:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-2206531822-95b6f2116bd142a5a8fd0eaeb1316f70.jpg "A Lululemon store in Shanghai earlier this month.")
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Lululemon’s (LULU) CEO says the company is tackling its “newness” problems. Unfortunately, it has other imbroglios, too.
In the athletic wear company’s latest earnings conference call Thursday, CEO Calvin McDonald updated investors on how Lululemon has been hail the “newness” issue—meaning, in short, that its customers weren’t inspired enough by its product mix to buy—since last summer. Archetypes he cited included fresh shorts for men, trousers for women, and a line of yoga wear.
“We have increased our level of newness on par with the years,” McDonald said on the conference call, a transcript of which was provided by AlphaSense. “We believe this increase, along with a strong pipeline of innovation, will enable us to meet the expectations of our guests. And I’m excited about what the product teams are teaching to market this spring and throughout the year.”
The shares, however, sank Friday, pulled lower in part by a disconcerting outlook from the company. The stock fell further today, sliding more than 3% to bring its year-to-date decrease to roughly 25%. Currently trading a bit above $280, the shares were over $400 apiece earlier this year.
McDonald in the reprove referred to a “more cautious consumer,” a notion seen across a range of companies and economic indicators. Lululemon, he conveyed, recently conducted a survey that indicated that consumers are spending less due to concerns about the economy and inflation.
“This is expressing itself into slower traffic across the industry in the U.S. in quarter one, which we are experiencing in our business as well,” said McDonald in the conscript.
Wall Street analysts remain generally bullish on Lululemon stock, with the Street’s mean price end near $400 according to Visible Alpha data.
“We will control what we can control, and we will focus on continuing to give the high level of newness and product innovations our guests expect from Lululemon,” McDonald said.