Oppenheimer Maintains Confidence In Lululemon After CEO's Resignation

While the resignation of CEO Laurent Potdevin has caused an investor scare, Lululemon Athletica, Inc. (NASDAQ: LULU) has a “solid bench in place," an Oppenheimer analyst said. 

The Analyst

Analyst Anna Andreeva maintained an Outperform rating on Lululemon with an $88 price target. 

The Thesis

Executive Chairman Glenn Murphy will assume the role of interim CEO while Lululemon formally searches for a permanent replacement, Andreeva said in a Monday note.

Both Lululemon's COO and lead merchandising and design executive will retain their roles, while Celeste Burgoyne, EVP of Americas, will oversee the global consumer-facing business, the analyst said. 

While the abrupt nature of the announcement has put downward pressure on the stock, the rest of the athletic apparel maker's management remains stable, and the company stands to benefit from Murphy’s “solid operational experience," Andreeva said. 

Lululemon management has reiterated its fourth-quarter 2017 guidance and the company's long-term $4-billion sales goal.

Price Action

At the time of publication, Lululemon shares were trading down 0.34 percent at $77.14. 

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