If you searched this, you probably are not a lululemon shareholder. You run a store, and you want a best-in-class benchmark to hold your own numbers against. So this article does two things the finance recaps skip: it shows exactly what lululemon counts as cost of goods sold, and it turns that into a yardstick you can apply to your own per-order math.
The headline numbers, two fiscal years
Lululemon's fiscal calendar ends in late January, so "the 2023 annual report" is ambiguous — it can mean the 10-K filed in 2023 (fiscal year ended January 29, 2023) or the fiscal 2023 year that ended January 28, 2024. Here are both, so you can match whichever one you meant.
For the year ended January 29, 2023, lululemon's own Form 10-K lists cost of goods sold of $3,618,178 thousand against net revenue of about $8.1 billion, leaving gross profit near $4.5 billion and a gross margin of 55.4%.
For the fiscal 2023 year ended January 28, 2024, net revenue rose about 19% to roughly $9.6 billion and gross margin expanded to 58.3%, according to SGB Media. That puts cost of goods sold near $4.01 billion — a figure Macrotrends pegs at about a 10.8% increase over the prior year.
The number worth internalizing is not the billions. It is the ratio: COGS was roughly 42-45% of revenue across these two years, which is how lululemon keeps a gross margin in the mid-to-high 50s. That is the bar.
What lululemon actually counts inside COGS
This is where most summaries go vague and where an operator can learn something. Lululemon's 10-K defines cost of goods sold to include the cost of purchased merchandise, the cost of delivering inventory to distribution centers, distribution center costs, production and design department costs, occupancy costs for company-operated stores, hemming, and shrink and inventory provisions.
Read that list again as a store owner. Lululemon pulls inbound freight, fulfillment-center overhead, and even store occupancy into COGS — costs a lot of small sellers scatter across "shipping," "rent," or a generic expenses bucket. That accounting choice is the whole reason a clean gross margin is possible: everything that varies with making and moving the product sits in one line, above the margin.
If you want the deeper principle — which costs belong "above the line" versus in operating expenses — the companion piece on direct operating expenses draws that boundary, and the broader ecommerce ops economics guide ties it to the rest of your P&L.
Why this matters more for a POD store than you'd think
You are not manufacturing in bulk like lululemon, but the lesson transfers directly: your true COGS is more than the supplier's product price. For a print-on-demand order, COGS realistically includes the item cost, the supplier's shipping charge, and the unrecoverable production cost on any refund or chargeback — because a printed item can't be restocked.
That last point is the one POD sellers underweight. When you refund a POD order, the production cost is gone, so a single lost dispute can cost roughly two to two-and-a-half times the order value once you add the clawed-back amount, the chargeback fee, and the sunk COGS, per chargeback.io. Lululemon folds shrink and inventory provisions into COGS for exactly this reason — real losses belong in the cost of sales, not hidden elsewhere.
Worked example: your gross margin vs the benchmark
Say you run an operating store doing 340 orders a month at a $31 average order value — about $10,540 in monthly revenue. Your POD supplier charges $9 per unit plus $4 shipping, so $13 lands in true COGS per order.
Per-order gross math:
- Revenue: $31.00
- Product cost: $9.00
- Supplier shipping: $4.00
- Gross profit per order: $31.00 − $13.00 = $18.00
- COGS as a share of revenue: $13.00 ÷ $31.00 = 41.9%
- Gross margin: $18.00 ÷ $31.00 = 58.1%
At 340 orders, that is $4,420 in monthly COGS against $10,540 in revenue — a 58.1% gross margin, right in lululemon's fiscal 2023 neighborhood. Encouraging. But gross margin is not profit, which is the trap.
Now subtract the costs that live below the gross line. Say you spend $2,800/month on Meta Ads (a customer-acquisition cost of about $8.24 per order across 340 orders) plus Shopify and app fees. Suddenly the picture changes:
- Monthly gross profit: 340 × $18.00 = $6,120
- Meta Ads: −$2,800
- Payment processing (roughly 2.9% + $0.30 per order ≈ $0.90 + $0.30 = ~$1.20/order, ~$408): −$408
- Remaining before fixed costs and your time: $2,912
Your gross margin looked like lululemon's. Your operating reality is thinner, because ad spend and processing — costs lululemon dilutes across billions in revenue — eat a small store alive if COGS drifts up even a few points. For the formal version of this calculation, the unit economics reference walks the full stack from revenue to contribution.
How to read your COGS line like a CFO
Three habits turn the lululemon benchmark into something actionable:
- Put everything variable above the line. Product cost, inbound and supplier shipping, transaction-linked fees, and expected refund/reprint loss all belong in COGS — mirror lululemon's choice to bundle freight and shrink so your gross margin tells the truth.
- Track COGS as a percentage, not a dollar. Lululemon's story is a 42-45% COGS ratio holding steady while revenue grew. Your dollar COGS should rise with sales; the ratio is the number that signals a pricing or supplier problem.
- Reconcile it every month. COGS is tallied and closed each period against revenue — the mechanics of why are covered in is cost of goods sold a temporary account, and the hands-on steps live in recording cost of goods sold.
Where Victor fits
Most store owners never see a clean COGS ratio because the inputs are scattered — product cost in the supplier portal, ad spend in Meta, fees buried in payouts. PodVector AI's Victor is an AI employee that pulls your live Shopify, Meta Ads, Google Ads, Printify, Printful, Gelato, and Klaviyo data together and computes true per-order profit — COGS, fees, and ad spend netted against each order, not a gross-margin illusion. Victor delivers the breakdown as a report to your Google Drive, and every write action it takes is approval-gated, so you stay in control.
If you want your own numbers held against a benchmark like lululemon's instead of guessing, you can start with PodVector AI.
FAQs
What was lululemon's cost of goods sold in its 2023 annual report?
For the year ended January 29, 2023, lululemon reported COGS of $3,618,178 thousand in its Form 10-K. For the fiscal 2023 year that ended January 28, 2024, COGS was approximately $4.01 billion, per Macrotrends. The fiscal calendar is why the two figures differ — match the one to the year you mean.
What does lululemon include in cost of goods sold?
Per its 10-K, the line covers purchased merchandise, delivery of inventory to distribution centers, distribution center costs, production and design department costs, store occupancy costs, hemming, and shrink and inventory provisions. It is broader than just "what we paid for the shirt."
What was lululemon's gross margin?
Gross margin was 55.4% for the year ended January 29, 2023 and expanded to 58.3% for fiscal 2023 ended January 28, 2024, according to SGB Media. That mid-to-high-50s range is a realistic ceiling for an apparel seller running clean economics.
How does this help me benchmark my own store?
Convert lululemon's COGS to a percentage of revenue — roughly 42-45% — and compare it to your own COGS ratio per order. If your variable costs (product, shipping, fees, refund loss) run much higher than that share, your pricing or supplier terms, not your ad spend, are the first thing to fix.
Is gross margin the same as profit?
No. Gross margin is revenue minus COGS. Your actual profit still has to absorb ad spend, payment processing, apps, and your own time — costs that sit below the gross line and that a small store feels far more sharply than a company with billions in revenue, as the ops economics guide lays out.