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Shares of Lululemon (NASDAQ:LULU) were off as much as 5.3 percent in morning trading on Monday after the iconic athletic apparel company announced that “we expect a shortage in our supply of black Luon pants and crops” that could knock as much as $22 million off of first-quarter 2013 revenue.
“We have determined that certain shipments of product received from our factories and available in store from March 1, 2013 do not meet our technical specifications,” wrote the company in a statement. “The ingredients, weight and longevity qualities of the pants remain the same but the coverage does not, resulting in a level of sheerness in some of our women’s black Luon bottoms that falls short of our very high standards.”
To put it more bluntly, a manufacturing issue forced a recall. The company is offering full a refund or exchange for any affected products.
The scale of the issue is what is most concerning for the company and its investors. Lululemon suggests that about 17 percent of all women’s bottoms in its stores were affected, providing justification for the selling pressure…
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