Lululemon Athletica shares plunged by almost a quarter (23.44 per cent) on Thursday amid a weak outlook for its sales.
But the Vancouver-based company is far from the only one struggling in the so-called athleisure market — clothes that can be worn casually or for working out.
Lululemon CEO Laurent Potdevin said the company has seen a “slower start” to the first quarter and he blamed it on a “lack of depth and colour” in its spring product offerings, according to a transcript of a Wednesday earnings call that was posted by investment research site Seeking Alpha.
“With focused urgency our teams have been cross correcting the issues, with early indications reflecting an immediate and positive impact on performance,” he said.
“We will see more colour in selected style as early as next week.”
Lululemon’s yoga pants and other athletic offerings helped to spawn the athleisure phenomenon, with innovative, high quality clothes offered at steep prices.
But the company has been a “victim of their own success,” retail analyst David Ian Gray told Global News.
Competitors like Beyonce’s Ivy Park line have entered the market, giving Lululemon more competition than it had before.
“The market reality is they’re in a pretty low growth economy right now, with a lot more competition than they had in athleisure from years back,” Gray said.
But Lululemon isn’t the only athleisure company that’s toiling in a crowded market.
Under Armour, one of Lululemon’s top competitors, said in January that sales slowed in the fourth quarter; the company also tempered its outlook for this year, The Wall Street Journal reported.
And just last week, Nike said it expected its own sales to grow slower than the athletic wear giant expected.
The companies’ struggles are sure signs that the athleisure market is saturated, the Journal noted.
READ MORE: Strong holiday sales give Lululemon a boost in fourth quarter
The drop in Lululemon’s stock price isn’t necessarily a reason to count it out, however.
Even with shares doing the downward dog, they’re still up on the year.
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