NEW YORK (TheStreet) -- Lululemon Athletica(LULU) - Get Report would like nothing more than to regain its shining star status, a time when women viewed the active wear as both hip and accessible. But that was a mood of a different era. 

These days, Lululemon remains a brand in flux, sometimes even flummoxed. So, has the yoga apparel retailer lost its luster, for good?

The Vancouver-based company is trying to stem the bleeding caused by its Luon pants fiasco last year by re-merchandising stores, focusing on international expansion and driving sales through social media as well as in-store technology, CEO Laurent Potdevin noted on today's earnings call, but it sounds like by the time Lulu gets to where it wants to be it may be too late.

"In an athletic apparel market that remains competitive, with new entrants offering merchandise that is equally compelling, we believe it is imperative for lululemon to ensure it is putting its best foot forward in all capacities. After multiple quarters of weak performance, we are increasingly concerned that the brand is permanently damaged at some level," Morningstar analyst Jaime Katz wrote in a note on Thursday. "In our opinion, lululemon's lack of an economic moat has become even more evident over recent quarters, as same-store sales have remained negative and the competition has grabbed share of the lucrative athletic apparel market."

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The women's activewear category is becoming increasingly competitive as the product becomes part of the mainstream. Activewear represents one of the fastest apparel categories in the U.S., Wells Fargo analyst Paul Lejuez wrote in a May 30 note, citing NPD, a consumer research firm. With names like Under Armour (UA) - Get Report, Nike (NKE) - Get Report and retailers like Gap's (GPS) - Get Report Athleta as well as fashion retailers VF Corp(VFC) - Get Report and H&M all seeing opportunity all playing in Lululemon's sandbox (not to mention retailers that sell cheaper merchandise alternatives), it will be especially difficult for the yoga apparel maker to reclaim its reign.

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"They're in a hyper-competitive space that is very fashion forward. [Lululemon] has to be on the pulse of the trend," says David Tawil, co-founder and portfolio manager at Maglan Capital, a hedge fund that focuses on distressed companies. "I think that they have a very good following in terms of older consumers and I think those consumers are much stickier than younger consumers which is a great thing for them. They can flub it for a while and make a bunch of mistakes and not lose their shirts. The question is will they be able to regain that excitement or that devotion of the younger consumer?"

"They need to have high-end and creative marketing, but it must be supported by great ground-breaking product," Tawil adds. "They constantly have to be generating product that is not yet copied -- showing the world what it should be wearing. That's their place. They were the first in so many of their products. Whether they can get those elements together to regain the momentum they had I'm not sure." Tawil does not own or short any shares of Lululemon.

Investors were fleeing from the stock after Lululemon lowered its outlook for the second quarter and fiscal year on Thursday. Lululemon reported first-quarter net income of $18.98 million, or earnings of 13 cents a share. Earnings included a non-recurring adjustment of $30.9 million, or 21 cents a share, from the repatriation of foreign earnings the company is planning as a way to fund a share repurchase program of $450 million that it also announced on Thursday. Excluding the adjustment, earnings were 34 cents a share compared to $47.3 million, or 32 cents a share in the year-earlier quarter.

Lululemon's net revenue rose 11% to $384.6 million compared to a year earlier, surpassing estimates of $381 million. Comparable sales rose 1% in the quarter, fueled by a 25% increase in direct-to-consumer sales. Comparable store sales actually declined 4% in the quarter. Separately, Lululemon's executive management continues to be in transition. CFO John Currie said in a separate announcement that he would retire from the company at the end of its fiscal year.

Why Lululemon Shares Are Tumbling

Can Lululemon's Stock Price Reverse Its Downward Dog?

Citigroup analyst Oliver Chen writes in a note to clients, in which he downgraded the stock to "neutral" from "buy," that while the company's first-quarter comps of 1% growth were better-than-expected due to strong online growth (consensus was calling for a decline), the company's overall comp guidance "implies a hockey stick ramp" for the second half.

"We question if improved core, more seasonal depth, and cohesive marketing is enough to turnaround traffic/conversion issues," Chen writes in a note.

Not to mention that Lululemon's fighting at the board level (founder Chip Wilson fueled a public relations fire Wednesday when he released a statement saying that he did not vote for the re-election of two outside directors, including Lulu's chairman and former Starbucks(SBUX) - Get Report executive Michael Casey) and continued management shake-up is distracting to the company's mission to reclaim its spot at the top.

"The retirement of CFO John Currie and the reduction of both 2Q and 2H guidance, including lower-than-expected sales and margins (particularly vs. easier 2H compares) lowers visibility of medium-term recovery further and raises more questions about product direction/mix and organizational structure to support growth," UBS analyst Roxanne Meyer writes in a research note.

Not all analysts are down on Lululemon. "Competition does matter, but I do believe the brand remains a top player in a fast-growing apparel category. I don't think the boat has passed," Andrew Burns, an analyst D.A. Davidson, writes in an email to TheStreet. Burns has a "buy" rating on Lululemon.

"Even in tough times, LULU generates enviable profit margins," Burns writes in a note. "We are disappointed that reduced guidance and call commentary suggests the turnaround is more of a 2H15/2016 event. This is reflected in our significantly reduced 2015 estimates. While we expect board turmoil and weak near-term fundamentals to weigh on sentiment, we believe the current share price does not reflect long-term brand value or earnings potential. Recovery will take time."

But perhaps the best way to gauge whether Lululemon can make a comeback is just by hitting up Twitter(TWTR) - Get Report, where consumers often share their brand allegiances -- and grievances when a brand isn't hitting the mark.

--Written by Laurie Kulikowski in New York.

Follow @LKulikowski

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