Lululemon 2013 Annual Report Download - page 5

Table of Contents
PART I
Special Note Regarding Forward-Looking Statements
This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,
as amended and Section 21E of the Securities Exchange Act of 1934, as amended. We use words such as "anticipates," "believes," "estimates,"
"may," "intends," "expects" and similar expressions to identify forward-looking statements. Discussions containing forward-looking statements
may be found in the material set forth under "Business," "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and in other sections of the report. All forward-
looking statements are inherently uncertain as they are based on our expectations and
assumptions concerning future events. Any or all of our forward-looking statements in this report may turn out to be inaccurate. We have based
these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe
may affect our financial condition, results of operations, business strategy and financial needs. They may be affected by inaccurate assumptions
we might make or by known or unknown risks and uncertainties, including the risks, uncertainties and assumptions described in the section
entitled Item 1A and elsewhere in this report. In light of these risks, uncertainties and assumptions, the forward-looking events and
circumstances discussed in this report may not occur as contemplated, and our actual results could differ materially from those anticipated or
implied by the forward-looking statements. All forward-looking statements in this report are made as of the date hereof, based on information
available to us as of the date hereof, and we assume no obligation to update any forward-looking statement.
ITEM 1. BUSINESS
Overview
lululemon athletica inc. 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 believe consumers associate our brand
with innovative, technical apparel products. Our products are designed to offer performance, fit and comfort while incorporating both function
and style. Our heritage of combining performance and style distinctly positions us to address the needs of female athletes as well as a growing
core of consumers who desire everyday casual wear that is consistent with their active lifestyles. We also continue to broaden our product range
to increasingly appeal to male athletes and athletic female youth. We offer a comprehensive line of apparel and accessories including fitness
pants, shorts, tops and jackets designed for athletic pursuits such as yoga, running, general fitness and dance-inspired apparel for female youth.
As of February 2, 2014 , our branded apparel was principally sold through 254 stores that are located in Canada, the United States, Australia and
New Zealand. We believe our vertical retail strategy allows us to interact more directly with, and gain feedback from, our customers, whom we
call guests, while providing us with greater control of our brand.
We have developed a distinctive community-based strategy that we believe enhances our brand and reinforces our guest loyalty. The key
elements of our strategy are to:
We were founded in 1998 by Dennis "Chip" Wilson in Vancouver, British Columbia. Noting the increasing number of women
participating in sports, and specifically yoga, Mr. Wilson developed lululemon athletica to address a void in the women's athletic apparel market.
The founding principles established by Mr. Wilson drive our distinctive corporate culture with a mission of creating components for people to
live long, healthy and fun lives.
Consistent with this mission, we promote a set of core values in our business, which include developing the highest quality products,
operating with integrity, leading a healthy balanced life, and training our employees in self responsibility and goal setting. These core values
attract passionate and motivated employees who are driven to succeed and share our vision of "elevating the world from mediocrity to
greatness." We believe the energy and passion of our employees allow us to successfully execute on our business strategy, enhance brand loyalty
and create a distinctive connection with our guests.
We believe our culture and community-based business approach provides us with competitive advantages that are responsible for our
strong financial performance. Our net revenue has increased from $40.7 million in fiscal 2004 to $1.6 billion in fiscal 2013 , representing a 50%
compound annual growth rate. Our net revenue increased from $1.4 billion in fiscal
1
• design and develop innovative athletic apparel that combines performance with style and incorporates real-
time guest feedback;
• locate our stores in street locations, lifestyle centers and malls that position each lululemon athletica store as an integral part of its
community;
•
create an inviting and educational store environment that encourages product trial and repeat visits; and
•
market on a grassroots level in each community, including through social media and influential fitness practitioners who embrace and
create excitement around our brand.