An analyst from FBR downgraded Lululemon and it had big effect on the stock price. Here is an article from the Vancouver Sun:
FBR Capital Markets downgraded the stock of sportswear retailer Lululemon Athletica to "underperform" ahead of its quarterly results and said the company's margins may be pressured in the near term.
"The stock appears priced to perfection and we believe any glitch on earnings could result in a sell-off," analyst Liz Dunn wrote in a note to clients.
Dunn said she was concerned that the quality has slipped a bit due to changes in the sourcing operations but expects the company to maintain its quality at the expense of margins.
This could benefit the maker of trendy $100 yoga pants in the long term but will pressure the stock near term, she added.
Company's shares closed at $89.82, down $5.66, on Thursday on the Toronto Stock Exchange.
16 comments:
Has the quality of the pants really improved? Are the pants pilling less and holding up better? I'm still seeing some negative reviews on their website regarding the quality of their pants.
I never buy the plain black pants anymore. They just don't wear well at all. The pants with grey or other colours are much better and have lasted a really long time.
So true. I would have been so embarassed to work in that IT shop. Deployment of the website was so not customer focus.
Very well said but I still adore the stuff and still am buying tons of it. It's so flattering, stylish, long-wearing and practical to wear for just about everything - I live in it. If the quality is ever compromised I'll stop buying.
I only buy their luxtreme pants now after all 3 of my luon pant started pilling after a few wears.
I can'tt understand how a company this big cannot afford to hire top talent in IT to properly manage their website upgrade. The cutover was a mess. Where I work, cutovers only took a few hours in the middle of the night. They also need to learn how to test the test environment before going into production. This was quite "over promised and completely under deliver". I am sure their competitors are laughing at them.
I am not surprised at all, the stores had very little inventory at the beginning of the year, and still are experiencing inventory problems.
I have cut down on my shopping at Lululemon the DSP and DSC are both pilling after a couple of washes, they are certainly not like the ones I purchased a couple of years ago. The prices are too high for the quality.
just bought my mom a pair of the DSCs but am thinking of returning and getting her something else for her birthday. i would feel so bad if they started falling apart after a few washes.
I guess the blog and shopping at Lulu a few times a week will cease? So they hit a big bump in the road..maybe this will give the company a wake up call and realize they cant cut corners on quality.
I started buying Lulu in December in Ottawa, Canada. I am hopelessly addicted since that first trip to the store. I did read reviews online about pilling on instrides and luon pants, but I have lived in my purchases and I have had zero problems (I now have at least 20 pants/shorts/crops and wash them properly). I am very observant of cut, fit, ad quality of manufacture, and I am satisfied that my money is being well spent. So at least in Canada, their fabric issues are clearly resolved. While I was frustrated with the online store changeover, I wondered after if it was partly designed to drive traffic to their stores. IMHO, the public has a short memory and if there are no further online glitches (uploads have been great and earlier the last two weeks) then things will go back as they were. The small-time casual shoppers come and go, but I believe their core customers will remain intact. I am a retailer (hardware, home decor and building materials) and I've been at this game long enough to know that some of those complainers in product review section online are a) complaining to hear themselves and b) hoping to get something for nothing, even if it's just an attempt to get Lulu to take a piece back after the return period has expired. In all fairness, Lulu should address two things for its customers: 1) Give a fair return period. Two weeks is not long enough if you factor in that many customers live more than an hour's drive from a store. 2) Review the restricted # of items policy and apply it fairly at every store/showroom/lab. I could say more, but I've probably already said enough. They're a good company, down from great, and I fully expect them to rise again. Their product is exceptional.
@ Peony - I date the return of a better (thick, soft) black luon with the release of the Unicorn Tears color palette (Violaceous). However, I still use my fingers when looking at black luon bottoms. If it doesn't feel thick and soft I am suspicious. If I can see my underwear color through the material when I bend over then it's still the crappy luon. I'm sure it will take awhile for them to get rid of the older supply of inferior luon. There is one reason I have never bought Astro crops or pants (or Relaxed fit) - I think the luon is a bit thinner than what is found on Grooves. I just bought my first pair of groove pants in something like two years. So, I think the people who have bad reviews may have been buying inferior luon. Also, lululemon now has two luon vendors so maybe one has a good thick recipe and the other has the not so great recipe. When you guys buy a pair of pants, feel it and then bend over in the mirror.
As for issues with the Strides, I haven't read any big bunch of complaining for a few months now so that issue seems to be solved.
As for pilling in DSC and DSP I haven't worn mine that much to notice a problem. I would encourage you to take them back. You are right, the price point is too high for them not to wear well.
@Luluaddict-
Thanks for you reply! Good info to know. You only mention the black luon.....do you feel the other colors (i.e., coal) are made of better fabric? I'm tempted to buy some Astros in coal and crops in wren.
Thanks again!
"feel it and then bend over in the mirror."
Thanks for my morning chuckle, LA! :)
anon 4:07: I live in Canada and I am a hard core customer I have experienced the quality bug on the Luon pants, black pique InStride, and the Aura Jacket (developed a hole after 1 washing), so I am no longer a hard core customer (sad).
@ Peony - I had (have) a problem with my static black Still pants pilling a ton between the legs. You can't really see it but I feel it with my fingers. I've heard subsequent runs of the same color fabric are better. I haven't returned the pants because I like the color a lot. It's tough to say with other colors. Some wear better and some don't. I bought Fox Brown Relaxed Fit crops about four years ago that felt thinner than black luon and pilled very easily so older wasn't necessarily better. I think the thing is to feel the fabric - if it feels rough to the touch I think it will tend to pill more easily. Also, if you can see the color of your underwear when you bend part way over, the weave is thin and it won't give you good coverage of your lumps and bumps which is why we pay $98 for yoga pants. Overall, I think most of the fabrics are pretty good but if it pills easily in spots where it rubs - crotch or armpit - then take it back and get it assessed. Lululemon does quiet recalls. They won't tell everyone about a problem but they won't give you a hassle when they take stuff back.
I'm not so sure that the quality is increasing. I bought a pair of reversible wunder under crops that pilled completely on both sides (talk about uncomfortable!). I've only washed them twice (both times by hand and without any soap), and have only worn them a few times. I have pants that are ten years old and look better than these. Also, I bought a shirt that was not only sewn completely crooked on one side, but it came apart at the seam. I bought a water bottle that leaked all over my iphone, and two pairs of underwear that both broke (one I noticed before wearing, the other I noticed the first time I wore it). Not to mention the decrease in customer service: not only were the in-store staff unhelpful and rude (on multiple occasions), the "educators" at GEC weren't much better. It seems as if all GEC does these days is chalk up the bad quality of their products on some sort of freak accident, without taking responsibility for their screw-ups. I've been supporting Luluemon since the beginning of their company; now, I am never stepping in to another Lulu store.
I must agree with most on here regarding quality and selection. The pants definitely fray and don't look good at all; not for $120 dollar price tag. The selection is just as terrible. The shorts are all short shorts. What ever happened to the down dawg short. Whatever happened to the great pants they used to have for men. Their work to play pant used to look great and was rugged to boot. The extra length was an incredible added bonus. Now, they make excuses that the pant no longer comes extra long because of the fabric that they use. No longer a lulu lemon customer. I used to spend 1000 dollars a year on their clothes. I have switched over to the Helly Hanson line. Sad for a company to be run this way. Total abuse of customer loyalty.
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