This article first appeared on GuruFocus.
Lululemon Athletica Inc.'s (LULU, Financials) new CEO is entering one of the most challenging moments in the recent history of the organization.Heidi O'Neill formally acquired the top job Tuesday, pushing shares up roughly 2%. But the modest uptick really doesn't change the big picture.Lululemon stock is down around 52% this year, and about 76% in the past five years, as investors have become more concerned about slowing growth. O'Neill, a former Nike executive, has inherited issues on several fronts.Sales have slowed in major areas like the U.S. and China. Product blunders have also harmed demand, as competition has heated up from established athletic brands and newer challengers.Tariffs represent another wrinkle as Lululemon manufactures the vast majority of its clothes in Asia. The leadership shift comes after a public fight with the company's founder Chip Wilson, who had called for major changes to the company's board and management.Since then Wilson has decided to stand aside and give O'Neill time to try and turn things around. That leaves considerable wiggle area for the next CEO. Not a lot.Investors will want to see evidence Lululemon can stabilize sales, accelerate product momentum and maintain profitability in the face of increasing import costs.Whether O'Neill can halt the slide before trying to go back into growth will be evident in the next few quarters.