Dallas, Texas 05/27/2015 (Financialstrend) – Lululemon Athletica Inc. (NASDAQ:LULU) stock has pulled back in the market from highs of $70 after an impressive showing on the earnings front in the previous quarter. The downward trend continues to be a point of concern to the street as oversold sentiments continue to be rife in the minds of many investors. The stock is currently trading near its pre earnings levels arousing questions whether it will bounce back or the downward trend will continue.
Need For Management Stability
There is a cloud of concern around Lululemon Athletica Inc. (NASDAQ:LULU)’s management team especially on the confirmation that long serving VP of Global Retail Delaney Schweitzer is set to leave the company. It would be a big blow for Lululemon Athletica should current CEO, Laurent Potdevin leave his post in the wake of the former CEO, Christine Day, leaving last year, unexpected.
Lululemon Athletica Inc. (NASDAQ:LULU) has enjoyed a form of stability ever since Potdevin took the reins, seen by a 51% growth in comparable store sales as men and women segments continue to register impressive sales. The management shakeup has so far worked to Lululemon Athletica advantage as a string of new strategies has seen higher margin direct-to-consumer business continue to grow thanks to e-commerce platforms.
Online Sales Concerns
However, sales online have been decelerating something that Lululemon Athletica Inc. (NASDAQ:LULU) will have to address as attention shifts to bringing more brick and mortar stores online. Last year alone the company unveiled 13 new stores and indication that the company remains confident of its long term prospects on brick and mortar sales.
Product margins are expected to remain flat this year while gross margins may face headwinds from currency fluctuations in key markets. A conservative guidance for the year is also closely being watched especially on ongoing concerns that e-commerce sales might not be as strong as they ought to be.
