00:00 Speaker A
Let’s get your your reaction response to those results, Dave. What do you think?
00:03 Dave
Yeah, it looks like the numbers were better than expected, which is nothing unusual for Lulum and the company almost always seems to beat guidance even in quarters that aren’t very good like this past one. So that’s really not that surprising. I think the stock’s reaction is to the guidance. Uh, the guidance for 2026 uh was a little bit below uh what I expected. Um, I think I was about $12.90 in EPS.
00:30 Dave
Uh but uh, you know, Lu Lemon again has a has a history of guiding low. So I don’t know that I would really see that as all that negative because it’s really not that different than what people expected. Um people probably hoped that Lu Lemon would come out with higher guidance and uh to give something to cheer about, but at this point with the CEO search going on and all this uncertainty and it’s still very early in the year, it makes sense for Lu Lemon to not be too aggressive in its outlook.
01:03 Speaker A
You mentioned the founder Chip Wilson, um and and this campaign against the company’s board. He criticized the current management’s willingness to invest, um rely on heavy discounting. What what did you make of that?
01:21 Dave
He has a lot of opinions which he’s been sharing on an unsolicited basis for years about uh Lulu Lemon’s uh progress. One thing to remember is that Lu Lemon had its best years uh after he left the company, uh which he kind of always seems to ignore. Um, you know, I do think that it’s there are reasons to criticize Lulu Lemon. The company has struggled over the last couple years, especially with growth in the United States.
01:50 Dave
Uh there’s a reason why, you know, the CEO change is being made. So it’s it’s not any big surprise to people that, you know, there are some problems. I think a lot of the issues have been with product development at at Lulu Lemon, it hasn’t been as good as it as it was in the past. And the industry itself has also become much more competitive, which is something that that Chip Wilson sort of ignores. This is not the sportswear market that it was 10 years ago. It’s a lot, it’s a lot more crowded now and also Lu is a much bigger company than it used to be. So it’s a lot harder for the company to generate growth.