lululemon athletica inc. stock research
FY2023 Q3
lululemon athletica (LULU) Gross Margin — Quarter Ended Oct 29, 2023
Revenue and gross profit were essentially flat compared to the prior quarter, while cost of revenue increased, causing gross margin to decline. Relative to the same quarter last year, revenue, gross profit, and cost of revenue were all higher, and gross margin improved.
Gross margin takeaway
Quarter ended Oct 29, 2023 · FY2023 Q3
Revenue and gross profit were essentially flat compared to the prior quarter, while cost of revenue increased, causing gross margin to decline. Relative to the same quarter last year, revenue, gross profit, and cost of revenue were all higher, and gross margin improved.
- The strongest observable margin driver was the sequential decline in gross margin, as cost of revenue grew while revenue remained stable, outpacing the year-over-year improvement.
- Compared to the prior quarter, gross margin weakened due to a higher cost of revenue relative to revenue. Compared to the same quarter one year earlier, gross margin improved as revenue grew faster than cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
57.0%
Gross profit
$1.3B
Revenue
$2.2B
Cost of revenue
$947.6M
Quarter-over-quarter change
-1.8 pts
Year-over-year change
+1.1 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% |
| Oct 29, 2023 | $2.2B | $1.3B | $947.6M | 57.0% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jul 30, 2023
-1.8 pts
Year-over-year change
Oct 30, 2022
+1.1 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver was the sequential decline in gross margin, as cost of revenue grew while revenue remained stable, outpacing the year-over-year improvement.
Compared to the prior quarter, gross margin weakened due to a higher cost of revenue relative to revenue. Compared to the same quarter one year earlier, gross margin improved as revenue grew faster than cost of revenue.
Monitor inventory levels, which increased from the prior fiscal year-end as shown in the balance sheet.