notice of Resignation Period.

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5.03 Payments on Termination Without Cause, for Constructive Dismissal, or due to the Executive's Disability

(1)If the Executive's employment with the Company is terminated by the Company without Cause, then the Executive will only be entitled to the following payments and benefits:

(a) Accrued Compensation. The Company will pay the Executive her Base Salary accrued and unpaid up to and including the Termination Date, including accrued vacation pay, at the rate in effect at the time notice of termination is given by the Company.

(b) Bonus Compensation. The Executive shall not receive any bonus payment whatsoever pursuant to Section 3.02 or the Bonus Plan except such bonus which is already earned and due to be paid up to and including the Termination Date, notwithstanding any period following the Termination Date during which the Executive may receive any payments or benefits under the terms of this Agreement or at law.

(c) Notice or Pay in lieu/Severance. The Executive will be entitled to fifteen months’ notice or payment of Base Salary (at the rate in effect prior to the event of termination) in lieu, or a combination of notice and payment (“Severance Payment”). Any payment made pursuant to this Section 5.03(1)(c) shall be:

(i) less any termination or severance pay paid pursuant to the Employment Standards Act, British Columbia,

(ii) subject to regular and statutory withholdings,

(iii) paid in equal instalments on the Company’s normal paydays beginning on the first regular payday occurring 60 days following the termination date, and

(iv) for any payment above the minimum required under the Employment Standards Act (British Columbia), contingent upon the Executive compliance with all surviving provisions of this Agreement and the Executive’s execution of a full general release in a form acceptable to the Company, releasing all claims, known or unknown, that the Executive may have against the Company arising out of or any way related to the Executive’s employment or termination of employment with Company, and such release has become effective in accordance with its terms prior to the 60th day following the Termination Date.

(d) Any amounts owing to the Executive pursuant to Section 5.03(1)(c) that are above the minimum required under the Employment Standards Act (British Columbia) are paid in consideration of Executive’s compliance with the Restrictive Covenant Agreement and, accordingly, shall be forfeited if the Executive fails to comply with the Restrictive Covenant Agreement.

(e) Performance Share Units and Stock Options. The Executive’s rights regarding the PSU’s, the Options, and any other Performance Share Units or stock options from the Company will

8

be governed by the terms of the Plan and the applicable Performance Share Unit agreements, stock option agreements, and policies.

(f) Deductions. The Company may deduct from the amounts payable by it to the Executive or for her benefit pursuant to Section 5.03(1)(a), (b) or (c), any amounts owing to the Company by the Executive. Any deduction of an amount payable pursuant to this provision shall not occur until the amount is otherwise payable to the Executive.

(g) Fair and Reasonable. The parties agree that the provisions of Section 5.03 are fair and reasonable and that the amounts payable by the Company to the Executive or for her benefit pursuant to Section 5.03 are reasonable.

(h) No Other Payments or Benefits. The terms and conditions of this Section 5.03 and the amounts paid and the benefits provided to the Executive hereunder are in full satisfaction of any payments or benefits which the Executive may otherwise have been entitled to receive in relation to the termination of this Agreement and her employment hereunder pursuant to the common law and any applicable laws, including, without limitation, the British Columbia Employment Standards Act, the British Columbia Human Rights Code, or any of the Bonus Plan or the Company’s programs, policies, plans, contracts or agreements, whether written or verbal. Upon receipt of the payments and benefits described herein, the Executive will have no action, cause of action, claim or demand against the Company, the Company’s Affiliates or any other person arising out of or in relation to the Executive’s employment under this Agreement or the termination of this Agreement and the Executive’s employment hereunder, other than to enforce the terms of this Agreement and remedy any breach thereof by the Company.

(i) No Mitigation. The Executive shall not be required to mitigate the amount of any payments provided for under Section 5.03 of this Agreement by seeking other employment nor shall any payment provided for in such Section be reduced by any compensation or remuneration and/or benefits earned by the Executive as a result of employment by another employer or the rendering of services after the date of termination.

5.04 Payments on Termination by Company for Cause

(1)If the Executive’s employment with the Company is terminated by the Company for Cause, the Executive will only be entitled to receive the following compensation:

(a) Accrued Base Salary. The Company will pay the Executive her Base Salary accrued but unpaid up to and including the Termination Date, including accrued vacation pay, at the rate in effect at the time the notice of termination is given.

(b) Accrued Expenses. The Company will reimburse the Executive for any business expenses reasonably incurred by the Executive up to and including the Termination Date in accordance with the Company's normal expenses policy applicable to the Executive at that time.

9

(c) Bonus Compensation. The Executive shall not receive any bonus payment whatsoever pursuant to Section 3.02 or the Bonus Plan except such bonus which is already earned and due to be paid up to and including the Termination Date, notwithstanding any period following the Termination Date during which the Executive may receive any payments or benefits under the terms of the Agreement.

(d) Performance Share Units and Stock Options. The Executive’s rights regarding the PSUs, the Options, and any other Performance Share Units or stock options from the Company will be governed by the terms of the Plan and the applicable Performance Share Unit agreements, stock option agreements, and policies.

5.05 Fair and Reasonable

The Executive acknowledges and agrees that the payments and/or benefits pursuant to this Article 5 will be in full satisfaction of all terms or requirements regarding termination of the Executive’s employment, including without limitation common law notice of termination or compensation in lieu of such notice and compensation for length of service and any other entitlement pursuant to the British Columbia Employment Standards Act as amended from time to time. Except as expressly provided in this Article 5, the Executive will not be entitled to any termination payments, damages, or compensation whatsoever.

5.06 Return of Property

Upon termination of her employment with the Company, the Executive will deliver or cause to be delivered to the Company promptly all books, documents, money, securities or other property of the Company that are in the possession, charge, control or custody of the Executive.

5.07 No Termination Claims

Upon any termination of the Executive’s employment by the Company in compliance with this Agreement or upon any termination of the Executive’s employment by the Executive, the Executive will have no action, cause of action, claim or demand against the Company, its Affiliates, any related or associated corporations or any other person as a consequence of such termination.

5.08 Resignation as Director and Officer

Upon any termination of the Executive’s employment under this Agreement, the Executive will be deemed to have resigned as a director and officer of all Affiliates of the Company contemporaneously with the date of termination of the Executive’s employment for any reason and will immediately, on request of the Company, sign forms of resignation indicating her resignation as a director and officer of the Company and any Affiliates of the Company and of any other entities of which the Executive occupies similar positions as part of or in connection with the performance by the Executive of her duties under this Agreement, if applicable.

