Lululemon's chief product officer is departing
The shares of Lululemon Athletica Inc (NASDAQ:LULU) are down 7.2% to trade at $299.86, and earlier hit a 52-week low of $298.64, after the resignation of the athletic retailer's chief product officer. The company will not replace the role, instead creating a new team comprised of merchandising and brand functions leaders.
The news came as a surprise, and sparked warning bells amongst analysts. Jefferies noted the adjustments could suggest weaker top-line results over next few quarters. Wedbush slashed its price target to $397 from $492, while UBS trimmed its target to $385 from $475.
LULU is now down 41.3% year-to-date. The shares are heading for a sixth-straight loss, the worst losing streak in exactly one year. During this drawdown, short interest has declined 14.7% over the last month, yet the shares have failed to capitalize, highlighting the underlying technical weakness. Should the stock slink even lower, don't be surprised if more bear notes come in, considering only two of the 26 brokerages covering LULU have "sell" or worse ratings.
Over in the options pits, 24,000 calls and 23,000 puts have exchanged hands so far today -- 2.3 times the average daily options volume already. The weekly 5/24 290 and 300-strike puts are the most popular, with new positions opening at both.