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• CNBC’s Jim Cramer said Lululemon’s more than 80% plunge from its record high still isn’t enough to make the struggling athleisure retailer’s stock a buy.
• He wants to see evidence that new CEO Heidi O’Neill can stabilize sales, revive international growth and improve Lululemon’s competitive position before recommending the stock.

CNBC’s Jim Cramer said Thursday Lululemon’s plunge still isn’t enough to make the struggling athleisure retailer’s stock a buy. “I think it’s too risky to short this one, but I wouldn’t be a buyer, either,” the ” Mad Money ” host said. “I haven’t seen anything to make me feel better about the competitive environment. The athleisure category remains in the doghouse, and the competition is as crowded as ever.” Shares of Lululemon have fallen below $100 for the first time in more than eight years following another disappointing quarter last week . The stock is down more than 50% this year and more than 80% from its December 2023 record high. Even at just over 10 times the midpoint of its lowered full-year earnings forecast, Cramer said the stock isn’t attractive enough given the continued deterioration in the business. Comparable sales fell 9% last quarter, nearly twice the decline Wall Street expected. Even more concerning, he said, was the weakness internationally, which had previously helped offset struggles. Mainland China comps fell 2%, compared with expectations for a 14.5% increase. The outlook offered little reassurance for Cramer. Lululemon forecast third-quarter revenue to fall 10% to 11% from a year earlier and projected earnings of 93 cents to 98 cents per share, well below the $2.40 Wall Street expected. The company also slashed its full-year sales and earnings forecasts. The results reinforced Cramer’s concerns about intense competition from brands such as Alo Yoga and Vuori, as well as shifting fashion trends that have made Lululemon’s premium pricing harder to defend. He said one potential catalyst is new CEO Heidi O’Neill , who officially took over Tuesday. Lululemon had been operating under interim co-CEOs since Calvin McDonald stepped down at the end of January, which Cramer said created a leadership vacuum that contributed to strategic missteps at a critical time for the brand. Cramer said last week’s ugly outlook could therefore represent a “kitchen sink quarter,” with the outgoing leadership team resetting expectations before O’Neill begins trying to turn the business around. With low expectations and the stock already beaten down, even modest signs of improvement could spark a significant rebound. But he wants evidence that Lululemon can stabilize sales, regain momentum overseas and better compete in the crowded athleisure market before recommending the stock. “Listen, I have no ill will towards Lululemon,” he said. “But it’s my job to look out for you, the viewers, and the bottom line? For the time being, I can’t give them a good reason to buy Lululemon, other than the ‘kitchen sink’ thesis and the fact that the stock now appears to have a low price-to-earnings multiple.” “That’s not good enough, though, so for now, let’s just say this stock is bleeding out in no man’s land,” Cramer added. “Don’t try to be a hero and buy it.” Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market. Disclaimer Questions for Cramer? Call Cramer: 1-800-743-CNBC Want to take a deep dive into Cramer’s world? Hit him up! Mad Money Twitter – Jim Cramer Twitter – Facebook – Instagram Questions, comments, suggestions for the “Mad Money” website? madcap@cnbc.com