10

5.09 Provisions which Operate Following Termination

Notwithstanding any termination of the Executive’s employment under this Agreement for any reason whatsoever and with or without cause, all provisions of this Agreement necessary to give efficacy thereto, including without limitation the Restrictive Covenant Agreement, will continue in full force and effect following such termination.

ARTICLE 6 - MISCELLANEOUS

6.01 Application of Section 409A.

(1)Notwithstanding anything set forth in this Agreement to the contrary, no amount payable pursuant to this Agreement which constitutes a “deferral of compensation” within the meaning of the Treasury Regulations issued pursuant to Section 409A of the Code (the “Section 409A Regulations”) shall be paid unless and until the Executive has incurred a “separation from service” within the meaning of the Section 409A Regulations. Furthermore, to the extent that the Executive is a “specified employee” within the meaning of the Section 409A Regulations as of the date of the Executive’s separation from service, no amount that constitutes a deferral of compensation which is payable on account of the Executive’s separation from service shall be paid to the Executive before the date (the “Delayed Payment Date”) which is first day of the seventh month after the date of the Executive’s separation from service or, if earlier, the date of the Executive’s death following such separation from service. All such amounts that would, but for this Section, become payable prior to the Delayed Payment Date will be accumulated and paid on the Delayed Payment Date.

(2)The Company intends that income provided to the Executive pursuant to this Agreement will not be subject to taxation under Section 409A of the Code. The provisions of this Agreement shall be interpreted and construed in favor of satisfying any applicable requirements of Section 409A of the Code. However, the Company does not guarantee any particular tax effect for income provided to the Executive pursuant to this Agreement. In any event, except for the Company’s responsibility to withhold applicable income and employment taxes from compensation paid or provided to the Executive, the Company shall not be responsible for the payment of any applicable taxes on compensation paid or provided to the Executive pursuant to this Agreement.

(3)Notwithstanding anything herein to the contrary, the reimbursement of expenses or in-kind benefits provided pursuant to this Agreement shall be subject to the following conditions: (1) the expenses eligible for reimbursement or in-kind benefits in one taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits in any other taxable year; (2) the reimbursement of eligible expenses or in-kind benefits shall be made promptly, subject to the Company’s applicable policies, but in no event later than the end of the year after the year in which such expense was incurred; and (3) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.

(4)For purposes of Section 409A of the Code, the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments.

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6.02 Deductions

The Company will deduct all statutory deductions and any amounts authorized by the Executive from any amounts to be paid to the Executive under this Agreement.

6.03 Entire Agreement

This Agreement, including the Schedules to this Agreement, the Bonus Plan, the Plan, and the Restrictive Covenant Agreement, the Company’s standard stock option agreement and the Company’s standard PSU award agreement, constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and cancels and supersedes any prior understandings and agreements between the parties to this Agreement with respect to the subject matter of this Agreement and any rights which the Executive may have by reason of any such prior agreements. There are no representations, warranties, forms, conditions, undertakings or collateral agreements, express, implied or statutory between the parties other than as expressly set forth in this Agreement.

6.04 Severability

If any provision of this Agreement is determined to be invalid or unenforceable in whole or in part, such invalidity or unenforceability will attach only to such provision or part of such provision and the remaining part of such provision and all other provisions of this Agreement will continue in full force and effect.

6.05 Amendments and Waivers

No amendment to this Agreement will be valid or binding unless set forth in writing and duly executed by both of the parties. No waiver of any breach of any provision of this Agreement will be effective or binding unless made in writing and signed by the party purporting to give the same and, unless otherwise provided in the written waiver, will be limited to the specific breach waived.

6.06 Notices

Any demand, notice or other communication to be given in connection with this Agreement must be given in writing and will be given by personal delivery, by registered mail, or by electronic means of communication addressed to the recipient as follows:

To the Company:

lululemon athletica inc.

1818 Cornwall Avenue

Vancouver, BC

V6J 1C7

Attention: Director of Legal

To the Executive:

Tara Poseley

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or such other address, individual or electronic communication number as may be designated by notice given by either party to the other.

6.07 Governing Law/Venue

Before the Relocation, this Agreement will be governed by and construed in accordance with the laws of Delaware. After the Transition Date, this Agreement will be governed by and construed in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein. Each party consents to the jurisdiction and venue of the courts in Vancouver, British Columbia, if applicable, in any action, suit, or proceeding arising out of or relating to this Agreement

Yours truly,

lululemon athletica inc.

By:	/s/ CHRISTINE DAY
	Chief Executive Officer
SIGNED, SEALED AND DELIVERED in the presence of:
		/s/ TARA POSELEY
Witness Signature		Tara Poseley

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EX-31.1

Exhibit 31.1

I, Christine M. Day, 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 all 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 generally 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 materially affected, or is reasonably likely to materially 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) All 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/    CHRISTINE M. DAY
	Christine M. Day
	Chief Executive Officer and Director
	(Principal Executive Officer)

Date: December 11, 2013

EX-31.2

Exhibit 31.2

I, John E. Currie, 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 all 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 generally 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 materially affected, or is reasonably likely to materially 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) All 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/    JOHN E. CURRIE
	John E. Currie
	Chief Financial Officer
	(Principal Financial Officer and
	Principal Accounting Officer)

Date: December 11, 2013

EX-32.1

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 third quarter of fiscal 2013, 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 fully 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 all material respects, the financial condition and results of operations of the Company.

By:	/S/    CHRISTINE M. DAY
	Christine M. Day
	Chief Executive Officer and Director
	(Principal Executive Officer)

Date: December 11, 2013

By:	/S/    JOHN E. CURRIE
	John E. Currie
	Chief Financial Officer
	(Principal Financial Officer)

Date: December 11, 2013

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.

