Forensic Analysis · Durable Goods, Textiles & Apparel · as of Oct 19, 2026
Lululemon Athletica Inc. (LULU)
A forensic read on Lululemon Athletica Inc. built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
C · Mixed — selective
Forensic grade
Safe
Financial health
6.8
Distress distance
Clean
Earnings quality
2
Forensic signals
31.8%
ROE
4.9%
Revenue growth
This free snapshot doesn't read filing or proxy text, so the auditor-quality and governance checks that can lower a grade were not evaluated (red flags, auditor quality, say on pay, board independence, going concern). Those checks only ever lower a grade, so the full analysis can land below the grade above but never above it — treat it as the most favourable reading, not the settled one.
Lululemon Athletica Inc. earns a C (Mixed — selective) forensic quality grade, and its balance-sheet distress test reads 6.8, placing it in the Safe zone. 2 forensic signals were flagged in its latest SEC filings, led by accruals ratio (% of NOA).
What the filings flag
+28.9%
FY2025→FY2026
Accruals ratio (% of NOA).Net operating assets grew +28.9% relative to their own average in FY2026 — scaled by NOA itself, not by total assets, which is what the Forensic Screens card's own accrual row divides by. Accruals are building sharply — a large slice of profit sits in operating assets, not cash. An accrual is a claim that still has to be collected or written down, so the gap resolves in a later period whichever way it goes. Net operating assets also rose $20.0M through acquisitions (increase in goodwill and intangibles); that purchase is investing and is excluded from this ratio. The build is led by receivables up +59% against revenue +5% and inventory up +18% against +12% in cost of sales. A cash-flow measure on the same base disagrees: reported earnings ran in line with operating cash by 1% of net operating assets, against an accruals ratio of 28.9%. The two are computed differently: the accruals ratio is the change in net operating assets over average net operating assets, while the cash-flow figure is net income less operating cash flow over that same average. Read them as two results, not one.
128% of FCF
FY2026
Shareholder returns.Returned $1.2B to shareholders (buybacks + dividends) in FY2026 — 128% of free cash flow, but 74% of operating cash flow. Returns run ahead of free cash flow, with the gap funded by debt or cash reserves rather than the cash the business itself throws off; the payout itself is still covered by operating cash. Counting the $62M of stock-based comp paid out in shares on top of that, the combined claim on free cash flow is 135%.
Key fundamentals
Latest Revenue$11.10B
Revenue Growth YoY+4.9%
Revenue CAGR (2yr)+7.4%
Net Margin14.2%
Free Cash Flow$921.7M
Return on Equity31.8%
Debt / Equity0.00x
The forensic grade and screens above are free — no account needed. Want the AI investment read on top — the 0–100 rating, thesis, bull-vs-bear, red flags and the 12-month scenario, written from Lululemon Athletica Inc.'s actual 10-K/10-Q/8-K filings?