Lululemon Athletica, Inc. CEO Laurent Potdevin has resigned effective immediately, with the yoga wear brand saying the former executive “fell short of … standards of conduct”. LULU has not cited specific examples of Potdevin’s misconduct, but reports indicate the unprofessional behavior (unrelated to corporate finances or operations) was not limited to a single incident; though, no legal settlements have been paid and no criminal charges are pending. Executive Chairman Glenn Murphy will take over Potdevin’s role, until the board decides on a long-term replacement. LULU shares fell 3% (to $75) after hours on Monday.
Howie Long-Short: Potdevin was successful as CEO; helping the company through supply chain issues, growing its men’s business and building a presence within China, so this can’t be considered good news (though founder Chip Wilson may dispute that). Lululemon shares gained 21% in 2017 and have been trading just a few dollars off the all-time high ($81.92). The company did say Potdevin’s absence will not impact its 2018 earnings projections.
Fan Marino: LULU reported its “highest traffic” and “largest sales” ever on Black Friday and Cyber Monday, so January’s news that the company was raising sales forecasts (from mid-single digit to high-single digit growth YOY) for Q4 ’17; wasn’t exactly a surprise. Expectations are the company will post quarterly net revenue between $905-$915 million, equating to 15-16% YOY growth, when 4th quarter results are released on March 27th.