Since Lululemon Athletica Inc. (NASDAQ: LULU) posted its first-quarter earnings a week ago, the share price has dropped from $82.28 to $66.15 at last Friday’s close. That is down nearly 20% — and the company beat estimates for both earnings per share and revenues.
News that the company’s CEO, Christine Day, was leaving as soon as a replacement could be found killed the share price. The drop may have less to do with Day’s leaving than it does with the uncertainty about who the company will bring in next. Day took over at Lululemon in 2008 and the company’s share price has risen more than 350% since then, even including last week’s collapse.
From an investor’s point of view, Day presided over a massive expansion of the company’s business. The company had just 81 stores worldwide at the end of February 2008, compared with more than 200 today. Revenue has grown from about $275 million annually to $1.37 billion.
Can anyone continue that growth path? Could Day herself have done it? Chances are it wouldn’t have gone on at that pace, no matter what Day chose to do.
Analysts worry about the management transition and about whether the company can deliver on new products in a timely fashion. There has been talk that the company is looking at adding a line of men’s yoga clothing, but that is neither guaranteed to happen nor guaranteed to succeed. And there has to be a limit to what women will pay for yoga pants, right?
Shares of Lululemon are down another 1.5%, at $65.20 in a 52-week range of $52.20 to $82.50.
The Average American Has No Idea How Much Money You Can Make Today (Sponsor)
The last few years made people forget how much banks and CD’s can pay. Meanwhile, interest rates have spiked and many can afford to pay you much more, but most are keeping yields low and hoping you won’t notice.
But there is good news. To win qualified customers, some accounts are paying almost 10x the national average! That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 3.80% with a Checking & Savings Account today Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.
Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 4.00% with a Checking & Savings Account from Sofi. Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.