This article is from the Globe and Mail Lululemon Stretches to Balance Expansion Against Profit by Marina Strauss
Lululemon’s chief executive officer is betting that pumping up the company’s investments in testing new product lines such as swimwear while building up inventories of its core yoga products will pay off in the long run.But the cost of ramping up her strategy is dampening the company’s 2012 outlook, which on Thursday fell short of analysts’ targets and prompted the stock to tumble nearly 9 per cent. Investors were unnerved by the company’s fast-rising stockpiles of clothing.
“These are things that will compress our margins in the short term, but we also can translate some of those [lessons] to other product lines,” she said. “It’s the right thing as a market leader to continue to innovate.”
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