Lululemon's (NASDAQ:LULU) decline continues as profits drop and inventory increases, painting a bleak picture for the athleisure chain's fiscal year.
The company reported a decline in profits for the quarter and a 56 percent increase in inventory compared to a year ago. The retailer is taking steps to reduce inventory and control costs, which means more markdowns during the fourth quarter.
Lululemon opened a new flagship in New York City in November showcasing new brick-and-mortar programs for the brand. There's also a strong focus on menswear—and a 31 percent comparable store increase in the category for the third quarter—as well as big investments in the chain's digital strategy.
"Our teams have completed some great work in the first half of the year, and with a culture grounded in innovation, we are relentlessly striving to create a better experience for our guests," said CEO Laurent Potdevin. "We are amplifying our voice and we are building our collective around the world. We have a robust pipeline of new product, and the right team in place to execute on our strategic goals—with key initiatives that cut across product, brand and guest experience."
Lululemon has been trying to revamp its image ever since the 2013 recall of yoga pants found to be too transparent.
Lululemon flagship features concierge, event space
Lululemon makes big changes to keep brand fresh
Menswear, e-commerce lift Lululemon 10%
Lululemon gets boost from new products
Walgreens digital VP joins Lululemon