Lululemon’s product chief departure adds to ‘wall of worry’

Lululemon Athletica Inc.’s shares fell as much as 7% Wednesday after the company said its chief product officer was leaving, raising concerns among analysts that the athleisure brand is losing its edge.

Sun Choe won’t be replaced. As part of a bigger organizational reorganization, Choe’s responsibilities for product design will move over to Jonathan Cheung, the company’s global creative director, Lululemon said in a statement.

The exit of Choe adds to the “wall of worry” in the near term, Raymond James analyst Rick Patel wrote in a note.

Other analysts viewed the departure as a sign foreshadowing further sales weakness. Barclays analyst Adrienne Yih said the resignation was an “incrementally negative data point,” signaling that changes in the company’s current assortment to lure more customers could “take longer to course​-​correct than initially thought.”

Lululemon’s stock had fallen 37% this year through Tuesday’s close, while the S&P 500 Index was up 12%. If Wednesday’s decline holds, it will be the sixth consecutive daily drop for the shares.

Some of the company’s most popular products, including its belt bag, are starting to lose their popularity, while competition has increased as other fashion retailers add more athletic apparel to their mix. Lululemon has also struggled to get its inventory under control, which has dented profits.

When the company reports first-quarter earnings on June 5, analysts are expecting it to report a 6.6% increase in comparable-store sales, a rare single-digit sales increase for Lululemon.