Lululemon Athletica Inc. is scheduled for removal from the Nasdaq 100 Index. This action is part of the benchmark’s annual reconstitution process.
The removal follows a challenging year for the company. Lululemon has faced uneven performance in its U.S. business. Furthermore, the company recently announced significant leadership changes, including the departure of its CEO.
While the index removal does not directly affect Lululemon’s core business operations, it influences stock demand. The change compels index-tracking funds to sell their current positions in the company.
This required selling creates potential downward pressure on the stock price as funds rebalance their portfolios to match the new index composition.