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lululemonathletica inc.
2015StifelConsumerConferenceSeptember17,2015
forwardlookingstatements
Thispresentationcontains"forwardlookingstatements"withinthemeaningofSection 27AoftheSecuritiesActof1933
andSection 21EoftheSecuritiesExchangeActof1934thatinvolverisks,uncertaintiesandassumptions,suchas
statementsregardingourfuturefinancialconditionorresultsofoperations,ourprospectsandstrategiesforfuture
growth,thedevelopmentandintroductionofnewproducts,andtheimplementationofourmarketingandbranding
strategies.Inmanycases,youcanidentifyforwardlookingstatementsbytermssuchas"may,""will,""should,""expects,"
"plans,""anticipates,""outlook,""believes,""intends,""estimates,""predicts,""potential"orthenegativeoftheseterms
orothercomparableterminology.Theseforwardlookingstatementsarebasedonmanagement'scurrentexpectationsbut
theyinvolveanumberofrisksanduncertainties.Actualresultsandthetimingofeventscoulddiffermateriallyfromthose
anticipatedintheforwardlookingstatementsasaresultofrisksanduncertainties,whichinclude,withoutlimitation:an
economicdownturnoreconomicuncertaintyinourkeymarkets;increasingproductcostsanddecreasingsellingprices;
ourinabilitytoanticipateconsumerpreferencesandsuccessfullydevelopandintroducenew,innovativeandupdated
products;ourinabilitytoaccuratelyforecastcustomerdemandforourproducts;ourinabilitytomanageourgrowthand
theincreasedcomplexityofourbusinesseffectively;thefluctuatingcostsofrawmaterials;ourrelianceonandlimited
controloverthirdpartysupplierstoprovidefabricsforandtoproduceourproducts;ourhighlycompetitivemarketand
increasingcompetition;anunforeseendisruptionofourinformationsystems;ourinabilitytodeliverourproductstothe
marketandtomeetcustomerexpectationsduetoproblemswithourdistributionsystem;ourinabilitytocancelstore
leasesifanexistingornewstoreisnotprofitable;increasinglaborcostsandotherfactorsassociatedwiththeproduction
ofourproductsinChinaorothercountries;ourinabilitytosuccessfullyopennewstorelocationsinatimelymanner;our
failuretomaintainthevalueandreputationofourbrand;ourfailuretocomplywithtradeandotherregulations;our
competitorsmanufacturingandsellingproductsbasedonourfabricsandmanufacturingtechnologyatlowerpricesthan
wecan;ourfailuretoprotectourintellectualpropertyrights; andotherrisksanduncertaintiessetoutinfilingsmadefrom
timetotimewiththeUnitedStatesSecuritiesandExchangeCommissionandavailableatwww.sec.gov,including,without
limitation,ourmostrecentreportsonForm10KandForm10Q.Youareurgedtoconsiderthesefactorscarefullyin
evaluatingtheforwardlookingstatementscontainedhereinandarecautionednottoplaceunduerelianceonsuch
forwardlookingstatements,whicharequalifiedintheirentiretybythesecautionarystatements.Theforwardlooking
statementsmadehereinspeakonlyasofthedateofthispresentationandthecompanyundertakesnoobligationto
publiclyupdatesuchforwardlookingstatementstoreflectsubsequenteventsorcircumstances.
