Core Insights - Lululemon is facing challenges as its growth stalls, with a reported 5% dip in comparable sales in the Americas and a 3% net revenue decline in the US [3] - Elliott Investment Management has acquired a $1 billion stake in Lululemon and is expected to play an active role in the company's leadership transition following CEO Calvin McDonald's announcement to step down [2][7] - The brand is perceived to be losing its premium image due to increased discounting and a shift in product offerings, which has raised concerns among analysts and the company's founder [4][5] Company Performance - Lululemon's annual revenue has tripled to approximately $11 billion since 2018, but recent performance indicates a slowdown in growth, particularly in the domestic market [3] - The company's shares have declined roughly 40% year-to-date, despite a rebound following the announcement of McDonald's departure [7] Competitive Landscape - Lululemon faces competition from smaller brands like Vouri and Alo Yoga, as well as larger retailers such as Nike and Gap's Athleta, which are posing threats to its market position [3] - The company's strategy and product offerings are under scrutiny, with concerns that the focus on finance may detract from product quality and brand identity [4][5] Leadership Changes - Elliott Investment Management is reportedly in discussions with Jane Nielsen, former CFO and COO of Ralph Lauren, as a potential candidate for Lululemon's CEO position [7] - The firm has a history of influencing leadership changes in consumer brands, as seen with its previous involvement in Starbucks and PepsiCo [5]

The athleisure brand’s estranged founder, Chip Wilson, is telling anyone who will listen how the current leadership is messing up. https://t.co/pOP7RiEN3z ...

Company Performance & Challenges - Lululemon's shares are down 65% from their all-time high [2][9] - The company is on pace for its worst year since 2008 [3] - Chip Wilson suggests Lululemon has lost its soul and visionary direction [5] Strategic Recommendations - Wilson suggests putting product and brand back at the center [1] - Wilson advocates for bringing entrepreneurial ownership back onto the board [1] - Wilson recommends empowering creative leadership over merchants [1] - The company should stop chasing Wall Street at the expense of customers and recommit to the muse [2] Competitive Landscape - Lululemon faces increased competition from established players like Nike and upstarts like Alo [5] - The athleisure category, once new and burgeoning, is now highly competitive [4] Board Composition - Three current board members overlapped with founder Chip Wilson [7] - Six of the ten board members have experience in retail or consumer packaged goods (CPG) [7] - Two of the ten board members are founders of their own companies [7]

Core Insights - Investors are encouraged to consider stocks like Deckers Outdoor, O'Reilly Automotive, and Lululemon Athletica due to their high return on invested capital (ROIC) in the competitive retail sector [1][3] Group 1: Return on Invested Capital (ROIC) - ROIC is a critical metric in the retail sector, indicating how much operating profit a company generates from every dollar invested [2] - The median ROIC for retail stocks tracked by Citi Research is 17.6%, with Deckers leading at 53%, followed by O'Reilly Automotive at 45% and Lululemon at 45% [3] Group 2: Stock Performance and Market Trends - Shares of Lululemon and Deckers have underperformed the broader market in 2025, both down approximately 50% year-to-date, while the S&P 500 has increased around 14% [4] - Analysts predict a flat profit year for Deckers ending March 2026, but expect around 10% growth in the following fiscal year, with a 25% upside implied by average sell-side analyst price targets [5] Group 3: Brand Performance - Hoka, a brand under Deckers, is noted as one of the fastest-growing in the athletic space, although there are concerns about potential growth slowdown in fiscal year 2026 [6] - O'Reilly Automotive is experiencing significant success, with shares up over 32% due to delayed new car purchases, benefiting from its efficient supply chain despite its stock being valued at nearly 33 times forward earnings, the highest in a decade [7]

In a sponsor category long dominated by two giants, the athleisure maker joins a wave of challengers tempting star players with opportunities for creative input—and lucrative financial terms. https://t.co/k1U1XuOEod (Photo: Vuori) https://t.co/B8FWSHYGxv https://t.co/TJG76G4gU6 ...

What is going wrong for the king of athleisure? https://t.co/XWG6tGhHgM ...

Industry Trends - Athleisure maker joins a wave of challengers in a sponsor category long dominated by two giants [1] - Challengers are tempting star players with opportunities for creative input and lucrative financial terms [1] Company Strategy - Vuori is mentioned as a specific example of an athleisure maker [1]

Industry Trends - Athleisure maker Vuori joins a wave of challengers in a sponsor category traditionally dominated by two giants [1] - These challengers are tempting star players with creative input opportunities [1] - Challengers are also offering lucrative financial terms to attract star players [1]

Industry Trend - The athleisure industry sees challengers tempting star players with creative input and lucrative financial terms [1] - The sponsor category has long been dominated by two giants [1] Company Strategy - Vuori joins a wave of challengers in the athleisure market [1] - Vuori attracts star players with opportunities for creative input and lucrative financial terms [1]

In a sponsor category long dominated by two giants, the athleisure maker joins a wave of challengers tempting star players with opportunities for creative input—and lucrative financial terms. https://t.co/pDKwIcepJQ (Photo: Vuori) https://t.co/nOJzQECAsE ...