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Lululemon CEO exits in wake of sheer-pants fiasco

(MoneyWatch) Shares of yoga clothing manufacturer Lululemon Athletica Inc. (LULU) plunged more than 12 percent in after-hours trading after the company's CEO said she is resigning.

Christine Day, at the helm for more than five years at the trendy maker of tight-fitting yoga outfits, said she will leave once a successor is named. The company delivered the news of the CEO's departure along with its quarterly earnings report, which beat analysts' expectations.

Day's exit comes amid the aftermath of a corporate debacle in March, when the Vancouver-based company's yoga pants were deemed to be too sheer. The company announced a massive recall of the products and its shares -- as well as its reputation -- took a hit.

"Christine has been an exceptional leader for lululemon, successfully embracing the culture while growing the business and returning value to all of our stakeholders, including our guests, employees, partners and shareholders," said Chip Wilson, chairman of the Lululemon board of directors, in a press release. "I thank Christine for her leadership, contributions and commitment to lululemon. I am confident that we will find the right person to lead this strong team and continue to build on this excellent foundation."

First-quarter profit came in at 32 cents a share, compared to a consensus estimate of 30 cents.

Shares crumpled in after-hours trading, shedding more than ten dollars to $72.16.

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