Lululemon Plagued by See-Through Complaints as Q4 EPS Forecast Drops 22.8%
Lululemon shares slid 3.6% after multiple “see-through” customer complaints on its new leggings line and after analysts cut Q4 EPS estimates to $4.74 (down 22.8% year-over-year) on projected revenue of $3.6 billion (–0.2%). Activist pressure and a contested CEO search prolong leadership uncertainty despite robust international growth.
1. Stock Performance and Forecasts
Lululemon stock fell 3.6% in the latest session, underperforming major indices after analysts reduced Q4 EPS estimates to $4.74 (down 22.8% YoY) and projected revenue of $3.6 billion (–0.2%). Its forward P/E stands at 13.8 with a PEG ratio of 11.11, reflecting market discount amid earnings pressure.
2. Product Quality Issues
Multiple customers reported that the new Align series leggings became semi-transparent under stress tests, eroding confidence in the core product lineup. These see-through issues have sparked social media outcry and could weigh on unit sales and brand perception if unresolved.
3. Leadership and Strategic Outlook
Activist investors are pressuring the board as a contested CEO search continues, prolonging leadership uncertainty. While North American revenue softened, international sales—particularly in China—remain a bright spot, highlighting a dichotomy in regional performance and influencing the company’s Hold rating.