The day after yogawear giant Lululemon Athletica Inc. (Nasdaq:LULU; TSX:LLL) announced changes to its management team, including the departure of its chief products officer Sheree Waterson, the company is suffering from a downgrade from an RBC Capital Markets analyst.
Howard Tubin downgraded the company, which is still reeling from its admission that its latest black luon pants were so sheer they were see-through, to "sector perform" from "outperform."
Tubin wrote in a note to clients that "it is Ms. Waterson's departure that is the impetus for our downgrade."
He believes that Waterson's departure brings a "new level of uncertainty to the Lululemon story" as he doubts that the company will be able to soon find a successor who is as capable as Waterson is.
"We prefer to move to the sidelines with our rating until we have better visibility on future product direction."
Other analysts maintained their strong ratings of the company, and despite the news, Lululemon shares in Canada edged up $1.12 to $66.38 on April 4.
