Three issues from LULU’s conference call yesterday should give investors pause that $Lululemon(LULU.US) may still not be on the right path after a disastarous 6-month stretch which included the firing of their previous CEO.
1/ Nothing epitomizes LULU ‘s problems than its recently introduced “off the body” — loose fitting — yoga pants and gym wear. The concept is wholly inconsistent with the LULU brand - which is yoga wear that is tight-fitting, sexy, shows off one’s body. It would be akin to putting the Tesla brand on non-EV vehicles.2/ Blaming weak 1Q sales on the boardroom drama where founder Chip Wilson and the current board demanded more seats. Since when does a proxy fight impact underlying sales? 3/ New CEO Heidi O’Neill won’t start until September (perhaps due to a non-compete limitation from Nike during her previous role there as President, Consumer and Marketing). That implies another two quarters of mediocre results as LULU struggles to build momentum as competitors Vuori, Alo, and Slims continue to take share.
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