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Earnings Per Share (Tables)

9 Months Ended

Nov. 03, 2013

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earning Per Share

The details of the computation of basic and diluted earnings per share are as follows:

	Thirteen Weeks Ended November 3, 2013		Thirteen Weeks Ended October 28, 2012		Thirty-Nine Weeks Ended November 3, 2013		Thirty-Nine Weeks Ended October 28, 2012
Net income attributable to lululemon athletica inc.	$	66,111	$	57,316	$	169,855	$	161,181
Basic weighted-average number of shares outstanding	145,120		144,057		144,806		143,903
Effect of stock options assume exercised	894		1,691		1,161		1,847
Diluted weighted-average number of shares outstanding	146,014		145,748		145,967		145,750
Basic earnings per share	$	0.46	$	0.40	$	1.17	$	1.12
Diluted earnings per share	$	0.45	$	0.39	$	1.16	$	1.11

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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Nov. 03, 2013	Oct. 28, 2012	Nov. 03, 2013	Oct. 28, 2012
Income Statement [Abstract]
Net revenue	$ 379,900	$ 316,537	$ 1,070,195	$ 884,869
Cost of goods sold	175,294	141,237	508,909	396,550
Gross profit	204,606	175,300	561,286	488,319
Selling, general and administrative expenses	112,270	94,689	324,075	264,455
Income from operations	92,336	80,611	237,211	223,864
Other income (expense), net	1,453	1,424	4,249	3,500
Income before provision for income taxes	93,789	82,035	241,460	227,364
Provision for income taxes	27,678	24,655	71,605	65,308
Net income	66,111	57,380	169,855	162,056
Net income attributable to non-controlling interest	0	64	0	875
Net income attributable to lululemon athletica inc.	66,111	57,316	169,855	161,181
Basic earnings per share (in dollars per share)	$ 0.46	$ 0.40	$ 1.17	$ 1.12
Diluted earnings per share (in dollars per share)	$ 0.45	$ 0.39	$ 1.16	$ 1.11
Basic weighted-average number of shares outstanding	145,120	144,057	144,806	143,903
Diluted weighted-average number of shares outstanding	146,014	145,748	145,967	145,750
Other comprehensive income:
Foreign currency translation adjustment	(9,153)	2,642	(35,501)	(381)
Comprehensive income	$ 56,958	$ 59,958	$ 134,354	$ 160,800

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Earnings Per Share

9 Months Ended

Nov. 03, 2013

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS PER SHARE

The details of the computation of basic and diluted earnings per share are as follows:

	Thirteen Weeks Ended November 3, 2013		Thirteen Weeks Ended October 28, 2012		Thirty-Nine Weeks Ended November 3, 2013		Thirty-Nine Weeks Ended October 28, 2012
Net income attributable to lululemon athletica inc.	$	66,111	$	57,316	$	169,855	$	161,181
Basic weighted-average number of shares outstanding	145,120		144,057		144,806		143,903
Effect of stock options assume exercised	894		1,691		1,161		1,847
Diluted weighted-average number of shares outstanding	146,014		145,748		145,967		145,750
Basic earnings per share	$	0.46	$	0.40	$	1.17	$	1.12
Diluted earnings per share	$	0.45	$	0.39	$	1.16	$	1.11

The Company’s calculation of weighted-average shares includes the common stock of the Company as well as the exchangeable shares. Exchangeable shares are the equivalent of common shares in all material respects. All classes of stock have in effect the same rights and share equally in undistributed net income. For the thirty-nine weeks ended November 3, 2013 and October 28, 2012, 63 and 53 stock options, respectively, were anti-dilutive to earnings and therefore have been excluded from the computation of diluted earnings per share.

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Earnings Per Share - Computation of Basic and Diluted Earning Per Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Nov. 03, 2013	Oct. 28, 2012	Nov. 03, 2013	Oct. 28, 2012
Earnings Per Share [Abstract]
Net income attributable to lululemon athletica inc.	$ 66,111	$ 57,316	$ 169,855	$ 161,181
Basic weighted-average number of shares outstanding (in shares)	145,120	144,057	144,806	143,903
Effect of stock options assume exercised (in shares)	894	1,691	1,161	1,847
Diluted weighted-average number of shares outstanding (in shares)	146,014	145,748	145,967	145,750
Basic earnings per share (in dollars per share)	$ 0.46	$ 0.40	$ 1.17	$ 1.12
Diluted earnings per share (in dollars per share)	$ 0.45	$ 0.39	$ 1.16	$ 1.11

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Inventories (Tables)

9 Months Ended

Nov. 03, 2013

Inventory Disclosure [Abstract]

Summary of Inventories

	November 3, 2013			February 3, 2013
Finished goods	$	232,270		$	163,008
Raw materials	568			583
Provision to reduce inventory to market value	(26,684		)	(8,369		)
	$	206,154		$	155,222

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Inventories - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	Nov. 03, 2013	Feb. 03, 2013
Inventories Net [Line Items]
Provision to reduce inventory to market value	$ 26,684	$ 8,369
Cost of Sales [Member]
Inventories Net [Line Items]
Provision to reduce inventory to market value	$ 17,469

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Inventories - Summary of Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Nov. 03, 2013	Feb. 03, 2013
Inventory Disclosure [Abstract]
Finished goods	$ 232,270	$ 163,008
Raw materials	568	583
Provision to reduce inventory to market value	(26,684)	(8,369)
Total inventories	$ 206,154	$ 155,222

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Earnings Per Share - Additional Information (Detail) In Thousands, unless otherwise specified	9 Months Ended
	Nov. 03, 2013	Oct. 28, 2012
Earnings Per Share [Abstract]
Anti-dilutive stock options (in shares)	63	53

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Nov. 03, 2013	Oct. 28, 2012
Cash flows from operating activities
Net income	$ 169,855	$ 162,056
Items not affecting cash
Provision for inventories	18,316	724
Depreciation and amortization	36,723	30,962
Stock-based compensation	12,453	11,828
Excess tax benefits from stock-based compensation	(6,453)	(7,172)
Other, including net changes in other non-cash balances
Prepaid tax installments	(12,124)	(9,315)
Other prepaid expenses and other current assets	(14,645)	(6,965)
Inventories	(72,052)	(61,262)
Accounts payable	3,728	(7,958)
Accrued liabilities	7,230	11,048
Sales tax collected	270	(7,573)
Income taxes payable	(40,272)	(1,858)
Accrued compensation and related expenses	(1,474)	(663)
Other non-cash balances	(6,749)	(612)
Net cash provided by operating activities	94,806	113,240
Cash flows from investing activities
Purchase of property and equipment	(71,945)	(72,041)
Net cash used in investing activities	(71,945)	(72,041)
Cash flows from financing activities
Proceeds from exercise of stock options	7,478	6,978
Excess tax benefits from stock-based compensation	6,453	7,172
Purchase of non-controlling interest	0	(26,013)
Taxes paid related to net share settlement of equity awards	(5,277)	0
Net cash provided by (used in) financing activities	8,654	(11,863)
Effect of exchange rate changes on cash	(20,949)	650
Increase in cash and cash equivalents	10,566	29,986
Cash and cash equivalents, beginning of period	590,179	409,437
Cash and cash equivalents, end of period	$ 600,745	$ 439,423

