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.
Top Gaining Stocks
Top Losing Stocks