Lululemon: Chief product officer is leaving company
NEW YORK Lululemon (LULU) says its chief product officer is leaving as the company addresses the production problems it has had that rendered some of its pants see-through.
The Canadian yoga wear maker says Chief Product Officer Sheree Waterson is leaving effective April 15.
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"This decision was made as part of our plan to reorganize our product team to support our long-term growth strategy," said the company in a statement on Wednesday to CBS MoneyWatch.
"As the organization matures organizational structure changes are often required," said Lululemon.
The company late last month pulled its Luon pants from shelves because its fabric was too sheer. The company now says the problems stem from incomplete testing protocols combined with a style change in the pants pattern. Lululemon says it hired a new team to look into the problem and oversee production of the Luon pants, which cost $72 to $98.
Luon pants, made from a combination of nylon and Lycra fibers, are one of the retailer's product staples and account for about 17 percent of all women's pants in its stores. The company is offering customers full refunds or exchanges Lululemon did not say when it expects Luon pants to be back on shelves.
CEO Christine Day said the company stands by the outlook it offered on March 21 during an earnings report that came after the pants problem arose.
At that time, the company said withdrawing Luons will cut its revenue by $12 million to $17 million in the first quarter and by $45 million to $50 million for the rest of the year, particularly in the second quarter. It also said it expects first-quarter earnings of 28 to 30 cents per share. It reported earnings of 32 cents per share a year ago. The company expects the recall will pull its earnings down by 11 to 12 cents per share.
Analysts expect earnings of 29 cents per share on revenue of $339.7 million, according to FactSet.
Lululemon ending regular trading day up $1 at $64.24.