Lululemon CEO Looking for an Exit
Shares of yoga-wear maker lululemon athletica resembled less a "downward facing dog," and more a dog that has received a swift kick to the gut on Monday, dropping nearly 13% in after-hours trading.
In part, this was a response to the company's Q1 earnings results, which showed 21% sales growth for the quarter, but only 9% better gross profits and flat earnings of $0.32 on a per-share basis. Also noteworthy, though, for its effect on the stock and on investors' psyches: The CEO is stepping down.
Simultaneously with reporting earnings, lululemon announced that longtime CEO Christine Day intends to resign just as soon as a replacement can be found. In a statement, the company noted that it is announcing Day's impending departure now "so the Board has the benefit of a healthy transition period, and can openly use that time for a thorough search for the next CEO."
Meanwhile, lululemon says its business remains healthy with $340 million to $345 million in revenues expected in the current second fiscal quarter, and comparable-store sales expected to grow between 5% and 7% "on a constant-dollar basis." Earnings are expected to range from $0.33 to $0.35 per share, slightly up from Q1 levels.
The article Lululemon CEO Looking for an Exit originally appeared on Fool.com.Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends lululemon athletica. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.