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Recent Accounting Pronouncements

9 Months Ended

Nov. 03, 2013

Accounting Policies [Abstract]

Recent Accounting Pronouncements

RECENT ACCOUNTING PRONOUNCEMENTS

In January 2013, the FASB amended ASC Topic 210 Balance Sheet (“ASC 210”) to clarify the scope of the required enhanced disclosures that will enable financial statement users to evaluate the effect or potential effect of netting arrangements on a company’s financial position, including the effect or potential effect of rights of setoff associated within scope assets and liabilities. The amendment requires enhanced disclosures by requiring improved information about financial instruments and derivative instruments that are either (i) offset in accordance with ASC 210-20-45 or ASC 815-10-45 or (ii) subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in accordance with ASC 210-20-45 or ASC 815-10-45. This guidance is effective for annual periods beginning on or after January 1, 2013. The Company adopted the amendment in the first quarter of fiscal 2013 with no material impact on the Company’s consolidated financial statements.

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Inventories

9 Months Ended

Nov. 03, 2013

Inventory Disclosure [Abstract]

Inventories

INVENTORIES

	November 3, 2013			February 3, 2013
Finished goods	$	232,270		$	163,008
Raw materials	568			583
Provision to reduce inventory to market value	(26,684		)	(8,369		)
	$	206,154		$	155,222

The Company’s calculation of provision to reduce inventory to market value includes a $17,469 charge to cost of sales in the thirty-nine weeks ended November 3, 2013, related to the pull-back of black luon pants in corporate-owned stores, direct to consumer and other sales channels, as well as inventory held in its warehouse facilities.

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Stock-Based Compensation

9 Months Ended

Nov. 03, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

STOCK-BASED COMPENSATION

Share option plans

The Company’s employees participate in various stock-based compensation plans, which are provided by the Company directly.

Stock-based compensation expense charged to income for the plans was $12,453 and $11,828 for the thirty-nine weeks ended November 3, 2013 and October 28, 2012, respectively. Total unrecognized compensation cost for all stock-based compensation plans was $23,886 at November 3, 2013, which is expected to be recognized over a weighted-average period of 2.1 years.

Company stock options, performance-based restricted stock units and restricted shares

A summary of the Company’s stock option, performance-based restricted stock unit and restricted share activity as of November 3, 2013 and changes during the thirty-nine week period then ended is presented below:

	Number of Stock Options	Weighted- Average Exercise Price		Number of Performance-Based Restricted Stock Units	Weighted- Average Grant Fair Value		Number of Restricted Shares	Weighted- Average Grant Fair Value
Balance at February 3, 2013	1,377	$	19.51	491	$	45.47	16	$	63.97
Granted	97	66.34		267	52.61		17	64.30
Exercised	647	11.56		191	20.74		16	63.97
Forfeited	52	24.83		24	60.98		2	64.30
Balance at November 3, 2013	775	$	31.67	543	$	57.01	15	$	64.30
Exercisable at November 3, 2013	364	$	16.51	—	$	—	—	$	—

The Company’s performance-based restricted stock units are awarded to eligible employees and entitle the grantee to receive a maximum of 1.5 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 award date. Expense for performance share units is recognized when it is probable that the performance goal will be achieved.

Employee stock purchase plan

The Company’s Board of Directors and stockholders approved the Company’s Employee Share Purchase Plan (“ESPP”) in September 2007. The ESPP allows for the purchase of common stock of the Company by all eligible employees at a 25% discount from fair market value subject to certain limits as defined in the ESPP. The maximum number of shares available under the ESPP is 6,000 shares. During the thirteen weeks ended November 3, 2013, there were 23 shares purchased under the ESPP, which were funded by the Company through open market purchases.

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Supplementary Financial Information - Summary of Certain Balance Sheet Accounts (Detail) (USD $) In Thousands, unless otherwise specified	Nov. 03, 2013	Feb. 03, 2013
Prepaid expenses and other current assets:
Prepaid tax installments	$ 40,398	$ 21,821
Prepaid expenses	21,189	13,480
Prepaid expense and other current assets total	61,587	35,301
Property and equipment:
Land	69,773	72,679
Buildings	10,554	10,969
Leasehold improvements	140,927	109,233
Furniture and fixtures	38,872	30,907
Computer hardware and software	96,687	81,099
Equipment and vehicles	1,487	1,486
Accumulated amortization and depreciation	(114,674)	(91,734)
Total property and equipment	243,626	214,639
Goodwill and intangible assets:
Goodwill	23,609	23,609
Changes in foreign currency exchange rates	879	2,451
Goodwill, net	24,488	26,060
Reacquired franchise rights	10,630	10,630
Accumulated amortization	(8,490)	(8,076)
Changes in foreign currency exchange rates	2,363	1,587
Total intangible assets	4,503	4,141
Goodwill and intangible assets, net	28,991	30,201
Accrued liabilities:
Inventory purchases	12,837	7,633
Sales tax collected	8,909	8,501
Accrued rent	5,093	5,688
Other	11,382	8,210
Accrued liabilities, Total	38,221	30,032
Non-current liabilities:
Deferred lease liability	17,921	16,785
Tenant inducements	19,259	13,637
Non-current liabilities, Total	$ 37,180	$ 30,422

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Nov. 03, 2013	Feb. 03, 2013
Statement of Financial Position [Abstract]
Undesignated preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Undesignated preferred stock, shares authorized	5,000,000	5,000,000
Undesignated preferred stock, shares issued	0	0
Undesignated preferred stock, shares outstanding	0	0
Exchangeable stock, par value (in dollars per share)	$ 0	$ 0
Exchangeable stock, shares authorized	60,000,000	60,000,000
Exchangeable stock, shares issued	29,983,000	32,065,000
Exchangeable stock, shares outstanding	29,983,000	32,065,000
Special voting stock, par value (in dollars per share)	$ 0.000005	$ 0.000005
Special voting stock, shares authorized	60,000,000	60,000,000
Special voting stock, shares issued	29,983,000	32,065,000
Special voting stock, shares outstanding	29,983,000	32,065,000
Common stock, par value (in dollars per share)	$ 0.005	$ 0.005
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares issued	115,223,000	112,371,000
Common stock, shares outstanding	115,223,000	112,371,000

