{"id":1169,"date":"2026-06-06T11:08:01","date_gmt":"2026-06-06T11:08:01","guid":{"rendered":"https:\/\/reliablemovingcrews.com\/?p=1169"},"modified":"2026-06-06T11:08:01","modified_gmt":"2026-06-06T11:08:01","slug":"lululemon-shares-drop-as-forecast-cut-spotlights-challenges-for-incoming-ceo","status":"publish","type":"post","link":"https:\/\/reliablemovingcrews.com\/?p=1169","title":{"rendered":"Lululemon shares drop as forecast cut spotlights challenges for incoming CEO"},"content":{"rendered":"<div><div><div><ul><li>Summary<\/li><li>Companies<\/li><\/ul><\/div><div><\/div><\/div><div>June 5 (Reuters) &#8211; Lululemon Athletica (LULU.O)<svg><\/svg><span>, opens new tab<\/span> shares fell about 8% on Friday after the athleisure wear \u200cmaker cut its annual profit forecast, fanning worries over the pace of its turnaround and shifting focus to the challenges awaiting the incoming CEO.<\/div><div>The selloff highlights growing investor unease over the once high-flying yoga wear brand, following a proxy battle with founder Chip Wilson and a series of product missteps that \u200bhave dented its image, ahead of former Nike executive Heidi O\u2019Neill taking over in September.<\/div><div>&#8220;Brand momentum is fading, share losses are \u200bbuilding, and sales per foot are deteriorating &#8230;. The damage under the prior CEO is significant and long \u2060lasting,&#8221; Jefferies analysts said, adding that the company needs a full strategic reset under the new CEO.<\/div><h2>BRAND PRESSURE, LACKLUSTER INNOVATION<\/h2><div>In the \u200bquarter, Lululemon attributed the sales weakness in part to a spike in \u201cnegative commentary\u201d across media and social platforms, linked to a months-long \u200bproxy fight in which founder Wilson criticized the company\u2019s leadership. It also blamed product launches that failed to resonate with its core affluent female shopper.<\/div><div>Wilson, who is one of the company&#8217;s biggest independent shareholders, had accused the brand of having lost its &#8220;cool&#8221; factor, with leaders keen to &#8220;replicate mass-market, lower quality athletic retailers.&#8221;<\/div><div>The \u200bnegative sentiment has been compounded by stumbles in product innovation, including complaints that its $108 \u201cGet Low\u201d leggings were see-through, alongside earlier issues with fit and \u200bdesign in recent launches.<\/div><div>The Vancouver-based company, whose leggings cost up to $178, is in the early stages of a turnaround, ramping up discounting on older \u200cinventory and \u2060revamping marketing as tariffs squeeze margins.<\/div><h2>VALUATION SLIDES<\/h2><div>Its shares fell to an over seven-year low of $109.36, adding to a bruising 12-month stretch in which the stock has lost nearly two-thirds of their worth.<\/div><div>The company forecast a drop in second-quarter sales for the first time since the pandemic, prompting at least nine brokerages to cut their price target on the stock. The median PT has fallen to $149 from $205 \u200bthree months ago.<\/div><div>Growth has also been \u200bstifled by newer, fast-growing players \u2060in the space such as Alo, Vuori and Skims in the U.S., even as China remains a bright spot for Lululemon.<\/div><div>For the full year, profit is now expected to slide up to \u200b17% following a 9% drop in 2025 and operating margin is seen contracting 380 basis points \u200bto 16.1%, the \u2060lowest since 2006, according to brokerage William Blair.<\/div><div>Against this backdrop, attention is turning to incoming CEO O&#8217;Neill, with investors closely watching whether she can revive product innovation and restore momentum in the U.S.<\/div><div>The company\u2019s valuation multiple has compressed to around 10 times forward earnings, well below 22.85 \u2060for Nike (NKE.N)<svg><\/svg><span>, opens new tab<\/span> \u200band 15.10 for Adidas (ADSGn.DE)<svg><\/svg><span>, opens new tab<\/span>, according to LSEG data.<\/div><div>&#8220;Now that the CEO transition path \u200bis set, fundamentals come back into view and they are not good,&#8221; said BNP Paribas analyst Laurent Vasilescu.<\/div><div><address><div><div><noscript>\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"120\" height=\"120\" alt=\"Savyata Mishra\" class=\"wp-image-1167\" src=\"https:\/\/reliablemovingcrews.com\/wp-content\/uploads\/2026\/06\/14604d7c96be6660ddb0bfb2591c45ae.avif\"\/><\/figure>\n<\/noscript><\/div><div>Savyata Mishra<\/div><\/div><div><ul><li><span><div><svg><title>Email<\/title><\/svg><\/div><\/span><\/li><li><span><div><svg><title>X<\/title><\/svg><\/div><\/span><\/li><\/ul><\/div><\/address><address><div><div><noscript>\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"120\" height=\"120\" alt=\"Akriti Shah\" class=\"wp-image-1168\" src=\"https:\/\/reliablemovingcrews.com\/wp-content\/uploads\/2026\/06\/5115f5d633480c66eaba5ecbc4e6b2e5.avif\"\/><\/figure>\n<\/noscript><\/div><div>Akriti Shah<\/div><\/div><div><ul><li><span><div><svg><title>Email<\/title><\/svg><\/div><\/span><\/li><li><span><div><svg><title>X<\/title><\/svg><\/div><\/span><\/li><li><span><div><svg><title>Instagram<\/title><\/svg><\/div><\/span><\/li><li><span><div><svg><title>Linkedin<\/title><\/svg><\/div><\/span><\/li><\/ul><\/div><\/address><\/div><\/div><p>Read more <a href=\"https:\/\/reliablemovingcrews.com\/?p=1165\">Saks Global wins court approval for bankruptcy restructuring<\/a><\/p><p>Read more <a href=\"https:\/\/reliablemovingcrews.com\/?p=1163\">J&amp;J beats lawsuit alleging that talc caused three women\u2019s cancer<\/a><\/p><p>Read more <a href=\"https:\/\/reliablemovingcrews.com\/?p=1161\">US domestic treatment centers ready for Ebola even as Kenya plans persist<\/a><\/p>","protected":false},"excerpt":{"rendered":"<p>Lululemon Athletica shares fell about 8% on Friday after the athleisure wear \u200cmaker cut its annual profit forecast, fanning worries over the pace of its turnaround and shifting focus to the challenges awaiting the incoming CEO.<\/p>\n","protected":false},"author":1,"featured_media":1166,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[129],"class_list":["post-1169","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-shareholder-activism"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - 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