Lululemon stock falls on departure of chief product officer

Shares of Lululemon (LULU) have been falling throughout Wednesday's trading as the company announced the departure of its Chief Product Officer Sun Choe, with a restructuring of the team to put Nikki Neuburger in as the Chief Brand & Product Activation Officer with Chief Merchandising Officer Elizabeth Binder reporting to Neuberger.

Market Domination Anchors Julie Hyman and Josh Lipton break down the latest development for Lululemon and what it could mean for the luxury retail brand moving forward.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Nicholas Jacobino and updated by Luke Carberry Mogan.

Video Transcript

Let's take a look at some top trending tickers this morning.

We're taking a look at shares of Lululemon, they're falling after announcing the departure of its chief product officer and saying it doesn't plan on refilling the role the apparel brand also launching a new team made up of leadership from its merchandizing and brand branches.

Uh Notably a new name here for some of the investors out there.

Perhaps Jonathan Chung is going to be leading that particular charge here is this is gonna be consolidated up underneath of him.

This is a person that also had, you know, kind of a seasoned professional track record over three decades essentially across brands like gap uh Pangaea, I think was one of them, Merrill was in there.

Uh Levi's with there as well.

So all of these things considered, we'll see if a lot of that is transferable to the business of stress shoe fabrics over at little lemon and some shoes here and there.

Yeah, I think the worry here from analysts is excuse me, is exactly what this could potentially signal here at least in the short term and maybe that this is a sign of weak demand for the current products that they have because they certainly have seen a cooling in demand of some of those hip products.

Not too long ago, when we've been talking about Lulu Lemon.

Over the past 12 to 18 months, there's been so much excitement surrounding their belt bags.

That excitement has certainly faded here recently over the last couple of months.

So three of those for people for Christmas, you're a little late to the trend here, Brad.

But, but I think the, I think the question for analysts is just future changes, whether or not that is going to take a little bit longer to take place and to really happen here at Lululemon.

And remember this is a stock, we have the one year up on the screen right now, but year to date shares have tremendously underperformed the broader market.

You're looking at losses here of nearly 37% and that's versus the S and PS gains of right around 11 to 12%.

So certainly we have seen Lulu Lemon under a bit of pressure right now.

Raymond James Rick Patel, the analyst there, say that this adds a wall of worry at least in the near term towards Lulu Lemon.

So lots of questions just about what exactly that product line is going to potentially look like here, at least in the coming quarters.

Yeah, I mean, I was waiting for, you know, some type of call or for this Evercore.

I si note to be unicorn tears, no fears or something like that.

But uh we didn't get that.

We just got Chief Product Officer departure ads to near term Lulu concerns.

And ultimately, one of the other things that they had been concerned about, uh they talk about this instinct being that Lou's explanation that some small execution issues with small sizes select color stock outs didn't fully explain some of the US same store sales pressures as well here.

So continuing to think about the price point, especially as consumers are pushing back in specific areas of even a leisure.

I think that's where Lou Lemon might have to see some moderation in how it puts price into the market based on the product as well.

Here.

I mean, I know for me, I go straight to that back of that store and I'm, I'm, this is my one wealth tip of the day for folks.

Here you go straight to the back of the store.

You look for that.

We made too much track and you say load me up with some half price, a lot of deals on that.

I just made an order of the day we made too much.

All right.