NEW YORK (AP) — Lululemon's image problems are starting to take a toll on its business, the yoga clothing seller's executives acknowledged Thursday.
Shares of Lululemon Athletica Inc. dropped nearly 11 percent after the company said it expects a key sales figure to be flat in the next quarter and trimmed its outlook for the year. It noted that customer traffic in its stores slowed down in November.
The weak forecast comes as Lululemon looks to bounce back from a series of embarrassing issues. This spring, it pulled its Luon line of its popular yoga pants from store shelves after customers complained they were too see-through. The company blamed their sheerness on production problems.
The company's founder, Chip Wilson, also angered some customers when he said in a recent television interview that some women's bodies "just don't actually work" for Lululemon pants. He also said thighs rubbing over time will cause the pants to wear out too quickly.
Earlier this week, the Canadian company named a new CEO, Laurent Potdevin, and said Wilson would step down as chairman. Potdevin succeeds Christine Day, who had been CEO since 2008 but announced her intentions to leave in June. Potdevin, a 20 year-industry veteran, was most recently CEO of Toms Shoes.
The muted outlook is a sign of the challenges ahead. The company, based in Vancouver, has long enjoyed a devoted following willing to pay $100 for a pair of yoga pants. Those devotees helped Lululemon ring up $1.4 billion in sales last year.
But the company's Chief Financial Officer John Currie acknowledged in a conference call with investors Thursday that the gaffes and quality issues have hurt the business.
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