Lululemon to fast-track hot new styles after 'Breezethrough' fiasco
Updates Aug 29 story to add shares in paragraph 5
By Savyata Mishra
Aug 29 (Reuters) - Lululemon Athletica LULU.O on Thursday promised to fast-track hot styles to the market, after embarrassing reviews of its "Breezethrough" leggings prompted the pricey athleisure maker to pull them off shelves.
The Vancouver, Canada-based company stopped sales of the newly launched $98 leggings in July as shoppers criticized the V-shaped back seam of the tights as "unflattering". Others said the seam at the top of the waistband was digging into their waists.
"For 2025, we are fast-tracking still new styles within performance, shorts, tops and track suits," CEO Calvin McDonald said in a post-earnings call, referring to apparel for racket sports and office wear.
"We are optimistic that we will begin to see the benefits of these strategies over the upcoming quarter."
Lululemon shares seesawed in extended trading afterthe company cut its 2024 sales and profit forecasts on Thursday. Shares were up 4% in premarket trading on Friday.
The company, which posted a rare quarterly sales miss, said its women's business in North America disappointed because it was slow to launch spring styles, while colors and sizes were limited.
Second-quarter comparable sales rose 2%, but missed expectations of a 6.05% increase, driven by a 3% decline in sales in the Americas.
"When it comes to Lulu, when there's been missteps, they are good about addressing them and addressing them quite quickly," said Jessica Ramirez, analyst with Jane Hali & Associates.
The company did not have enough of the smaller sizes and they addressed that, she said. "Now they have the fast lane and they said they will be bringing innewness. The reassurance of having that fast lane gave more assurance to investors today."
Last quarter,CEO McDonald flagged a slower start to the year due to factors including a "missed opportunity in women's and bags". He said on Thursday the company was actively addressing.
"When looking at women's, we did not maximize the business in the U.S.,which was the result of several missed opportunities, including a color palette and our core assortment, particularly in leggings that was too narrow," he said.
A decade ago, Lululemon was slammed by shoppers after they sold see-through pants.
The "Breezethrough" leggings line was "a test and learn" with only limited inventory and did not hurt quarterly sales, Lululemon said.
"We took the right step of pausing on sales and look forward to reintroducing the fabric in the future," McDonald said.
Analysts have said the impact of the recent issues would be limited, thanks to Lululemon's more diversified women's product assortment and its expansion into men's apparel, which has been performing well.
"The negative impact of pulling Breezethrough itself shouldn't be material to results, but it puts more pressure on other innovation to carry more of the weight for brand buzz and driving traffic/conversion," Raymond James analyst Rick Patel wrote in a client note this week.
Lululemon's sales growth has moderated over the past year https://reut.rs/3Z4MsZb
Reporting by Savyata Mishra in Bengaluru; Editing by Sayantani Ghosh and Arun Koyyur
Relaterade tillgångar
Senaste nytt
Ansvarsfriskrivning: XM Group-enheter tillhandahåller sin tjänst enbart för exekvering och tillgången till vår onlinehandelsplattform, som innebär att en person kan se och/eller använda tillgängligt innehåll på eller via webbplatsen, påverkar eller utökar inte detta, vilket inte heller varit avsikten. Denna tillgång och användning omfattas alltid av i) villkor, ii) riskvarningar och iii) fullständig ansvarsfriskrivning. Detta innehåll tillhandahålls därför uteslutande som allmän information. Var framför allt medveten om att innehållet på vår onlinehandelsplattform varken utgör en uppmaning eller ett erbjudande om att ingå några transaktioner på de finansiella marknaderna. Handel på alla finansiella marknader involverar en betydande risk för ditt kapital.
Allt material som publiceras på denna sida är enbart avsett för utbildnings- eller informationssyften och innehåller inte – och ska inte heller anses innehålla – rådgivning och rekommendationer om finansiella frågor, investeringsskatt eller handel, dokumentation av våra handelskurser eller ett erbjudande om, eller en uppmaning till, en transaktion i finansiella instrument eller oönskade finansiella erbjudanden som är riktade till dig.
Tredjepartsinnehåll, liksom innehåll framtaget av XM såsom synpunkter, nyheter, forskningsrön, analyser, kurser, andra uppgifter eller länkar till tredjepartssajter som återfinns på denna webbplats, tillhandahålls i befintligt skick, som allmän marknadskommentar, och utgör ingen investeringsrådgivning. I den mån som något innehåll tolkas som investeringsforskning måste det noteras och accepteras att innehållet varken har varit avsett som oberoende investeringsforskning eller har utarbetats i enlighet med de rättsliga kraven för att främja ett sådant syfte, och därför är att betrakta som marknadskommunikation enligt tillämpliga lagar och föreskrifter. Se till så att du har läst och förstått vårt meddelande om icke-oberoende investeringsforskning och riskvarning om ovannämnda information, som finns här.