Lululemon’s CEO, Calvin McDonald, updated investors about how the athletic wear company is tackling its 'newness' problem - the challenge of consistently inspiring customers to buy due to its product mix. He talked about the introduction of new product lines such as men's shorts, women's trousers, and yoga wear during the latest earnings conference call. "We have increased our level of newness on par with the past and expect our robust pipeline of innovation to meet the demands of our clientele," McDonald noted.
However, despite the positive update, Lululemon's shares fell by more than 3% on Friday, with a 25% decline year-to-date. McDonald attributed the slump to a more cautious consumer behavior stemming from inflation and economic uncertainty. Despite these challenges, many Wall Street analysts remain optimistic about Lululemon's future with an average price target of near $400 according to Visible Alpha data.
"We will control what we can control, focusing on delivering the high level of newness and product innovations our guests expect from Lululemon," McDonald concluded.