Lululemon Athletica Inc.

On March 21, 2024, after the market closed, the Company issued a press release announcing its financial results for the fourth quarter and full year ended January 28, 2024, revealing the Company’s growth was stagnating in the Americas region. Specifically, net revenue in the Americas grew 9% in the quarter and 12% in the fiscal year 2023, short of the 29% growth in the year-ago period and 12% growth in the previous quarter. On this news, the Company’s share price fell $75.65, or 15.80%, to close at $403.19 per share on March 22, 2024, on unusually heavy trading volume.

Then, on July 24, 2024, Bloomberg reported that several analysts posited Lululemon’s inventory allocation seemed inconsistent, particularly as to the Breezethrough legging launched earlier that month, both in-store and online.  On this news, the Company’s stock price fell $9.31, or 3.3%, to close at $272.06 per share on July 24, 2024, on unusually heavy trading volume.

Then, on July 25, 2024, before the market opened, Bloomberg reported that a Lululemon spokesperson told the agency that the Company “made the decision to pause on sales [of the Breezethrough yoga wear] for now to make any adjustments necessary to deliver the best possible product experience.” On this news, the Company’s share price fell $24.74, or 9.09%, to close at $247.32 per share on July 25, 2024, on unusually heavy trading volume.

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the Company was struggling with inventory allocation issues and color palette execution issues; (2) that, as a result, the Company’s Breezethrough product launch underperformed; (3) that, as a result of the foregoing, the Company was experiencing stagnating sales in the Americas region;  and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.