What is an income statement waterfall?

An income statement waterfall is a bar chart that walks from total revenue down to net income, with each step showing how much a cost or tax line removes (or adds). Subtotals — gross profit, operating income, pre-tax income — are anchored to zero so the cascade reconciles exactly to the bottom line.

How much of Lululemon Athletica (LULU) revenue becomes net income?

For TTM through Q2 2026, Lululemon Athletica turned $11.20B of revenue into $1.46B of net income — a net margin of 13%. The waterfall shows where the rest goes: cost of revenue, operating expenses, non-operating items, and taxes.

What are Lululemon Athletica (LULU) gross, operating, and net margins?

For TTM through Q2 2026, Lululemon Athletica reported a gross margin of 55.7%, an operating margin of 18.2%, and a net margin of 13%. Each subtotal in the waterfall corresponds to one of these margins.

Why does Lululemon Athletica (LULU) have such a high (or low) gross margin?

Gross margin (gross profit ÷ revenue) reflects how much of each revenue dollar remains after direct production costs. Capital-light software and platform businesses often show gross margins above 60–80% because their cost of revenue is mainly hosting and support. Hardware, retail, and commodity businesses show lower gross margins because raw materials and manufacturing costs are significant. The waterfall makes this visible at a glance — the size of the "Cost of Revenue" bar relative to Revenue is the gross margin complement.

What is the difference between gross, operating, and net margin?

Gross margin = (Revenue − Cost of Revenue) ÷ Revenue. It measures production efficiency. Operating margin = Operating Income ÷ Revenue. It adds operating expenses (R&D, S&M, G&A) and measures the profitability of core operations. Net margin = Net Income ÷ Revenue. It also includes interest, other income/expense, and taxes, and represents the shareholder take after everything.

Lululemon Athletica (LULU) Income Statement Waterfall

Revenue

$11.20B

Gross Margin

+55.7%

Operating Margin

+18.2%

Net Margin

+13.0%

Income statement waterfall for Lululemon Athletica (LULU) — TTM through Q2 2026

Net income: $1.46B

Margin breakdown for Lululemon Athletica (LULU) — TTM through Q2 2026

Line item	Amount	Running total
Revenue	$11.20B	$11.20B
Cost of Revenue	−$4.96B	$6.24B
Gross Profit	$6.24B	$6.24B
Operating Expenses	−$4.20B	$2.04B
Operating Income	$2.04B	$2.04B
Other Income / Expense	$34.50M	$2.07B
Pre-tax Income	$2.07B	$2.07B
Income Tax	−$614.97M	$1.46B
Net Income	$1.46B	$1.46B

Revenue$11.20B
Cost of Revenue−$4.96B
Gross Profit$6.24B
Operating Expenses−$4.20B
Operating Income$2.04B
Other Income / Expense$34.50M
Pre-tax Income$2.07B
Income Tax−$614.97M
Net Income$1.46B

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Income statement waterfall for Lululemon Athletica (LULU) — TTM through Q2 2026

Margin breakdown for Lululemon Athletica (LULU) — TTM through Q2 2026

Frequently asked questions

+What is an income statement waterfall?

+How much of Lululemon Athletica (LULU) revenue becomes net income?

+What are Lululemon Athletica (LULU) gross, operating, and net margins?

+Why does Lululemon Athletica (LULU) have such a high (or low) gross margin?

+What is the difference between gross, operating, and net margin?

Data & methodology

+What is this view?

+How to read this waterfall

+How is the data calculated?

+What is the USD toggle?

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