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Despite a strong second quarter, Lululemon’s same-store sales are still expected to decline.Fred Lum/The Globe and Mail

Lululemon Athletica Inc. is feeling the heat from quick-footed sparring rivals in the "athleisure" market.

Take for example Under Armour Inc.'s expensive new marketing blitz aimed at women, which includes a video of supermodel Gisele Bündchen showing off her kickboxing skills. It's a direct jab at Vancouver-based Lululemon just as the company tries to get back on its feet after last year's public relations disaster over too-sheer black yoga pants and founder Chip Wilson's live-TV gaffe about women's thighs rubbing together.

The boardroom fracas at Lululemon in the wake of the upheaval appears to have been settled and the new management team under Laurent Potdevin – including chief product officer Tara Poseley – looks to be making the right moves.

However, there is still a bit of work left before Lululemon can once again punch above its weight, according to some analysts and observers looking ahead to the company's second-quarter earnings that come out Thursday.

"Are the people in place to take Lululemon to the next level?," said Luke Sklar of retail consultants Sklar Wilton & Associates. "I would look for clarity and purpose from the executive team."

Analyst Jim Duffy of Stifel Nicolaus & Co. said in a recent note that some merchandising strategies seem to be shaping up. "The key question remains, is this enough to offset softer demand for core styles in older stores, building competitive pressure, and indications of increased promotion," he said. "With this question unanswered, the bear case for earnings compression remains very much alive."

The potential influence U.S. private equity firm Advent International, with which Mr. Wilson has teamed up, will have on Lululemon's board is one issue Mr. Duffy would like to see raised on during the conference call Thursday to discuss the second-quarter results. Also, an update on how the search for a new chief financial officer is going and when an announcement might be forthcoming, he said.

Sharon Zakfia at William Blair & Co. said in a note that a strong push in the second quarter helped bolster sales somewhat after a weaker-than-expected start, although probably not sufficient to beat company guidance for continued same-store sales declines. Ms. Zafkia has a 30-cent (U.S.) earnings-per-share target for the second quarter, while Mr. Duffy is looking for 29 cents. The analysts' consensus estimate is 29 cents.