lululemon(US:LULU) Xin Lang Cai Jing·2025-12-31 11:11Core Viewpoint - Lululemon is facing significant challenges, including declining performance and internal management issues, as founder Chip Wilson calls for a board reform to restore the brand's focus on creativity and innovation [1][2][11]. Financial Performance - In the third quarter of fiscal year 2025, Lululemon's net profit decreased by approximately 12.8%, and the stock price has seen a maximum decline of over 52% within the year [1][10]. - The Americas market revenue fell by 2% to $1.7 billion, accounting for 68% of total revenue, while the overall market capitalization has evaporated by about $25 billion [2][11]. Market Dynamics - Despite a 46% year-on-year growth in net revenue from the Chinese market in the third quarter of fiscal year 2025, concerns are rising as the customer base appears to be shifting away from Lululemon [1][15]. - The competitive landscape has intensified with the emergence of new brands like Alo and Vuori, leading to a loss of Lululemon's customer base [2][11]. Management Critique - Chip Wilson has publicly criticized the current management for prioritizing short-term financial performance over long-term strategic vision, leading to a dilution of the brand's identity [4][13]. - The management's focus on operational efficiency has reportedly stifled product innovation, with Wilson highlighting a trend towards "GAP-ification" where creativity is sacrificed for commercial success [4][13]. Consumer Sentiment - Long-time consumers express dissatisfaction with the declining quality and lack of innovation in Lululemon's products, noting that recent offerings do not meet the standards of earlier designs [8][18]. - Many customers feel that the brand has lost its original appeal and identity, with a shift towards mass-market strategies that dilute its unique positioning [9][18].