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What: Shares of lululemon athletica inc (NASDAQ:LULU) were taking a dive today, falling 16% after the company released another lackluster earnings report.
So what: The troubled times continued for the yoga-apparel vendor as same-store sales fell for the second quarter in a row, dropping 4% on a constant-dollar basis. Adjusted earnings per share of $0.34 actually beat estimates of $0.32, and overall sales increased 11% to $384.6 million, ahead of the consensus at $381.2 million. Weak guidance and inner turmoil seemed to spoil what would have been an uneventful report, as CEO Laurent Potdevin stressed that the company was in the middle of a "transition year."
Now what: Looking ahead, the company sees an adjusted EPS of just $1.71-$1.76, below estimates at $1.89, and guidance for the current quarter was short, as well. Yesterday, founder Chip Wilson added fuel to investors' concerns when he said that he voted against Lululemon's new Chairman and another director for putting short-term performance ahead of the company's brand integrity. That surprise announcement preceded today's news that CFO John Currie would be retiring. Currie was the last remaining principal from the executive team that had led Lululemon during its stand-out growth years as former CEO Christine Day left the company at the end of last year. This means that an entirely new management team is now leading the company. Separately, the board of directors authorized a $450 share buyback program, though that did little to quell the sell-off. With inner conflict stirring, and same-store sales falling, the once-strong apparel retailer will have to work hard to convince the market that it can regain the glory of its growth days.