Roxanne Meyer, UBS analyst, explains how a recall at Lululemon has lowered the company's first quarter revenue forecast.
By Lisa Flam, TODAY contributor
Well, that could have been embarrassing.
Rather than allow women to leave too little to the imagination, Lululemon Athletica pulled some of its popular black yoga pants from its stores and website last weekend.
Although the materials used in the pants were the same, the coverage was not, ?resulting in a level of sheerness in some of our women?s black luon bottoms that fall short of our very high standards,? Lululemon said in a news release on its website.
The pants taken out of circulation make up about 17 percent of all women?s bottoms in the popular chain?s store, and will cause a near-term shortage of some styles of pants, the company said.
The Canadian company said the affected pants, which arrived in stores on March 1, can be?returned or exchanged.
The cause of the sub-standard pants seems to be unknown, but the company said it is not due to changing manufacturers or the quality of its materials.
Lululemon said it is working with its manufacturer to find out what happened when the fabric was made, and is trying to get replacement fabric and products as soon as it can. Luon, made in Vietnam and Taiwan, is made of nylon and Lycra Spandex.
The recall has may prove costly.
It led the company to cut its first-quarter revenue projection to between $333 million and $343 million, down from its prior guidance, which was for $350 million to $355 million. Shares of Lulumon were down about 5 percent in early trading on Tuesday.
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