Last year, lululemon athletica (NASDAQ:LULU) went from the top of the charts to the bottom of the barrel. By the end of the year, it was looking as if the company could do no right. Then, at the beginning of 2014, Lululemon brought in a new CEO, changed things up, and made a fresh start. Well, it hasn't clicked yet. The stock is down 30% since the start of the year, and the trend continues to look weak.

Now trading at just $41, Lululemon is longing for the heady days of yesteryear, when shares touched $80 for a time. With such a deep fall, it might look as if Lululemon is finally cheap enough to pick up, but has the business changed its tune enough to be worth even $40 per share?

The competitive landscape has shifted
There was a time when you couldn't buy yoga pants everywhere. Those days are gone. Lululemon put yogawear on the map and did just as much to make it a fashion statement. The sprint out of the gates put the business way out in front of traditional sporting-goods retailers and gave it a solid brand moat. Then came the sheer-pants problem, the pilling problem, and the mouthing-off-founder problem.

Those faults coincided with Nike (NYSE:NKE) and Under Armour's (NYSE:UAA) realizations that making quality yoga pants wasn't all that difficult. Now, Lululemon is trying to rebuild a brand with much tougher competition all around it.

In Lululemon's last quarter, comparable-store sales fell, while total sales grew 13%. That trickled down to a 15% drop in earnings per share. Lululemon hasn't been able to hold margins up, as competitors have forced the brand to promote in order to sell product. Gross margin fell 3.5 percentage points, in part because of lower margins from having to move seasonal sale items.

Meanwhile, Nike and Under Armour are killing it. Their focus on women's clothing -- which translates to a focus on Lululemon's core audience -- has paid off. Sales are rising for both retailers, and both are expanding their focus to try to win even more business from disaffected Lululemon fans.

In Under Armour's stores, for instance, women's and men's products share the spotlight in display windows and entry points. The company's spokesperson, ballerina Misty Copeland, is projected on the front wall, increasing the visibility of Under Armour's women's line.

Where Lululemon is falling short
Lululemon's problem isn't sales -- that's just a symptom. Its problem is that it lost customers' trust, and it hasn't really addressed that challenge. The business has made changes in management, but it hasn't come out and made a statement product or marketing campaign that shows off its renewed dedication to quality. That means customers still doubt the company's products and are happy to look to competitors for their needs.

In addition, Nike and Under Armour are now expanding their products faster than Lululemon -- or at least with more visibility. Nike just launched its Zoom Fit line of shoes, which focus on women's training and expand beyond the usual apparel line, which typically doesn't include footwear. Those sorts of product launches are catching Lululemon flat-footed and giving completion a consistent edge.

If Lululmemon wants to get back on top -- or even just start doing a little better -- it needs to launch a product that gives female athletes a reason to believe in the brand again. Not a reworked hoodie or a new cut for its leggings -- something genuinely groundbreaking. If Lululemon can make something like that happen, it could be in a good spot. Until then, though, it's not clear that the fall is finished. While a 30% discount may have sounded good at the beginning of the year, it now looks as if Lululemon is still overpriced.

Andrew Marder has no position in any stocks mentioned. The Motley Fool recommends Apple, lululemon athletica, Nike, and Under Armour and owns shares of Apple, Nike, and Under Armour. 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.