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Segment Reporting

9 Months Ended

Nov. 03, 2013

Segment Reporting [Abstract]

Segment Reporting

SEGMENT REPORTING

The Company applies ASC Topic 280, Segment Reporting (“ASC 280”), in determining reportable segments for its financial statement disclosure. The Company reports segments based on the financial information it uses in managing its business. The Company’s reportable segments are comprised of corporate-owned stores, direct to consumer and other. Direct to consumer includes sales from the Company’s e-commerce websites. Sales to wholesale accounts, showrooms sales and outlet sales have been combined into other. The Company has reviewed the classification of its expenses amongst its reportable segments and has updated the classification of some of these expenses. Accordingly, all prior year comparable information has been reclassified to conform to the current year classification. Information for these segments is detailed in the table below:

	Thirteen Weeks Ended   November 3, 2013		Thirteen Weeks Ended   October 28, 2012		Thirty-Nine Weeks Ended   November 3, 2013		Thirty-Nine Weeks Ended   October 28, 2012
Net revenue:
Corporate-owned stores	$	290,666	$	252,046	$	833,792	$	712,149
Direct to consumer	61,954		45,122		165,304		118,991
Other	27,280		19,369		71,099		53,729
	$	379,900	$	316,537	$	1,070,195	$	884,869
Income from operations before general corporate expense:
Corporate-owned stores	$	89,676	$	84,438	$	244,915	$	242,045
Direct to consumer	27,980		19,167		68,999		51,644
Other	4,597		4,278		12,755		11,597
	122,253		107,883		326,669		305,286
General corporate expense	29,917		27,272		89,458		81,422
Income from operations	92,336		80,611		237,211		223,864
Other income (expense), net	1,453		1,424		4,249		3,500
Income before provision for income taxes	$	93,789	$	82,035	$	241,460	$	227,364
Capital expenditures:
Corporate-owned stores	$	17,576	$	23,103	$	44,016	$	52,573
Direct to consumer	1,051		1,733		3,814		2,564
Corporate	9,305		8,159		24,115		16,904
	$	27,932	$	32,995	$	71,945	$	72,041
Depreciation:
Corporate-owned stores	$	7,847	$	7,826	$	22,850	$	20,957
Direct to consumer	1,190		639		3,303		2,296
Corporate	3,879		3,036		10,570		7,709
	$	12,916	$	11,501	$	36,723	$	30,962

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) In Thousands	Total	Exchangeable Stock [Member]	Special Voting Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Beginning balance at Feb. 03, 2013	$ 887,299	$ 0	$ 0	$ 562	$ 221,372	$ 644,275	$ 21,090
Beginning balance, shares at Feb. 03, 2013		32,065	32,065	112,371
Net income attributable to lululemon athletica inc.	169,855					169,855
Foreign currency translation adjustment	(35,501)						(35,501)
Stock-based compensation	12,453				12,453
Excess tax benefit from stock-based compensation	6,453				6,453
Common stock issued upon exchange of exchangeable shares	0	0	0	10	(10)
Common stock issued upon exchange of exchangeable shares, shares		(2,082)	(2,082)	(2,082)
Restricted share issuance	0			0	0
Restricted stock issuance, shares				15
Stock options exercised	7,478			3	7,475
Stock options exercised, shares				647
Common stock issued upon settlement of performance-based restricted stock units	0			1	(1)
Common stock issued upon settlement of performance-based restricted stock units, shares				191
Shares withheld related to net share settlement of performance-based restricted stock units	(5,277)			0	(5,277)
Shares withheld related to net share settlement of performance-based restricted stock units, shares				(83)
Ending balance at Nov. 03, 2013	$ 1,042,760	$ 0	$ 0	$ 576	$ 242,465	$ 814,130	$ (14,411)
Ending balance, shares at Nov. 03, 2013		29,983	29,983	115,223

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Nov. 03, 2013	Feb. 03, 2013
Current assets
Cash and cash equivalents	$ 600,745	$ 590,179
Accounts receivable	12,105	6,351
Inventories	206,154	155,222
Prepaid expenses and other current assets	61,587	35,301
Total current assets	880,591	787,053
Property and equipment, net	243,626	214,639
Goodwill and intangible assets, net	28,991	30,201
Deferred income taxes	16,103	15,033
Other non-current assets	5,243	4,152
Total assets	1,174,554	1,051,078
Current liabilities
Accounts payable	4,783	1,045
Accrued liabilities	38,221	30,032
Accrued compensation and related expenses	26,829	27,530
Income taxes payable	991	39,637
Unredeemed gift card liability	23,790	35,113
Total current liabilities	94,614	133,357
Non-current liabilities	37,180	30,422
Total liabilities	131,794	163,779
Stockholders’ equity
Undesignated preferred stock, $0.01 par value, 5,000 shares authorized, none issued and outstanding	0	0
Exchangeable stock, no par value, 60,000 shares authorized, issued and outstanding 29,983 and 32,065	0	0
Special voting stock, $0.000005 par value, 60,000 shares authorized, issued and outstanding 29,983 and 32,065	0	0
Common stock, $0.005 par value, 400,000 shares authorized, issued and outstanding 115,223 and 112,371	576	562
Additional paid-in capital	242,465	221,372
Retained earnings	814,130	644,275
Accumulated other comprehensive (loss) income	(14,411)	21,090
Total stockholders' equity	1,042,760	887,299
Total liabilities and stockholders' equity	$ 1,174,554	$ 1,051,078

