Fans of the Lululemon Athletica Inc. brand probably love the “we made too much” section around the company’s web site since it provides a number of products (some that should probably have never been made) at healthy discounts.
Investors, however, don’t like to see that type of thing whatsoever, which is why these were concerned with a report on Monday suggesting?the Vancouver-based apparel maker has inventory problems that may be the result of more than just the elements.
After all, Lululemon continues to be trying to shed its reputation for not managing inventories properly in previous years, an element that particularly hurt the stock in 2014.
The stock was down 3.1% Monday to shut at US$63.71 on the Nasdaq after Canaccord Genuity analysts revealed numerous store checks that uncovered \”[wear]house sale\” and \”spring cleaning\” events across many regions in the U.S. this past weekend.
Product discounts ranged from 20% to 50%, with slow-to-sell winter gear to be the focus of the sales.
Analyst Camilo Lyon?believes weather probably played a role in the traffic slowdown and subsequent inventory buildup because so many of the stores offering sales were in the Midwest and Northeast, but also, he found participating stores in southern places such as Austin, Tex., San Francisco, Raleigh, N.C., and Huntsville, Ala.