Lululemon Athletica (LULU) 8-K Results of Operations and Financial Condition

Exhibit 99.1

LULULEMON ATHLETICA INC. ANNOUNCES FOURTH QUARTER AND FULL YEAR
FISCAL 2009 RESULTS
Fourth Quarter Net Revenue Increases 55% to $160.6 million
Fourth Quarter Diluted EPS of $0.40
Full Year Diluted EPS increases 49% to $0.82

Vancouver, Canada — March 25, 2010— lululemon athletica inc. [NASDAQ: LULU; TSX: LLL] today announced financial results for the fourth quarter and fiscal year ended January 31, 2010.

For the fourth quarter ended January 31, 2010:

• Net revenue for the quarter increased 54.5% to $160.6 million from $103.9 million in the fourth quarter of fiscal 2008. Net revenue from corporate-owned stores was $137.4 million for the quarter, an increase of 52.2% from $90.3 million in the fourth quarter of fiscal 2008, and comparable-store sales increased by 29% on a constant-dollar basis.

• Gross profit for the quarter increased by 67.6% to $86.6 million, and as a percentage of net revenue gross profit increased to 53.9% for the quarter from 49.7% in the fourth quarter of fiscal 2008.

• Income from operations for the quarter increased by 158.3% to $41.4 million, and as a percentage of net revenue was 25.8% compared to 15.4% of net revenue in the fourth quarter of fiscal 2008, which included a $4.4 million ($0.04 per share) asset impairment charge related to store assets and lease exit costs.

• Diluted earnings per share for the quarter was $0.40 on net income of $28.5 million, compared to diluted earnings per share of $0.16 on net income of $10.9 million in the fourth quarter of fiscal 2008. The tax rate for the quarter was 31.4% versus 32.7% a year ago.

For the fiscal year ended January 31, 2010:

• Net revenue for the fiscal year increased 28.1% to $452.9 million from $353.5 million in fiscal 2008. Net revenue from corporate-owned stores was $393.5 million, an increase of 24.7% from $315.5 million in fiscal 2008, and comparable-store sales increased by 9% on a constant-dollar basis.

• Gross profit for the fiscal year as a percentage of net revenue decreased to 49.3% from 50.7% of net revenue in fiscal 2008.

• Income from operations for the fiscal year increased by 53.0% to $86.5 million, and as a percentage of net revenue was 19.1% compared to 16.0% of net revenue in the fourth quarter of fiscal 2008, which included a $4.4 million asset impairment charge related to store assets and lease exit costs.

• Diluted earnings per share for the fiscal year was $0.82 on net income of $58.3 million, compared to diluted earnings per share of $0.55 on net income of $39.4 million in fiscal 2008.

The Company ended fiscal 2009 with $159.6 million in cash and cash equivalents compared to $56.8 million at the end of fiscal 2008. Inventory at the end of fiscal 2009 totaled $44.1 million compared to $52.1 million at the end of fiscal 2008.

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Christine Day, lululemon’s CEO stated: “We are very pleased with the growing sales momentum in our business which has accelerated as the economy has improved and with some of our key initiatives which have taken hold, such as expanding our running line, elevated product to give more value to our customers, and our e-commerce launch. Our 29% comparable-store sales increase reflects the strength of the lululemon brand driven by our quality, design, product innovation and unique positioning.”

Updated Outlook

For the first quarter of fiscal 2010, we expect net revenue to be in the range of $125 million to $130 million based on a comparable-store sales increase in the upper 20% range on a constant-dollar basis. Diluted earnings per share are expected to be in the range of $0.18 to $0.20 for the quarter. This assumes a tax rate of 35% and 71.7 million diluted weighted-average shares outstanding.

For fiscal 2010, we expect net revenue to be in the range of $540 million to $585 million and diluted earnings per share are expected to be in the range of $1.00 to $1.05 for the full year. This assumes a tax rate of 35% and 72.5 million diluted weighted-average shares outstanding.

Conference Call Information

A conference call to discuss fourth quarter results is scheduled for today, March 25, 2010, at 9:00 AM Eastern Time. Those interested in participating in the call are invited to dial (877) 312-8622 approximately ten minutes prior to the start of the call. The conference call will also be webcast live atwww.lululemon.com. The webcast will be accessible on our website for approximately 30 days after the call.

About lululemon athletica inc.

lululemon athletica (NASDAQ:LULU; TSX:LLL) is a yoga-inspired athletic apparel company that creates components for people to live longer, healthier and more fun lives. By producing products that help keep people active and stress free, lululemon believes that the world will be a better place. Setting the bar in technical fabrics and functional designs, lululemon works with yogis and athletes in local communities for continuous research and product feedback. For more information, visitwww.lululemon.com.

Non-GAAP Financial Measure

Constant-dollar net revenue changes, which exclude the impact of changes in foreign exchange rates, is not a United States Generally Accepted Accounting Principle (“GAAP”) performance measure. We provide constant-dollar net revenue changes because we use the measure to understand the underlying growth rate of revenue excluding the impact on a quarter-by-quarter basis of changes in foreign exchange rates, which are not under management’s direct control. We believe that disclosing net revenue changes on a constant-dollar basis is useful to investors because it enables them to better understand the level of growth of our business.