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Segment Reporting - Detailed Segments Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Nov. 03, 2013	Oct. 28, 2012	Nov. 03, 2013	Oct. 28, 2012
Net revenue:
Net revenue	$ 379,900	$ 316,537	$ 1,070,195	$ 884,869
Income from operations before general corporate expense:
Income from operations before general corporate expense	122,253	107,883	326,669	305,286
General corporate expense	29,917	27,272	89,458	81,422
Income from operations	92,336	80,611	237,211	223,864
Other income (expense), net	1,453	1,424	4,249	3,500
Income before provision for income taxes	93,789	82,035	241,460	227,364
Capital expenditures:
Capital expenditures	27,932	32,995	71,945	72,041
Depreciation:
Depreciation	12,916	11,501	36,723	30,962
Operating Segments [Member] | Corporate-Owned Stores [Member]
Net revenue:
Net revenue	290,666	252,046	833,792	712,149
Income from operations before general corporate expense:
Income from operations before general corporate expense	89,676	84,438	244,915	242,045
Capital expenditures:
Capital expenditures	17,576	23,103	44,016	52,573
Depreciation:
Depreciation	7,847	7,826	22,850	20,957
Operating Segments [Member] | Direct To Consumer [Member]
Net revenue:
Net revenue	61,954	45,122	165,304	118,991
Income from operations before general corporate expense:
Income from operations before general corporate expense	27,980	19,167	68,999	51,644
Capital expenditures:
Capital expenditures	1,051	1,733	3,814	2,564
Depreciation:
Depreciation	1,190	639	3,303	2,296
Operating Segments [Member] | Other [Member]
Net revenue:
Net revenue	27,280	19,369	71,099	53,729
Income from operations before general corporate expense:
Income from operations before general corporate expense	4,597	4,278	12,755	11,597
Corporate, Non-Segment [Member] | Corporate [Member]
Capital expenditures:
Capital expenditures	9,305	8,159	24,115	16,904
Depreciation:
Depreciation	$ 3,879	$ 3,036	$ 10,570	$ 7,709

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Stock-Based Compensation - Summary of Company's Stock Option, Performance Share Unit and Restricted Share Activity (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	9 Months Ended
	Nov. 03, 2013
Stock Options [Member]
Number of Stock Options
Number of Stock Options, Beginning Balance	1,377
Number of Stock Options, Granted	97
Number of Stock Options, Exercised	647
Number of Stock Options, Forfeited	52
Number of Stock Options, Ending Balance	775
Exercisable	364
Weighted- Average Exercise Price
Weighted-Average Exercise Price, Options, Beginning Balance (in dollars per share)	$ 19.51
Weighted-Average Exercise Price, Options, Granted (in dollars per share)	$ 66.34
Weighted-Average Exercise Price, Options, Exercised (in dollars per share)	$ 11.56
Weighted-Average Exercise Price, Options, Forfeited (in dollars per share)	$ 24.83
Weighted-Average Exercise Price, Options, Ending Balance (in dollars per share)	$ 31.67
Number of Performance-Based Restricted Stock Units and Restricted Shares
Exercisable	$ 16.51
Performance-Based Restricted Stock Units [Member]
Number of Stock Options
Exercisable	0
Number of Performance-Based Restricted Stock Units and Restricted Shares
Number of Stock, Beginning Balance	491
Number of Stock, Granted	267
Number of Stock, Exercised	191
Number of Stock, Forfeited	24
Number of Stock, Ending Balance	543
Exercisable	$ 0.00
Weighted- Average Grant Fair Value
Weighted-Average Grant Fair Value, Beginning Balance (in dollars per share)	$ 45.47
Weighted-Average Grant Fair Value, Granted (in dollars per share)	$ 52.61
Weighted-Average Grant Fair Value, Exercised (in dollars per share)	$ 20.74
Weighted-Average Grant Fair Value, Forfeited (in dollars per share)	$ 60.98
Weighted-Average Grant Fair Value, Ending Balance (in dollars per share)	$ 57.01
Restricted Stock [Member]
Number of Stock Options
Exercisable	0
Number of Performance-Based Restricted Stock Units and Restricted Shares
Number of Stock, Beginning Balance	16
Number of Stock, Granted	17
Number of Stock, Exercised	16
Number of Stock, Forfeited	2
Number of Stock, Ending Balance	15
Exercisable	$ 0.00
Weighted- Average Grant Fair Value
Weighted-Average Grant Fair Value, Beginning Balance (in dollars per share)	$ 63.97
Weighted-Average Grant Fair Value, Granted (in dollars per share)	$ 64.30
Weighted-Average Grant Fair Value, Exercised (in dollars per share)	$ 63.97
Weighted-Average Grant Fair Value, Forfeited (in dollars per share)	$ 64.30
Weighted-Average Grant Fair Value, Ending Balance (in dollars per share)	$ 64.30

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Legal Proceedings

9 Months Ended

Nov. 03, 2013

Commitments and Contingencies Disclosure [Abstract]

Legal Proceedings

LEGAL PROCEEDINGS

On October 25, 2013, plaintiff Laborers’ District Council Industry Pension Fund filed a books-and-records action entitled Laborers’ District Council Construction Industry Pension Fund v. lululemon athletica inc., No. 9039 (Del. Ch.) under 7 Del. C. Sec. 220 based on a demand letter it sent to the Company on or around August 8, 2013 to request certain lululemon records relating to the March 2013 sheer luon issue, the Company's announcement that its CEO intends to resign, and certain stock trades executed by the Chairman of the Company’s board of directors prior to the Company's announcement regarding its CEO. The Company moved to dismiss the complaint on November 11, 2013, and the motion remains pending. The Company believes there is no merit to this action and the Company intends to continue to defend vigorously.

On August 12, 2103 and August 23, 2013, plaintiffs Thomas Canty and Tammy Federman filed shareholder derivative actions entitled Canty v. Day , et al., No. 13-CV-5629 (S.D.N.Y.) and Federman v. Day, et al., No. 13-CV-5977 (S.D.N.Y.). Plaintiffs allege that they are acting on behalf of the Company and name as defendants current and former directors and certain officers of the Company. The complaint challenges certain public disclosures and conduct relating to the March 2013 sheer luon issue, the Company's announcement that its CEO intends to resign, and certain stock trades executed by certain defendants prior to the Company's announcement regarding its CEO. The plaintiffs have designated the Canty complaint as their operative complaint and allege violations of Section 14(a) of the Securities Exchange Act and for breach of fiduciary duty, unjust enrichment, abuse of control, and gross mismanagement. The Defendants believe there is no merit to this suit and the Defendants intend to defend vigorously.

