LULU has been having quality issues for a year. -- they've rebranded wunder unders into "under crops" due to sheerness, had the paris pink bleed through episode, and had a lot of issues with pilling, bleeding, and fraying.
Long-term lulu fans are starting to abandon the brand, and this was the first Q in 4 years where they've actually had revenue problems; meanwhile Chip has been selling like crazy.
I would not be surprised if the executive team is selectively disclosing information to
a) take a big bath
b) drive the stock down so that they can get good prices on stock options
c) claim that since the stock dropped, they should get larger cash bonuses
If I'm correct, the stock will bounce, but in 2-3 quarters, the slowing growth trajectory will be more readily apparent.
The supplier has stated, via WSJ, that the garments in question were made to LULU specifications and that LULU has not contacted them about the quality issue. Strange, something could be surfacing tomorrow or tonight, this could get egly.
That was my thought as well... Plus, women have been complaining about the poor return policy, the transparency of the pants, the shorter length of the garments, etc. All seems calculated to maximize short term gross revenue and to take a big bath when that burns out.