Lululemon shares are giving a whole new meaning to “downward dog.”
The struggling yoga-clothes retailer’s stock plunged to a 52-week low on Monday after the company slashed its already-weakened forecast for the crucial fourth quarter, citing a drop-off in business.
In a statement that startled Wall Street, financial chief John Currie said sales and customer traffic have slumped “meaningfully” since the beginning of January.
Lululemon shares lost nearly 17 percent to close at $49.70 after hitting a year-low of $49 earlier Monday. That’s on the heels of a warning on holiday sales just a month ago, when Lululemon said its increasingly tattered reputation was hurting business.
Loyal Lululemon customers got peeved in November when founder Chip Wilson partly blamed overweight customers for complaints early last year that a batch of the company’s Luon yoga pants were too sheer, exposing customers’ buttocks.
“It’s really about the rubbing through the thighs, how much pressure is there over a period of time,” said Wilson, who has since agreed to give up his position as chairman later this year.
Scrambling to fix the see-through pants issue, some analysts say has distracted the company from designing new fashions.
“Don’t feel tempted to step in here,” Buckingham Research analyst John Zolidis told clients in a research note, warning that Wall Street continues to be overly optimistic about Lululemon’s results.