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Of all the stumbles by Lululemon Athletica Inc. in the past year or so – and there have been plenty – there is only one that the market can't forgive: It stopped growing.

On Thursday, the yoga-pant retailer's once high-flying shares nosedived to their lowest levels in more than three years after it slashed its full-year earnings forecast. Profits now look certain to shrink for the first time in company history; sales, on a comparable basis, are expected to see percentage growth "in the low single digits," the company said.

Many observers will see this as the final straw in what has become tragic retail theatre – a once-unstoppable stock market darling brought down by its own fatal flaws, from management missteps to product recalls to boardroom infighting to a revolving-door executive suite. (Oh, and don't forget saying that your customers' thick thighs are problematic.)

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But as much as all this bumbling hasn't helped, it isn't what has destroyed value in the stock to less than half of what it was a year ago. Rather, it's a much simpler tale for the market. Lululemon's stock was a growth play (and a spectacular one at that), but the growth phase looks, for practical purposes, to be over.

If any doubt remained in that front, Thursday's still-lower financial forecasts removed much of it. But the market has been gradually ratcheting down the growth potential built into Lululemon's stock price for a couple of years now.

Over the past two years, Lululemon's stock valuation, as measured by the price-to-earnings (P/E) ratio, has moved downward almost in lockstep with the company's annual sales growth. The less the company has grown, the less growth premium its valuation has carried.

Now there's little left, if any. Lululemon's P/E is about 20 times (based both on earnings from the trailing 12 months and on forward 12-month expectations), little different from other specialty apparel retailers. This is priced, for all intents and purposes, as a mature retail play.

That's hardly unreasonable. Since going public in 2007, the company has grown from 52 stores to 263. The low-hanging fruit of untapped markets and premium locations has already been picked; the potential for rapid expansion is a shadow of what it once was. Oh, it will still add new stores, but Lululemon's days of 30- to 50-per-cent annual revenue growth are behind it.

It's a common fate for high-growth stock plays. And for retail companies such as Lululemon that attract a cult-like following for their products, the unavoidable growth slowdown is compounded by a fading of the hype and a rise of competition. Krispy Kreme Doughnuts Inc. lived through it. Crocs Inc. lived through it. Lululemon will have to live through it.

But high growth is intoxicating, and it appears the company's executives won't easily let go. They want to add another 45 stores this year, and are increasingly focusing on expansion in Europe and Asia. They want to expand aggressively into menswear. Company brass talk about 2014 as a "transitional year" – a temporary reloading before the next phase of growth.

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Well, maybe, although the market clearly isn't betting on it. Chasing growth for too long can start to look like a dog chasing its tail: Not only fruitless, but you might bite your own behind. The company may still be finding places to expand, but they are in unfamiliar markets and product lines that present considerable risk. It keeps adding stores, but it is doing so on falling profit margins, return on equity and return on capital. The missteps and boardroom disputes may be symptoms that the infatuation with growth has blurred the operational focus.

Maybe it's time Lululemon move its mindset to where the market already has – that the growth chapter of its story has ended. For its next, more mature phase, the premium will be on getting better, not just bigger.

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