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StrategyOverview
Product
Relentlessproductinnovation
$3Bwomensbusiness
$1Bmensbusiness
Guest
Experience
Storeandwebsiteexperience
Webpenetration>25%
DDsquarefootagegrowthCAGR
OmnichannelandCRMexcellence
Brand&
Community
Growourcollective
Invest/evolvecommunitystrategy
Increasebrandawarenessglobally
International
Profitable,overseasexpansion
APAC
EMEA
Operational
Excellence
Supplychainandinfrastructure
investments
Flexible,reliablesupplychain
Unlockproductmarginrecovery:+300bpsgoal
40storesby2017,
rampingfasterbeyond
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1H:15Progress
Product
Womenspantwalllaunch DDcomps
25%menscompyeartodate
Guest
Experience
33%ecommercecompyeartodate
Positivestorecomps Q2allregionspositive
Successfulstoreexpansions
Brand&
Community
GetQuiet,LiveLoud16citytour
SeaWheezehalfmarathon
International
4newstoresopenin3 countries
17showroomsoperatedin9countries
Operational
Excellence
Teamandsystemsinvestments
Criticalseniormanagementadds
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product pantwalllaunch
largestcoordinatedproductlaunch focusedon
extendingdesign,quality,andinnovation
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guestexperience Robsonrelocation
squarefootageincreaseof40%withsalesincrease
trackingto+75%
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brandandcommunity SeaWheeze
morethan10,000participantsfrom17+countries
helpingextendbrandawareness
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internationalgrowth HongKongIFCMall
ontrackforUS$8M annuallyandsalespersquarefoot
of$6,000
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9/17/2015
financialoverview
Q2financialresults
SecondQuarter2015*
Revenue
$453.0million
Combined
Comp
+11%
GrossMargin
46.8%
SG&A
32.1%
DilutedEPS
$0.34
Ecommerce
penetration
18.2%
Storeopenings
Inventory
20
$281 million/+55%
*Q2resultswerereportedonSept.10,2015
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Q2grossmargin whathappened?
Q2
2014GrossMargin
50.5%
ProductMargin
(110)bps
Markdowns
(30)bps
Air Freight
(50)bps
FX
(70)bps
BuyingCosts
Occupancy &Depreciation
2015GrossMargin
(55)bps
Costvariances portdisruptions
(35)bps
Rawmaterialsliabilityactions
(20)bps
Selling mix(31%menscomp)
0
(110)bps
46.8%
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2015grossmarginoutlook
Guidance
2014GrossMargin
Q2
Q3
Q4
50.5%
50.3%
51.5%
delever
start tostabilize
similartoQ2
sequentiallybetter
ProductMargin
(110)bps
Markdowns
(30)bps
Air Freight
(50)bps
BuyingCosts
delever
similartoprior Qs
delever
lever
sequentiallybetter
FX
(70)bps
Occupancy &Depreciation
(110) bps
2015GrossMargin
delever
similartoQ2
46.8%
flat
flat
delever
delever
sequentiallyworse
sequentiallybetter
delever
delever
similartoQ2
sequentiallybetter
~47%
TBD
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9/17/2015
2016grossmarginrecoveryoutlook
ProductMargin
AirFreight (finished&rawmaterials)
ImprovedCosting
+300bpsimprovement(preFX)
vs. 2014
RawMaterialsEfficiencies
Logistics&Distribution
OtherGMComponents
ForeignExchange
deleverage
deleverage
Occupancy& Depreciation
sequentiallybetterthanFY15
BuyingCosts
leverage
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2015inventoryoutlook
Q2
Q3
Q4
InventoryBalance
+55%
stillelevated
betteraligned
Markdowns as%ofSales
30bps
similarto1H:15
similarto1H:15
170K units
online
warehousesale
+
outlets
100Kunits
physical
warehouse sale
+
outlets
130Kunits
physical
warehousesale
+
outlets
ExcessClearance Movement
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quarterlyandfullyearguidance
ThirdQuarter2015
Revenue:$477millionto$482million
CombinedComp:highsingledigits
GrossMargin:approx.47%
EPS:$0.35to$0.37
FiscalYear2015
Revenue:$2.025billionto$2.055billion
CombinedComp:highsingledigits
EPS:$1.87to$1.92
CapEx:$135to$140million
StoreOpenings:60stores
*Annualguidanceassumes141.8Mdilutedweightedaverage
sharesoutstandingand30.2%taxrate.
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thankyou!
formoreinfo:
www.lululemon.com
investors@lululemon.com
9/17/2015
lululemonathletica inc.
2015StifelConsumerConferenceSeptember17,2015