lululemon athletica (LULU) Gross Margin — Quarter Ended Jul 30, 2023

Revenue and gross profit both increased compared to the prior quarter and the same quarter last year. Gross margin improved sequentially and year-over-year, reflecting a larger proportion of revenue retained after cost of revenue.

Gross margin takeaway

Quarter ended Jul 30, 2023 · FY2023 Q2

Revenue increased more than cost of revenue, which allowed gross profit to expand at a higher rate and drove the gross margin higher.
Compared to the immediately preceding quarter, revenue, gross profit, and gross margin were all higher. Compared to the same quarter one year earlier, all three metrics were also higher.

Gross margin snapshot

The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.

Gross margin

58.8%

Gross profit

$1.3B

Revenue

$2.2B

Cost of revenue

$910.7M

Quarter-over-quarter change

+1.3 pts

Year-over-year change

+2.3 pts

Quarterly gross margin trend

A four-quarter view of the revenue and direct-cost bridge behind gross margin.

Period	Revenue	Gross profit	Cost of revenue	Gross margin
Jan 29, 2023	$2.8B	$1.5B	$1.2B	55.1%
Apr 30, 2023	$2.0B	$1.2B	$850.0M	57.5%
Jul 30, 2023	$2.2B	$1.3B	$910.7M	58.8%

Quarterly comparisons

Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.

Previous-quarter change

Apr 30, 2023

+1.3 pts

Year-over-year change

Jul 31, 2022

+2.3 pts

What the margin says

Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.

Revenue increased more than cost of revenue, which allowed gross profit to expand at a higher rate and drove the gross margin higher.

Compared to the immediately preceding quarter, revenue, gross profit, and gross margin were all higher. Compared to the same quarter one year earlier, all three metrics were also higher.

Monitor the cost of revenue as a proportion of revenue, as changes in this ratio directly affect gross margin.