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 #1 Thing to Do Before You Claim Social Security (Sponsor)
Choosing the right (or wrong) time to claim Social Security can dramatically change your retirement. So, before making one of the biggest decisions of your financial life, it’s a smart idea to get an extra set of eyes on your complete financial situation.
A financial advisor can help you decide the right Social Security option for you and your family. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.
Click here to match with up to 3 financial pros who would be excited to help you optimize your Social Security outcomes.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.