Shares of yoga-wear maker lululemon athletica (NASDAQ:LULU) 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.