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Forward-Looking Statements:

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risks, uncertainties and assumptions, such as statements regarding our future financial condition or results of operations, our prospects and strategies for future growth, the development and introduction of new products, and the implementation of our marketing and branding strategies. In many cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “outlook,” “believes,” “intends,” “estimates,” “predicts,” “potential” or the negative of these terms or other comparable terminology. These forward-looking statements are based on management’s current expectations but they involve a number of risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of risks and uncertainties, which include, without limitation: the possibility that we may not be able to manage operations at our current size or manage growth effectively; risks that consumer spending may continue to decline and that U.S. and global macroeconomic conditions may worsen; the possibility that levels of comparable-store sales or average sales per square foot will decline; the possibility that we may not be able to successfully expand in the United States and other new markets; increased competition causing us to reduce the prices of our products or to increase significantly our marketing efforts in order to avoid losing market share; the possibility that we may not be able to continually innovate and provide our consumers with improved products; the possibility that our suppliers or manufacturers may not produce or deliver our products in a timely or cost-effective manner; and other risk factors detailed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2010 filed with the Securities and Exchange Commission and available atwww.sec.gov. You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements. The forward-looking statements made herein speak only as of the date of this press release and the company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

Contacts:

Investor Contact:
Joseph Teklits/Jean Fontana
ICR, Inc
203-682-8200

Media Contact:
Evan Goetz/Diane Zappas
FD
212-850-5600

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lululemon athletica inc.
Condensed Consolidated Statements of Operations
Expressed in thousands, except per share amounts

	Thirteen			Thirteen			Fifty-Two			Fifty-Two
	Weeks Ended			Weeks Ended			Weeks Ended			Weeks Ended
	January 31,			February 1,			January 31,			February 1,
	2010			2009			2010			2009
	(unaudited)			(unaudited)
Net revenue	$	160,606		$	103,921		$	452,898		$	353,488
Costs of goods sold		74,046			52,261			229,812			174,421
Gross profit		86,560			51,660			223,086			179,067
As a percent of net revenue		53.9	%		49.7	%		49.3	%		50.7	%
Selling, general and administrative expenses		44,929			31,214			136,161			118,098
As a percent of net revenue		28.0	%		30.0	%		30.1	%		33.4	%
Provision for impairment and lease exit costs		196			4,405			379			4,405
Income from operations		41,435			16,041			86,546			56,564
As a percent of net revenue		25.8	%		15.4	%		19.1	%		16.02	%
Other income, net		66			210			164			821
Income before income taxes		41,501			16,251			86,710			57,385
Provision for income taxes		13,050			5,313			28,429			16,884
Net income from continuing operations		28,451			10,938			58,281			40,501
Net loss from discontinued operations		—			—			—			(1,138	)
Net income	$	28,451		$	10,938		$	58,281		$	39,363
Basic earnings (loss) per share:
Continuing operations	$	0.40		$	0.16		$	0.83		$	0.59
Discontinued operations		—			—			—			(0.02	)
Net basic earnings per share	$	0.40		$	0.16		$	0.83		$	0.57
Diluted earnings (loss) per share:
Continuing operations	$	0.40		$	0.16		$	0.82		$	0.57
Discontinued operations		—			—			—			(0.02	)
Net diluted earnings per share	$	0.40		$	0.16		$	0.82		$	0.55
Weighted-average outstanding:
Basic		70,400			68,207			70,251			68,711
Diluted		71,308			68,523			70,949			70,942

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lululemon athletica inc.
Condensed Consolidated Balance Sheets
Expressed in thousands

	January 31, 2010		February 1, 2009
ASSETS
Current assets
Cash and cash equivalents	$	159,573	$	56,797
Inventories		44,070		52,051
Other current assets		12,767		8,140
Total current assets		216,410		116,988
Property and equipment, net		61,591		61,662
Intangible assets, net		8,050		8,160
Deferred income taxes and other assets		21,207		24,826
Total assets	$	307,258	$	211,636
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	11,028	$	5,269
Other current liabilities		39,908		37,933
Income taxes payable		7,742		2,133
Total current liabilities		58,678		45,335
Deferred income taxes and other non-current liabilities		15,472		11,459
Stockholders’ equity		233,108		154,842
Total liabilities and stockholders’ equity	$	307,258	$	211,636

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lululemon athletica inc.
Condensed Consolidated Statements of Cash Flows
Expressed in thousands

	Fifty-Two Weeks Ended			Fifty-Two Weeks Ended
	January 31, 2010			February 1, 2009
Cash flows from operating activities
Net income from continuing operations	$	58,281		$	40,501
Items not affecting cash		28,889			9,300
Other, including net changes in other non-cash balances		30,790			(3,363	)
Net cash provided by operating activities		117,960			46,438
Net cash used in investing activities		(16,307	)		(46,795	)
Net cash (used in) provided by financing activities		(2,649	)		13,460
Effect of exchange rate changes on cash		3,772			(8,851	)
Increase in cash and cash equivalents from continuing operations		102,776			4,252
Cash and cash equivalents from continuing operations, beginning of period		56,797			52,545
Cash and cash equivalents from continuing operations, end of period	$	159,573		$	56,797

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lululemon athletica inc.
Reconciliation of Non-GAAP Financial Measure
Constant-dollar changes

	Thirteen Weeks Ended			Thirteen Weeks Ended
	January 31, 2010			February 1, 2009
	% Change			% Change
Comparable-store sales (GAAP)		42	%		(22	)%
Increase (decrease) due to foreign exchange rate changes		(13	)%		14	%
Comparable-store sales in constant dollars		29	%		(8	)%

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