Lululemon Stock Sinks 6.38% As Chief Product Officer Resigns

Lululemon Athletica ( LULU ) has announced an organizational restructuring, with Chief Product Officer Sun Choe resigning to pursue another opportunity. The company stated that the changes are designed to support the company's growth plans, accelerate product innovation, and enable its go-to-market strategies. Lululemon ( LULU ) will not replace the CPO position. Global Creative Director Jonathan Cheung will drive the product design and innovation roadmap, while continuing to oversee design, innovation, and product development at the firm.

Several analysts have argued that the move is a bad sign for the company, as Lululemon ( LULU ) faces a slowing apparel market and tough competition. Lululemon shares ( LULU ) were down about 7% to $299.95 as of 10:21 a.m. ET Wednesday. The stock was down 4.4% premarket Wednesday after the company announced the departure of its chief product officer and said it would overhaul its product and brand teams.

Lululemon ( LULU ) will now have Jonathan Cheung, global creative director, report directly to Chief Executive Calvin McDonald and oversee product design and innovation. Cheung has more than 30 years of experience in senior leadership roles at global brands. Lululemon will also create a new team of leaders from merchandising and brand functions to manage global and regional go-to-market strategies. Nikki Neuburger will become chief brand and product activation manager to oversee merchandising, footwear, and product operations on top of her current responsibilities. Elizabeth Binder, chief merchandising officer, will report to Neuburger.

Wedbush analyst Tom Nikic believes the selloff seems overdone and is likely due to how well-liked and well-respected Choe was by Wall Street. Lululemon ( LULU ) has been a "notable laggard" in Wedbush's coverage this year, with the stock down 37% and the S&P 500 SPX having gained 12%. Choe's reign saw Lululemon's revenue grow by about 4%.

Technical Outlook
Lulu Lemon ( LULU ) stock is down 6.47% as of the time of writing trading with a Relative Strength Index (RSI) of 20.47 which is oversold. The stock has been on a falling wedge pattern for over 8 weeks now.