Laurent Potdevin has resigned as CEO of Lululemon Athletica inc. (NASDAQ:LULU) after a little more than four years leading the yoga-wear giant. The company’s board has started a search for a new CEO. Meanwhile, Glenn Murphy, Executive Chairman, will take a more active role as executive chairman on an interim basis.
“While this was a difficult and considered decision, the Board thanks Laurent for his work in strengthening the company and positioning it for the future,” said Glenn Murphy, Executive Chairman of the Board. “Culture is at the core of lululemon, and it is the responsibility of leaders to set the right tone in our organization. Protecting the organization’s culture is one of the Board’s most important duties.”
In his newly expanded role as Executive Chairman, Mr. Murphy will focus on achieving long-term, sustainable results for all stakeholders. Three of lululemon’s senior leaders are being elevated and will take on additional responsibilities, reporting to Mr. Murphy: Celeste Burgoyne, Executive Vice President, Americas, will oversee all channel and brand-facing aspects of the global business, including stores and e-commerce, as well as brand marketing; Stuart Haselden, Chief Operating Officer, will have responsibility for all operations related to finance, supply chain, people, and technology; and Sun Choe, Senior Vice President of Merchandising, will guide all aspects of product development, design, innovation, and merchandising.
Mr. Murphy added, “The Board is entirely confident that Celeste, Stuart and Sun – three leaders deeply tied to the recent momentum in the business – can continue to execute on lululemon’s growth strategy and drive global performance. Based upon their contributions to the recent expansion of the business, their history of collaboration with one another and their strong support across the lululemon organization, we believe this trio of leaders will take lululemon from strength to strength.”
Today, lululemon also reaffirmed its updated guidance provided on January 8, 2018, that reflects the ongoing momentum of the business. In addition, the company’s growth strategies remain on track to achieve $4 billion in revenue in 2020. The company’s continued success in the market it created is rooted in its strong connection to its guests and vertically integrated business model; embodiment of the active, mindful lifestyle; and category-disrupting product innovation that blends fashion and function.
Shares of Lululemon are down nearly 3% to $75.12 in after-hours trading Monday. LULU has a 1-year high of $81.92 and a 1-year low of $47.26. The stock’s 50-day moving average is $78.69 and its 200-day moving average is $66.41.
On the ratings front, Lululemon stock has been the subject of a number of recent research reports. In a report issued on February 2, Suntrust Robinson Humphrey analyst Pamela Quintiliano reiterated a Buy rating on LULU, with a price target of $95, which implies an upside of 22% from current levels. On the other hand, on January 22, B.Riley FBR’s Susan Anderson reiterated a Hold rating on the stock and has a price target of $78.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Pamela Quintiliano and Susan Anderson have a yearly average loss of -0.7% and a return of 5.9% respectively. Quintiliano has a success rate of 48% and is ranked #3728 out of 4745 analysts, while Anderson has a success rate of 60% and is ranked #937.
Overall, 9 Wall Street analysts have assigned a Hold rating on LULU stock, while 14 have given a Buy rating for the stock. When considering if perhaps the stock is under or overvalued, the average price target is $83.85 which is 7.5% above where the stock opened today.