On July 2, 2013, plaintiff Houssam Alkhoury filed a putative shareholder class action entitled Alkhoury v. lululemon athletica inc., et al., No. 13-CV-4596 (S.D.N.Y.) against lululemon, a certain director and a certain officer of the Company (collectively, “Defendants”). On September 3, 2013, plaintiff Houssam Alkhoury and putative plaintiff Louisiana Sheriffs' Pension & Relief Fund moved to be appointed as lead plaintiff in the lawsuit. On October 1, 2013, the Court appointed Louisiana Sheriffs' Pension & Relief Fund as Lead Plaintiff and on November 1, Lead Plaintiff filed a consolidated class action complaint on behalf of a proposed class of purchasers of lululemon stock between September 7, 2012 through June 11, 2013 (the “Complaint”). In its Complaint, Lead Plaintiff asserts causes of action under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 against Defendants based on certain public disclosures made by the Company relating to its product quality and the March 2013 sheer luon issue. The Company believes there is no merit to this suit and the Company intends to defend vigorously.

On May 3, 2013, plaintiff Hallandale Beach Police Officers and Firefighters Personnel Retirement Fund filed a books-and-records action entitled Hallandale Beach Police Officers and Firefighters' Personnel Retirement Fund v. lululemon athletica inc., No. 8522 (Del. Ch.). under 7 Del. C. Sec. 220 based on a demand letter it sent to the Company on April 17, 2013 to request certain lululemon records relating to the March 2013 sheer luon issue and recent revisions to the Company's executive bonus plan. The Company moved to dismiss the complaint on May 28, 2013. On June 14, 2013, plaintiff sent a supplemental demand letter that requested additional records from the Company relating to the Company's announcement that its CEO intends to resign, and certain stock trades executed by the Company's Chairman prior to the Company's announcement regarding its CEO. On July 1, 2013, plaintiff filed an amended complaint to incorporate allegations relating to the June 14, 2013 supplemental demand letter. The Company moved to dismiss the amended complaint on August 15, 2013, and in response to this filing, plaintiffs served the Company with a new demand letter and then filed a second amended complaint on November 4, 2013. The Company believes there is no merit to this action and the Company intends to continue to defend vigorously.

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Stock-Based Compensation (Tables)

9 Months Ended

Nov. 03, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of Company's Stock Option, Performance Share Unit and Restricted Share Activity

A summary of the Company’s stock option, performance-based restricted stock unit and restricted share activity as of November 3, 2013 and changes during the thirty-nine week period then ended is presented below:

	Number of Stock Options	Weighted- Average Exercise Price		Number of Performance-Based Restricted Stock Units	Weighted- Average Grant Fair Value		Number of Restricted Shares	Weighted- Average Grant Fair Value
Balance at February 3, 2013	1,377	$	19.51	491	$	45.47	16	$	63.97
Granted	97	66.34		267	52.61		17	64.30
Exercised	647	11.56		191	20.74		16	63.97
Forfeited	52	24.83		24	60.98		2	64.30
Balance at November 3, 2013	775	$	31.67	543	$	57.01	15	$	64.30
Exercisable at November 3, 2013	364	$	16.51	—	$	—	—	$	—

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Supplementary Financial Information

9 Months Ended

Nov. 03, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Supplementary Financial Information

SUPPLEMENTARY FINANCIAL INFORMATION

A summary of certain balance sheet accounts is as follows:

	November 3, 2013			February 3, 2013
Prepaid expenses and other current assets:
Prepaid tax installments	$	40,398		$	21,821
Prepaid expenses	21,189			13,480
	$	61,587		$	35,301
Property and equipment:
Land	$	69,773		$	72,679
Buildings	10,554			10,969
Leasehold improvements	140,927			109,233
Furniture and fixtures	38,872			30,907
Computer hardware and software	96,687			81,099
Equipment and vehicles	1,487			1,486
Accumulated amortization and depreciation	(114,674		)	(91,734		)
	$	243,626		$	214,639
Goodwill and intangible assets:
Goodwill	$	23,609		$	23,609
Changes in foreign currency exchange rates	879			2,451
	24,488			26,060
Reacquired franchise rights	10,630			10,630
Accumulated amortization	(8,490		)	(8,076		)
Changes in foreign currency exchange rates	2,363			1,587
	4,503			4,141
	$	28,991		$	30,201
Accrued liabilities:
Inventory purchases	$	12,837		$	7,633
Sales tax collected	8,909			8,501
Accrued rent	5,093			5,688
Other	11,382			8,210
	$	38,221		$	30,032
Non-current liabilities:
Deferred lease liability	$	17,921		$	16,785
Tenant inducements	19,259			13,637
	$	37,180		$	30,422

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Nature of Operations and Basis of Presentation

9 Months Ended

Nov. 03, 2013

Accounting Policies [Abstract]

Nature of Operations and Basis of Presentation

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, manufacture and distribution of healthy lifestyle inspired athletic apparel, which is sold through a chain of corporate-owned and operated retail stores, direct to consumer through e-commerce and through a network of wholesale accounts. The Company’s primary markets are the United States, Canada, Australia, and New Zealand, where 166, 53, 25 and three corporate-owned stores were in operation as of November 3, 2013, respectively. There were a total of 247 and 211 corporate-owned stores in operation as of November 3, 2013 and February 3, 2013, respectively.

Basis of presentation

The unaudited interim consolidated financial statements as of November 3, 2013 and for the thirty-nine weeks ended November 3, 2013 and October 28, 2012 are presented using the United States dollar and have been prepared by the Company under the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the financial information is presented in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and, accordingly, do not include all of the information and footnotes required by GAAP for complete financial statements. The financial information as of February 3, 2013 is derived from the Company’s audited consolidated financial statements and notes for the fiscal year ended February 3, 2013, included in Item 8 in the fiscal 2012 Annual Report on Form 10-K filed with the SEC on March 21, 2013. These unaudited interim consolidated financial statements reflect all 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 the Company’s 2012 Annual Report on Form 10-K.

The Company’s fiscal year ends on the Sunday closest to January 31 of the following year, typically resulting in a 52 week year, but occasionally giving rise to an additional week, resulting in a 53 week year. Fiscal 2013 is a 52 week year, and will end on February 2, 2014 while fiscal 2012 was a 53 week year, and ended on February 3, 2013.

The Company’s business is affected by the pattern of seasonality common to most retail apparel businesses. The results for the periods presented are not necessarily indicative of future financial results.

