LULULEMON ATHLETICA INC. ANNOUNCES THIRD QUARTER FISCAL 2010 RESULTS
Third Quarter Net Revenue Increases 56% to $175.8 million
Third Quarter Diluted EPS of $0.36

Vancouver, Canada — December 9, 2010 — lululemon athletica inc. [NASDAQ:LULU; TSX:LLL] today announced financial results for the third quarter ended October 31, 2010.

For the thirteen weeks ended October 31, 2010:

	•		Net revenue for the quarter increased 56% to $175.8 million from $112.9 million in the third quarter of fiscal 2009. Net revenue from corporate-owned stores was $143.2 million for the quarter, an increase of 46% from $98.1 million in the third quarter of fiscal 2009, and comparable-store sales increased by 29% on a constant-dollar basis.
	•		Gross profit for the quarter increased by 72% to $96.8 million, and as a percentage of net revenue gross profit increased to 55% for the quarter from 50% in the third quarter of fiscal 2009.
	•		Income from operations for the quarter increased by 103% to $42.4 million, and as a percentage of net revenue was 24% compared to 19% of net revenue in the third quarter of fiscal 2009.
	•		Diluted earnings per share for the quarter was $0.36 on net income of $25.7 million, compared to diluted earnings per share of $0.20 on net income of $14.1 million in the third quarter of fiscal 2009.
	•		The tax rate for the quarter was 39% versus 33% a year ago. The tax rate has been increased to take into account the additional deferred income tax liability for estimated future taxes attributable to undistributed earnings of the Canadian operating subsidiary.

For the thirty-nine weeks ended October 31, 2010:

	•		Net revenue for the first three quarters increased 60% to $466.3 million from $292.3 million in the same period of fiscal 2009. Net revenue from corporate-owned stores was $388.2 million for the first three quarters of fiscal 2010, an increase of 52% from $256.1 million in the first three quarters of fiscal 2009. Year to date comparable-store sales increased by 31% on a constant-dollar basis.
	•		Gross profit for the first three quarters increased by 84% to $251.5 million from $136.5 million in the same period of fiscal 2009. As a percentage of net revenue, gross profit increased to 54% for the first three quarters of fiscal 2010 from 47% in the same period of fiscal 2009.
	•		Income from operations for the first three quarters increased by 142% to $109.1 million, and as a percentage of net revenue was 23% compared to 15% of net revenue in the same period of fiscal 2009.
	•		Diluted earnings per share on a year to date basis was $0.93 on net income of $67.1 million, compared to diluted earnings per share of $0.42 on net income of $29.8 million in the same period of fiscal 2009.
	•		The tax rate for the first three quarters of fiscal 2010 was 40% versus 34% for the same period in the prior year. The tax rate has been increased to take into account the additional deferred income tax liability for estimated future taxes attributable to undistributed earnings of the Canadian operating subsidiary.

Creating components for people to live longer, healthier and more fun lives

The Company ended the third quarter of fiscal 2010 with $224.8 million in cash and cash equivalents compared to $101.8 million at the end of the third quarter of fiscal 2009. Inventory at the end of the third quarter of fiscal 2010 totaled $73.0 million compared to $52.1 million at the end of the third quarter of fiscal 2009. The Company ended the quarter with 134 stores in North America and Australia.

Christine Day, lululemon’s CEO stated: “We are very pleased with our strong third quarter results. Our technical product continues to drive our top line growth, cementing our position as an innovative athletic wear company with yoga at our core. Looking ahead, we remain excited about the potential for lululemon and will continue to execute on our strategies and invest in our future for the significant growth opportunities still ahead of us.”

Updated Outlook

For the fourth quarter of fiscal 2010, we expect net revenue to be in the range of $210 million to $215 million based on a comparable-store sales percentage increase in the high teens on a constant-dollar basis. Diluted earnings per share are expected to be in the range of $0.46 to $0.48 for the quarter. This assumes 72.2 million diluted weighted-average shares outstanding and a 40% tax rate.

Conference Call Information

A conference call to discuss third quarter results is scheduled for today, December 9, 2010, at 9:00 am Eastern Time. Those interested in participating in the call are invited to dial (877) 303-3203 approximately 10 minutes prior to the start of the call. The conference call will also be webcast live at www.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, visit www.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.

Creating components for people to live longer, healthier and more fun lives

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 at www.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:

Alecia Pulman
ICR, Inc
203-682-8224

Creating components for people to live longer, healthier and more fun lives

lululemon athletica inc.

