Lululemon Positioned for Rebound with CEO Change and Share Repurchase

18 days ago

Thomas Hughes

"the first one is Lululemon. They struggled uh for some domestic sales. They had some margin impacts tied to tariffs, but they seem to have turned a corner late in the year. So, that string of earlier downgrades kind of ended with the calendar Q3 report, which included some outperformance and had some other good news. They decided to change the CEO, which should help reinvigorate the business, get some fresh blood into there, and uh they're focusing on international expansion. International expansion is huge because international markets are much larger than domestic markets and over time it could more than double the business. They announced a very large share repurchase authorization. They increase their authorization, I think, by a billion. They've got about 1.5 billion left, which just ensures that they'll have a nice aggressive uh share reduction pace in the coming year, which provides investors with a lot of leverage."

Lululemon faced domestic sales challenges and tariff-related margin pressures earlier in the year but has shown signs of recovery after a Q3 turnaround. A CEO change, focus on international expansion, and an increased share repurchase authorization signal a bullish rebound, positioning the stock to gain momentum once key technical levels are surpassed.

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