On June 22, lululemon athletica declined 5.03% in regular trading, trading at $106.22 per share with turnover of $164 million. The selloff was triggered by a convergence of negative catalysts including repeated marketing controversies in the Chinese market and a significant analyst downgrade.

On the news front, Rothschild & Co Redburn slashed its target price from $160 to $110 while maintaining a sell rating. The downgrade comes amid a turbulent period for the brand in China — its second-largest growth market. On June 16, lululemon issued a public apology after its Great Wall yoga event on May 30 drew widespread backlash for featuring drums closely resembling Japanese taiko in a performance by brand ambassador Zhu Yilong, which was perceived as culturally insensitive on a Chinese national landmark. Days later on June 20, the brand faced additional criticism after organizing a 1,300-person outdoor yoga event in Shanghai without contingency plans for severe weather, forcing participants to practice in a rainstorm.

Financially, the company reported Q1 net income down 38.1% year-over-year, with North America posting consecutive quarters of negative growth and China market growth guidance narrowed from 29% to approximately 20%. Analysts polled by FactSet maintain a consensus hold rating with a mean target of $127.57.

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