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Supplementary Financial Information (Tables)

9 Months Ended

Nov. 03, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Certain Balance Sheet Accounts

A summary of certain balance sheet accounts is as follows:

	November 3, 2013			February 3, 2013
Prepaid expenses and other current assets:
Prepaid tax installments	$	40,398		$	21,821
Prepaid expenses	21,189			13,480
	$	61,587		$	35,301
Property and equipment:
Land	$	69,773		$	72,679
Buildings	10,554			10,969
Leasehold improvements	140,927			109,233
Furniture and fixtures	38,872			30,907
Computer hardware and software	96,687			81,099
Equipment and vehicles	1,487			1,486
Accumulated amortization and depreciation	(114,674		)	(91,734		)
	$	243,626		$	214,639
Goodwill and intangible assets:
Goodwill	$	23,609		$	23,609
Changes in foreign currency exchange rates	879			2,451
	24,488			26,060
Reacquired franchise rights	10,630			10,630
Accumulated amortization	(8,490		)	(8,076		)
Changes in foreign currency exchange rates	2,363			1,587
	4,503			4,141
	$	28,991		$	30,201
Accrued liabilities:
Inventory purchases	$	12,837		$	7,633
Sales tax collected	8,909			8,501
Accrued rent	5,093			5,688
Other	11,382			8,210
	$	38,221		$	30,032
Non-current liabilities:
Deferred lease liability	$	17,921		$	16,785
Tenant inducements	19,259			13,637
	$	37,180		$	30,422

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Nature of Operations and Basis of Presentation (Policies)

9 Months Ended

Nov. 03, 2013

Accounting Policies [Abstract]

Basis of presentation

Basis of presentation

The unaudited interim consolidated financial statements as of November 3, 2013 and for the thirty-nine weeks ended November 3, 2013 and October 28, 2012 are presented using the United States dollar and have been prepared by the Company under the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the financial information is presented in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and, accordingly, do not include all of the information and footnotes required by GAAP for complete financial statements. The financial information as of February 3, 2013 is derived from the Company’s audited consolidated financial statements and notes for the fiscal year ended February 3, 2013, included in Item 8 in the fiscal 2012 Annual Report on Form 10-K filed with the SEC on March 21, 2013. These unaudited interim consolidated financial statements reflect all 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 the Company’s 2012 Annual Report on Form 10-K.

Fiscal period

The Company’s fiscal year ends on the Sunday closest to January 31 of the following year, typically resulting in a 52 week year, but occasionally giving rise to an additional week, resulting in a 53 week year. Fiscal 2013 is a 52 week year, and will end on February 2, 2014 while fiscal 2012 was a 53 week year, and ended on February 3, 2013.

New accounting pronouncements

In January 2013, the FASB amended ASC Topic 210 Balance Sheet (“ASC 210”) to clarify the scope of the required enhanced disclosures that will enable financial statement users to evaluate the effect or potential effect of netting arrangements on a company’s financial position, including the effect or potential effect of rights of setoff associated within scope assets and liabilities. The amendment requires enhanced disclosures by requiring improved information about financial instruments and derivative instruments that are either (i) offset in accordance with ASC 210-20-45 or ASC 815-10-45 or (ii) subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in accordance with ASC 210-20-45 or ASC 815-10-45. This guidance is effective for annual periods beginning on or after January 1, 2013. The Company adopted the amendment in the first quarter of fiscal 2013 with no material impact on the Company’s consolidated financial statements.

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Stock-Based Compensation - Additional Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended		3 Months Ended
	Nov. 03, 2013	Oct. 28, 2012	Nov. 03, 2013 ESPP [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 12,453	$ 11,828
Total unrecognized compensation cost	$ 23,886
Expected weighted-average period of compensation cost	2 years 1 month 6 days
Common stock per performance share unit	1.5
Discounted purchase rate of common stock under ESPP			25.00%
Maximum shares available under ESPP			6,000,000
Shares purchased under ESPP			23,000

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Segment Reporting (Tables)

9 Months Ended

Nov. 03, 2013

Segment Reporting [Abstract]

Detailed Segments Information

Information for these segments is detailed in the table below:

	Thirteen Weeks Ended   November 3, 2013		Thirteen Weeks Ended   October 28, 2012		Thirty-Nine Weeks Ended   November 3, 2013		Thirty-Nine Weeks Ended   October 28, 2012
Net revenue:
Corporate-owned stores	$	290,666	$	252,046	$	833,792	$	712,149
Direct to consumer	61,954		45,122		165,304		118,991
Other	27,280		19,369		71,099		53,729
	$	379,900	$	316,537	$	1,070,195	$	884,869
Income from operations before general corporate expense:
Corporate-owned stores	$	89,676	$	84,438	$	244,915	$	242,045
Direct to consumer	27,980		19,167		68,999		51,644
Other	4,597		4,278		12,755		11,597
	122,253		107,883		326,669		305,286
General corporate expense	29,917		27,272		89,458		81,422
Income from operations	92,336		80,611		237,211		223,864
Other income (expense), net	1,453		1,424		4,249		3,500
Income before provision for income taxes	$	93,789	$	82,035	$	241,460	$	227,364
Capital expenditures:
Corporate-owned stores	$	17,576	$	23,103	$	44,016	$	52,573
Direct to consumer	1,051		1,733		3,814		2,564
Corporate	9,305		8,159		24,115		16,904
	$	27,932	$	32,995	$	71,945	$	72,041
Depreciation:
Corporate-owned stores	$	7,847	$	7,826	$	22,850	$	20,957
Direct to consumer	1,190		639		3,303		2,296
Corporate	3,879		3,036		10,570		7,709
	$	12,916	$	11,501	$	36,723	$	30,962

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Document and Entity Information	9 Months Ended
	Nov. 03, 2013	Dec. 09, 2013
Document Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Nov. 03, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Trading Symbol	LULU
Entity Registrant Name	lululemon athletica inc.
Entity Central Index Key	0001397187
Current Fiscal Year End Date	--02-02
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		115,223,687

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Nature of Operations and Basis of Presentation - Additional Information (Detail)	12 Months Ended						12 Months Ended
	Feb. 03, 2013 Store	Nov. 03, 2013 Store	Nov. 03, 2013 United States [Member] Store	Nov. 03, 2013 Canada [Member] Store	Nov. 03, 2013 Australia [Member] Store	Nov. 03, 2013 New Zealand [Member] Store	Feb. 02, 2014 Scenario, Forecast [Member]
Nature of Operations and Basis of Presentation
Number of stores	211	247	166	53	25	3
Fiscal period duration	371 days						364 days