This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

5 Dumbest Things on Wall Street This Week: March 22

3. Lulu Gets Pantsed

Give us some credit Dumbest fans. Did you really think we would forget about the sheer madness this week at Lululemon (LULU - Get Report)?

The athletic-apparel purveyor announced Monday it was recalling shipments of women's yoga pants with an unacceptably high "level of sheerness" from its stores. And while Lulu says it plans to see the problem through, the company admitted the issue will indeed impact its bottom line. Shares of the company got pantsed on the news, dropping 3% to $64 on Tuesday.

"The ingredients, weight and longevity qualities of the pants remain the same but the coverage does not," said Lulu in a statement.

Speaking of coverage, Wall Street consensus estimate for Lulu's Q1 is $353 million. Unfortunately, Lulu said it now expects lower earnings visibility and fiscal first-quarter sales of $333 million to $343 million, down from an earlier forecast of $350 million to $355 million. Lulu also lowered its first-quarter outlook for comparable store revenues, from 11%, to 5% to 8%.

Visibility. Coverage. Bottom line. See the problem through...Yes! Every single ridiculous pun is intended. You should know that by now.

For the record, Lulu's supplier, Eclat Textile of Taiwan, defended itself against the charges, saying the pants in question went through a certification process approved by the retailer. Eclat Textile CFO Roger Lo told the WSJ that "all the pants were manufactured according to the requirements set out in the contract with Lululemon."

Yes, Roger's knickers are certainly in a twist over this pants controversy, which means that Lulu now has a supplier problem on its hands as well. As for its customers, well, Lulu is offering full refunds or exchanges to anybody who purchased its less than opaque legwear.

One thing that remains clear for Lululemon -- other than its pants of course -- is that the once high-flying yoga stock may be a downward-facing dog until they zip this supply problem up.

3 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
GLDD $6.10 0.00%
JPM $61.28 0.00%
LULU $68.44 0.00%
MXWL $7.54 0.00%
AAPL $128.46 0.00%


DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs