4. Lulu's Lemon
Downward doggone it, Christine Day! What in the name of Namaste were you thinking?
Lululemon Athletica (LULU) plunged more than 15% Tuesday following its surprise announcement that its CEO is stepping down after five years on the job. The company disclosed the news about Day's departure in conjunction with its Street-beating first-quarter earnings results in which net income rose 1.5% to $47.3 million, or 32 cents a share, from a year earlier.
About a half-dozen analysts cut their price targets on Lulu stock, and at least two downgraded the equity in the aftermath of Day's "personal decision"."Plans have been laid for the next five years and a vision set for the next 10. Now is the right time to bring in a CEO who will drive the next phase of lululemon's development and growth," Day said in the company's earnings release. "I will continue to actively lead the organization while the board searches for a new CEO, and will work to ensure a smooth transition." Real smooth sailing so far, Christine! Traders are smacking your stock. Analysts are scrambling to figure out if you were pushed out by the board over your handling of the black pants recall in March. And everybody else is wondering why on earth you are taking your mat and leaving the ashram when, despite some increased competition in the category, things look fairly copacetic at the company, at least from the outside. Seriously, if this sudden jolt is the start of Lulu's new 10-year plan, we better get neck-braces for fear of whiplash.
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