The upscale yoga wear maker Lululemon Athletica lowered its forecast for the quarter as the business continues to struggle with the long lasting effects of a recall and comments that were controversial made by it founder. That in turn has caused the stock price to fall by 15%.
Lululemon has had great pressure put on it since last March after it had to recall some signature black yoga pants that are see-through, which embarrassed the company and caused a problem with sales.
Lululemon based in Vancouver warned in December that lower sales would hit the company’s fourth quarter that ends on February 2.
Several apparel retailers in the U.S. including Zumeiz, Inc and American Eagle lowered forecasts for quarterly sales last week, as reluctant consumers forced the companies to cut prices during the recently ended holiday shopping period.
Lululemon said net revenue was expected to be from $513 million to $518 million during the quarter, which was down from its original forecast of $535 million to $540 million.
The company also forecast its same store sales to drop in the low to mid single digits compared to its forecast earlier of sales remaining flat.
The yoga pants maker said it would earn from 71 cents to 73 cents a share. Earlier the company forecast earnings of 78 cents to 80 cents a share.
Analysts were expecting earnings for the company of 79 cents and revenue of $541.3 million.
The company’s troubles have been compounded due to complaints about poor product quality and comments by Chip Wilson the company’s founder and now outgoing chairman.
Wilson said in November that some of the body shapes of women just did not work for the yoga pants made by Lululemon, which prompted a backlash from its customers.
Last month, the company named Laurent Potdevin as the new CEO. Potdevin is the former president at TOMS Shoes.
Lululemon stock was at $51.60 prior to opening on Monday, after closing on Friday on Nasdaq at $59.60.
The stock has fallen 11% since the product recall took place last March.