The athletic gear maker has been struggling with its brand's image since a last year's recall of its black yoga pants due to transparency issues and founder Chip Wilson's critique that some female bodies weren't ideal for its yoga pants caused once-loyal customers to shun the products.
While fourth-quarter results beat estimates, guidance for its first quarter was lower than analyst averages compiled by Thomson Reuters. Management said it expects revenue between $377 million and $382 million, based on flat comparable sales, and net income in the range of 31 cents to 33 cents a share.
Analysts had expected $389.39 million in sales and net income of 38 cents a share for the three months to April.
"As we move into 2014, we are reflecting on our learnings with humility, and are entirely focused on our future," said Laurent Potdevin, CEO since the beginning of the year. "2014 is an investment year with an emphasis on strengthening our foundation, reigniting our product engine, and accelerating sustainable and controlled global expansion."
For its fourth quarter ended Feb. 2, the specialty apparel retailer reported net revenue 7% higher to $521 million, while comparable store sales over the quarter decreased 2%. However, gross profit margins dropped 300 basis points to 53.5%, its third consecutive quarterly decline.