Lululemon Sinks 17% as New CEO Inherits a Turnaround Going Wrong

Lululemon stock dropped 17% during the September 4 session after the company slashed its guidance and told investors that efforts to fix its business so far haven't worked. The apparel retailer, known for premium yoga wear, said it now expects continued weakness rather than the recovery it had previously signaled to Wall Street. The timing complicates things for incoming CEO Heidi O'Neill, who takes the top job facing a business that is worse off than the company itself believed months ago. Investors had been waiting to see whether prior turnaround steps were gaining traction; the guidance cut suggests they were not. What remains unclear is how much of the weakness is demand-driven versus execution-driven, and whether O'Neill will get a chance to reset targets again or inherits the current guidance as her baseline.