Lululemon Faces More PR Problems, and Restoration Hardware Soars After Hours

The blue chips lost 102 points today, while Lululemon encountered more PR issues. After hours, Restoration Hardware shares soared on a strong earnings report.

Jun 11, 2014 at 10:00PM

After several sessions of steady trading and new records, stocks took a hit today as the World Bank cut its forecast for global economic growth. As a result, the Dow Jones Industrial Average (DJINDICES:^DJI) finished 102 points lower, or 0.6%. The S&P 500 and the Nasdaq gave back 0.4% and 0.1%, respectively.

The World Bank, a financial arm of the United Nations charged with providing loans to developing countries, lowered its 2014 GDP growth outlook from 3.2% to 2.8%, citing the harsh winter in the U.S. and the ongoing crisis in Ukraine. While the news takes into account events the market has already factored in, the cut in the forecast is significant and also reflects slowing growth in China and Europe's difficulties in bouncing back from recession. The lending institution also cut its forecast for U.S. GDP growth from 2.8% to 2.1% because of the cold winter.

The surprise defeat of House Majority Leader Eric Cantor in a primary election by a Tea Party insurgent also may have caused a minor sell-off late in the session, as Cantor is seen as a Wall Street ally and the Tea Party has criticized corporate America. Cantor said he would step down from the leadership post at the end of the month. With the midterm elections less than five months away, national politics could become a greater focus for investors in the coming months.


Source: Fool Flickr.

Turning to individual stocks, lululemon athletica (NASDAQ:LULU) was once again embarrassed by its founder, Chip Wilson, who criticized the company's new chairman, Michael Casey, and another director, saying he voted against them in board elections because he believes the company is too focused on short-term growth. Last year, Wilson was forced out of the chairmanship after he made off-color remarks about women's bodies, and in the past he's stirred controversy with offensive comments about Asians as well as some odd political opinions. Coming at a time when Lululemon is trying to repair a tarnished brand image after a 2013 that featured a massive product recall, the surprise resignation of its CEO, and Wilson's unfortunate comments, the founder's new airing of grievances does the company no favors. Wilson remains Lululemon's biggest shareholder, with 27% of its stock. Lululemon issued a press release in response, saying that the board is "committed to the value of the brand" and creating long-term shareholder value. Shares finished down 2.6% on the news.

After hours, shares of Restoration Hardware (NYSE:RH) were stacking higher, gaining 14% on a blowout earnings report. The home-furnishings retailer posted earnings of $0.18, beating estimates of $0.11, as revenues jumped 21.6% to $366.3 million, well ahead of the consensus at $346.8 million. Comparable brand revenue was up 18%, which includes e-commerce sales, and CEO Gary Friedman said the company outperformed the industry by a "wide margin" and said its real estate transformation was delivering "outstanding" results. The retailer's full-year EPS guidance was also ahead of the Wall Street view at $2.24-$2.30. Shares hit an all-time high after hours, and I'd expect them to continue to grow as the company's brand strength grow and it continues to add new stores.

Will this stock be your next multibagger?
Give us five minutes and we'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks one stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.

Jeremy Bowman 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 don't 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers