I hope this class is almost over. Photographer: Joe Raedle/Getty Images
I hope this class is almost over. Photographer: Joe Raedle/Getty Images

A time-honored tradition in corporate financial reporting is to change the way performance gets measured when it takes a turn for the worse. Moving the goalposts is the easy part. The hard part for a company's executives is coming up with a good explanation for doing it.

So it is with Lululemon Athletica Inc., the Vancouver-based retailer known for its women's yoga wear (along with a recall of some pants last year because they were a bit too revealing). Often when folks think of corporate numbers games, the images that come to mind are of companies crashing to Earth. This isn't that kind of story. It's more an example of slickness than scandal -- one of those subtle, annoying spin jobs that companies pull on investors all the time, never expecting anyone to call them on it.

Last week, Lululemon reported its quarterly earnings, which at $110 million were about the same as they were a year earlier. One thing that stood out in its news release was the way it calculates its figures for sales at stores open for more than a year. It used to call this metric "comparable store sales." Before last quarter, such sales had been growing.

But last quarter, Lululemon's comparable store sales fell 5 percent. So what did the company do? It changed how it reports them. From now on, it's citing "total comparable sales" instead of "comparable store sales." Under this new way of doing things, Lululemon said sales rose 2 percent last quarter. And we can all agree that a 2 percent gain is better than a 5 percent decline.

Moreover, the company stopped providing forecasts using the old metric. As for the new metric, the company said it expects total comparable sales to be little changed this quarter, excluding the effects of foreign-exchange rates.

What bugged me was that the company's news release didn't clearly define any of these terms (which don't have any standardized meaning) or explain why Lululemon changed its methodology. So I sent some questions to the contact person listed on the company's news release, Alecia Pulman, who works for an outside public relations firm, ICR Inc. The story only got more amusing.

The difference between the old metric and the new one is that the new one includes online sales. The old metric didn't. The company reported both ways for its most recent quarter, but in the future it will use only the new way, Pulman said. OK, so far so good, I thought.

I also asked her why Lululemon had introduced the new metric and whether last quarter's negative results had been a consideration in the decision. "That is how most of the industry reports year over year sales of stores open for at least one year," she said in an e-mail. "All other industry peers report total combined, so LULU has been planning to do that for 2014."

That exchange was March 27. And again, so far so good. But I had two more questions. So I asked her: When she said most of the industry reports this way, which companies was she referring to? And could she point me to some examples? Four days passed, and she hadn't responded. I sent another e-mail on March 31, asking the same follow-up questions. To make a long story short, I never got answers.

This shouldn't be a hard thing to do. I mean, how many other publicly traded yoga-pants companies can there be?

At least I have a good working theory now for why Lululemon changed the way it reports its same-store sales: Because the new way makes its numbers look better.

Sometimes financial reporting can be hard to understand. In this case, it isn't.

To contact the writer of this article: Jonathan Weil at jweil6@bloomberg.net.

To contact the editor responsible for this article: James Greiff at jgreiff@bloomberg.net.