lululemon's Prospects Turn Sour

lululemon athletica (LULU) makes this business real hard. Christine Day's resignation from lululemon makes it downright impossible. If you don't know Day, she's the CEO who built lululemon into a $10 billion powerhouse of apparel. Last night, inexplicably, she quit the firm, and anyone who follows the company is reeling from her decision. Hence, the stock is down 13 points from Monday's close.

First, it's never easy to own a company that sells at 40x earnings, even a company as strong as lululemon, a business which has gone from yoga cult apparel to mainstream sports clothing that's strong enough to challenge anyone, including Nike (NKE), in its category. For years now I have been hearing that lululemon has peaked, that its valuation is too stretched and that it's got serious competition, including Athletica, which is owned by Gap (GPS), and that Athletica can step on lululemon like you or I could step on an ant....577 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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