The pants represent approximately 17% of all women's pants in its stores and the recall will significantly affect first-quarter earnings. The company lowered revenue guidance to between 5% and 8% same-store sales growth from 11% same-store sales growth. Lululemon shares fell 0.3% on Wednesday to $63.88. The stock is down 5.9% over the past month. Apparently this is not the first setback that lululemon has had with its suppliers - last summer they had some bleeding problems with the bright colors in its swim line and there have been other issues in the past. So it's clear the expanding company is facing growing pains, especially when it comes to its suppliers keeping up with demand and quality control. And it's clear these are issues that must be addressed since investors will want to know that the company's operations are sound.
"A recall can be a costly headache for a company, but if it is handled well, it can also be an opportunity to enhance the company's credibility and reputation. It's critical to be transparent and responsive to your customers during challenging situations. That is how you build a trusted and respected brand in the long run. People tend to remember how you made a tough situation right rather than the tough situation itself," says Annie Xu, U.S. general manager of Alibaba.com, a global e-commerce platform. "I think what they're doing is brilliant," says Bernhard Schroeder, the director of San Diego State University's Lavin Entrepreneurship Center. "It's a hell of an FAQ. Very well done on their part and consistent messaging -
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