Lululemon promised a flurry of new styles following the failure of its “Breath Through” leggings, but a flurry of embarrassing reviews led the pricey athleisure maker to pull the leggings from stores.
The Vancouver, Canada-based company pulled a new $98 pair of leggings in July after shoppers criticized the tights' V-shaped back seam as “unflattering.”
Some people also found that the seam at the top of the waistband dug into their hips.
“It really pains me that these pants make everyone look awful,” a Reddit user said in a post a month ago that linked to a thread of BreezeThru leggings reviews.
Lululemon, which has been buoyed by strong sales since the pandemic despite not necessarily catering to teenagers, reported a rare missed profit on Thursday and cut its full-year forecast.
The company's shares fell 3.3% on Friday.
The company is now trying to come up with a new look to win back disappointed customers.
“We are rapidly developing additional styles in performance, shorts, tops and tracksuits as we look toward 2025,” CEO Calvin McDonald said in a conference call after the earnings release on Thursday. “We are optimistic that we will begin to see the results of these strategies in the coming quarters.”
The company reported second-quarter same-store sales increased 2 percent, below expectations of a 6 percent increase.
The weaker-than-expected result was due to a 3% drop in sales in the Americas.
The company said sales in its North American division were disappointing because of delayed release of new spring styles and colors and limited size availability.
The company lowered its sales and profit forecasts as demand for its expensive training equipment began to slow.
“With Lulu, when there's been some missteps, they've dealt with it well and they've dealt with it pretty quickly,” said Jessica Ramirez, an analyst at Jane Hari & Associates.
“They now have a fast lane and they're saying they're going to bring in new stuff,” she said. “The reassurance that that fast lane is there gave investors even more peace of mind today.”
She said the company is good at acknowledging past mistakes.
Last quarter, McDonald said Lululemon's slow start to the year was due to “missed opportunities in women's products and bags.”
“In women's products, we weren't able to maximize our business in the U.S. as a result of several missed opportunities, including a narrow color palette and selection, especially in core products like leggings,” she said.
He said Thursday that the company is aggressively pursuing markets it has missed.
In 2013, the company pulled many of its black leggings from shelves after customers complained they were see-through, and founder Chip Wilson drew public attention when he suggested the body types of some of the women who bought yoga pants might be to blame.
“Frankly, some parts of a woman's body just don't really work,” he said. Bloomberg TV interview, 2013“It's all about the thigh rub, how much pressure you use over a period of time, and how much you use.”
The company said the withdrawal of BreezeThru was a learning experience and did not impact sales for the quarter.
“Suspending sales was the right move and we look forward to selling this fabric again in the future,” McDonald said.
The brand also sells other leggings and has other divisions to focus on, such as men's apparel and women's accessories, so the reversal in leggings sales should only have a minimal impact on the brand.
“While the negative impact of BreezeThru's exit itself should not have a material impact on financial results, it will put pressure on the company to place increased emphasis on other innovations in driving brand buzz and traffic/conversions,” Raymond James analyst Rick Patel wrote in a client note this week.
With post wire
