Lululemon (NASDAQ:LULU) shares dropped 11% in after-hours trading Thursday after the company released its 2023 Q4 report and 2024 predictions.
The company reported a 19% increase in year-over-year revenue growth, up $9.6 billion in 2023 including a 12% increase in America.
However, the 2024 forecast painted a more conservative picture, with projected net revenue ranging between $10.700 billion to $10.800 billion, falling short of analyst expectations of $10.9 billion.
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Q3 revenue in America exhibited a 9% uptick compared to the previous year, a decline from the 29% growth recorded in the corresponding quarter of the previous year.
“As you’ve heard from others in our industry, there has been a shift in the U.S. consumer behavior of late and we’re navigating what has been a slower start to the year in this market,” CEO Calvin McDonald said on the company’s earnings call. He also noted that a lack of sizing and color options had led to lower traffic and conversions in the U.S. market.
In addition to evolving market dynamics, Lululemon found itself embroiled in controversy following derogatory remarks by its founder and former CEO, Chip Wilson, regarding the company’s Diversity and Inclusion (DEI) initiatives earlier this year.
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Wilson criticized Lululemon’s approach in an interview with Forbes, stating, “They’re trying to become like the Gap, everything to everybody. And I think the definition of a brand is that you’re not everything to everybody… You’ve got to be clear that you don’t want certain customers coming in.”
This isn’t the first instance of Wilson making disparaging comments targeting consumers. In 2013, he faced backlash for remarks suggesting that “some women’s bodies just actually don’t work,” prompting accusations of fatphobia.
Subsequently, amidst the fallout from his remarks, Wilson stepped down from his position as Chairman.
“I REMAINED CHAIRMAN UNTIL 2013 WHEN I LOST CONTROL OF THE CULTURE AND PRODUCT DEVELOPMENT. AT ODDS WITH A BOARD OF DIRECTORS WHO DID NOT WANT TO INVEST IN THE FUTURE, I DEPARTED IN 2013,” says Wilson on his website.
Since 2013, Lululemon has been committed to enhancing its DEI initiatives and broadening its appeal. This includes establishing a DEI committee with an annual budget of $5 million, bolstering training programs and fostering greater diversity within its workforce.
“Our goal is to reach 40% racially diverse representation for our stores, and 30% racially diverse representation of our directors and assistant store managers and above by 2023. The funding and launch of a global internship and global mentorship programs will support our commitments to attract and retain more diverse talent,” according to Lululemon’s website.
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This article Former Lululemon CEO Slams Current Leadership For DEI Initiatives, ‘Some Women’s Bodies Just Actually Don’t Work…You Don’t Want Certain Customers’ originally appeared on Benzinga.com
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