Lululemon shares continue their plunge on CEO exit

Lululemon Athletica Inc.'s shares sank again Wednesday following the unexpected announcement that the yoga clothing company's CEO is stepping down.

THE SPARK: Lululemon said late Monday that Christine Day will leave the company as soon as it finds a successor.

THE BIG PICTURE: The news has hammered the company's stock as Day, who served as CEO for more than five years, is considered one of the reasons behind its recent success.

Day didn't elaborate on why she was leaving, but said the time is right. The company has formed a search committee for a new CEO.

"It was a personal decision of mine," Day said in a call with investors Monday. "It's never a perfect time to leave a company that you love."

THE ANALYSIS: A number of analysts downgraded their rating on the company Tuesday and said Day would be difficult to replace and that it creates a hole in leadership at a time when Lululemon can least afford it.

The Canadian company is expanding on an international basis and only recently had to pull some of its popular yoga pants off the shelves for being too sheer. It also follows another high-profile leadership change: Lululemon's founder Chip Wilson, who started the company in 1998, stepped down as chief innovation and branding officer last year. He remains chairman.

SHARE ACTION: During Day's tenure, Lululemon's share price also has increased by more than fivefold. But shares sank $3.56, or 5.2 percent to $64.29 on Wednesday on continued heavy trading volume. That is on top of a 17.5 percent drop in its stock value Tuesday.