The Canadian yoga pants retailer issued a weak forecast for the current quarter and vowed to add more colorful merchandise to its lineup. Fred Katayama reports.
Lululemon shareholders must be sweating. Shares plunged at the market open Thursday after the yoga pants retailer issued a weak forecast for the current quarter. It sees existing store sales dropping. It said its spring assortment lacked color and depth, and CEO Laurent Potdevin vowed to correct that by adding more color to the lineup as early as next week. Quarterly profit and sales actually rose, but the earnings fell short of expectations. A stronger-than-expected rise in the Canadian dollar also hurt profit at the Canadian leisure apparel retailer. In addition, Cowen senior analyst Oliver Chen said soft store traffic hurt results, but added, "We are confident that management has the capabilities and has executed on fixing both problems, merchandise and visual." Lulemon's stock was once a darling among investors, but it has been hit hard by quality and supply chain problems, boardroom upheaval, and stiff competition as companies like UnderArmour and Nike entered the yoga clothing market.