Condensed Consolidated Statements of Operations
Expressed in thousands, except per share amounts

		Thirteen				Thirteen				Thirty-Nine				Thirty-Nine
		Weeks				Weeks				Weeks				Weeks
		Ended				Ended				Ended				Ended
		October 31,				November 1,				October 31,				November 1,
		2010				2009				2010				2009
		(unaudited)				(unaudited)				(unaudited)				(unaudited)
Net revenue		$	175,800			$	112,891			$	466,305			$	292,292
Costs of goods sold			78,968				56,553				214,818				155,766
Gross profit			96,832				56,338				251,487				136,526
As a percent of net revenue			55.1	%			49.9	%			53.9	%			46.7	%
Selling, general and administrative expenses			54,456				35,412				142,394				91,415
As a percent of net revenue			31.0	%			31.4	%			30.5	%			31.3	%
Income from operations			42,376				20,926				109,093				45,111
As a percent of net revenue			24.1	%			18.5	%			23.4	%			15.4	%
Other income (expense), net			91				(3	)			2,345				98
Income before provision for income taxes			42,467				20,923				111,438				45,209
Provision for income taxes			16,532				6,855				44,207				15,379
Net Income			25,935				14,068				67,231				29,830
Net income attributable to non-controlling interest			234				—				150				—
Net income attributable to lululemon athletica inc.		$	25,701			$	14,068			$	67,081			$	29,830
Basic earnings per share		$	0.36			$	0.20			$	0.95			$	0.42
Diluted earnings per share		$	0.36			$	0.20			$	0.93			$	0.42
Basic weighted-average shares outstanding			70,938				70,279				70,786				70,205
Diluted weighted-average shares outstanding			71,835				71,100				71,782				70,759

Creating components for people to live longer, healthier and more fun lives

lululemon athletica inc.

Condensed Consolidated Balance Sheets
Expressed in thousands

		October 31,				January 31,
		2010				2010
		(unaudited)				(audited)
ASSETS
Current assets
Cash and cash equivalents		$	224,775			$	159,573
Inventories			73,023				44,070
Other current assets			13,919				12,767
Total current assets			311,717				216,410
Property and equipment, net			67,457				61,591
Intangible assets, net			26,488				8,050
Deferred income taxes and other assets			13,310				21,207
Total assets		$	418,972			$	307,258
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	9,275			$	11,027
Other current liabilities			49,483				39,909
Income taxes payable			5,518				7,742
Total current liabilities			64,276				58,678
Deferred income taxes and other non-current liabilities			28,023				15,472
Stockholders’ equity			326,673				233,108
Total liabilities and stockholders’ equity		$	418,972			$	307,258

Creating components for people to live longer, healthier and more fun lives

lululemon athletica inc.

Condensed Consolidated Statements of Cash Flows
Expressed in thousands

		Thirty-Nine Weeks Ended				Thirty-Nine Weeks Ended
		October 31, 2010				November 1, 2009
		(unaudited)				(unaudited)
Cash flows from operating activities
Net income		$	67,231			$	29,830
Items not affecting cash			36,201				21,109
Other, including net changes in other non-cash balances			(15,515	)			834
Net cash provided by operating activities			87,917				51,773
Net cash used in investing activities			(34,433	)			(10,214	)
Net cash provided by financing activities			7,945				(27	)
Effect of exchange rate changes on cash			3,773				3,503
Increase in cash and cash equivalents			65,202				45,035
Cash and cash equivalents, beginning of period		$	159,573			$	56,797
Cash and cash equivalents, end of period		$	224,775			$	101,832

Creating components for people to live longer, healthier and more fun lives

lululemon athletica inc.

Store Count and Square Footage¹
Year ended January 30, 2011
Square Footage Expressed in Thousands

Number of

Number of

Number of

Stores Open

Stores

Stores

Number of

at the

Opened/Acquired

Closed

Stores Open

Beginning of

During the

During the

at the End of

the Quarter

Quarter2

Quarter

the Quarter

1st Quarter

110

4

0

114

2nd Quarter

114

12

0

126

3rd Quarter

126

4

0

130

Gross Square

Total Gross

Feet Lost

Square Feet

Gross Square

due to Store

Total Gross

at the

Feet Added

Closures

Square Feet

Beginning of

During the

During the

at the End of

the Quarter

Quarter2,3

Quarter

the Quarter

1st Quarter

316

9

0

325

2nd Quarter

325

25

0

350

3rd Quarter

350

14

0

364

Creating components for people to live longer, healthier and more fun lives

lululemon athletica inc.

Reconciliation of Non-GAAP Financial Measure
Constant-dollar changes
(unaudited)

		Thirteen Weeks				Thirteen Weeks
		Ended				Ended
		October 31, 2010				November 1, 2009
		% Change				% Change
Comparable-store sales (GAAP)			32	%			11	%
Increase (decrease) due to foreign exchange rate changes			(3	)%			(1	)%
Comparable-store sales in constant dollars			29	%			10	%

Creating components for people to live longer, healthier and more fun lives