Lululemon Athletica shares fell about 8% on Friday after the athleisure wear maker cut its annual profit forecast, fanning worries over the pace of its turnaround and shifting focus to the challenges awaiting the incoming CEO. 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 have dented its image, ahead of former Nike executive Heidi O'Neill taking over in September.
"Brand momentum is fading, share losses are building, and sales per foot are deteriorating .... The damage under the prior CEO is significant and long lasting," Jefferies analysts said, adding that the company needs a full strategic reset under the new CEO.
