Lululemon Athletica inc. (LULU) Challenged by Lawsuits

The press releases from the time in question certainly seem to put a good face on things. The announcement about the issue came on March 18, and then by April 3, the whole thing was sorted out.

On its fourth-quarter conference call and in its earnings release on March 21, the company updated its guidance for the quarter and year, based on a fall in comparable sales. It then met those expectations in the first quarter, for which results were announced last month. On the call, it said that the annual earnings-per-share impact would be around $0.21.

In the end, it seems hard to say that Lululemon Athletica inc. (NASDAQ:LULU) was anything less than clear about the impact of the Luon shortage. While further investigation may show that the lawsuits are well-founded, the public face of the company seems fine to me. I understand investors’ frustration, though. The stock is down 17% year to date, but there should be at least a little bounce once a new CEO is found. The company still seems fundamentally strong, although it needs to figure out its competitive position. For now, I’m still tentatively bullish on Lululemon.

The article Lululemon Challenged by Lawsuits originally appeared on Fool.com and is written by Andrew Marder.

Fool contributor Andrew Marder has no position in any stocks mentioned. The Motley Fool recommends lululemon athletica and Under Armour. The Motley Fool owns shares of Under Armour.

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