Laurent Potdevin being ousted from CEO role is so bullish for LULU -- so so bullish. My concern had been that to get him out of the C-Suite, we’d need to see a series of misses. Given his conduct – whatever that means – Glen Murphy got rid of him without an earnings ding. Reiterated the quarter. This is a gift if you own this stock, and though it will be down on the announcement, it’s more of a gift to get involved. Stefan Larsen is the obvious new CEO (he’s a stud and worked for Murphy at GPS), but I’d argue that anyone Murphy chooses will be a meaningful step up from the softball team that ran the show until about 20 min ago. Estimates for LULU are 15-20% too low next year based on my model. With the right team in place, the concept of $4.00 in EPS power can enter the debate – instead of $2.25-$2.75 in perpetuity. Though the circumstances are unfortunate, I’m loving this stock on this event.
Takeaway: Circumstances aside, getting rid of Potdevin WITHOUT an earnings miss is a best-case scenario. I'm loving the stock on this event.
