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Takeaway: Lululemon shares are tanking. Hedgeye's Brian McGough nailed it.

Got process? Brian McGough does.

Hedgeye’s Retail Guru-In-Chief held a jam-packed conference call this past Friday outlining his concerns and bearish thesis for Lululemon.  Here’s one key chart among three or four dozen from his deck.

(Ping sales@hedgeye.com for more information.)

McGough Nails $LULU Short - lulu0

Fast forward to this morning.


Lululemon is getting crushed down 18%. Cutting your forecast, lingering effects of an embarrassing recall and controversial comments by its founder will do that to you.

According to McGough, this is a top line issue for LULU. To be fair, it’s in line with what myriad retailers have said over the past week. On the flip side however, he says LULU has always been immune to any kind of Macro fluctuations.

The point here? The competitive landscape has gotten so fierce, and its sales productivity has gotten so high, that Lululemon needs to fundamentally change how it operates the business.

Finally, McGough mentions that the company is set to present tomorrow down in Orlando at ICR. But their new CEO won’t be there – at least that’s the plan.


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