Dive Brief:

• Lululemon Athletica Inc.'s stock dropped almost 17% in early trading Monday as the company, still battling fallout from too-sheer yoga pants and inappropriate comments by its founder, lowered its forecast for the fiscal fourth quarter.
• Lululemon now foresees quarterly earnings between $0.71 and $0.73 per share on revenue in a range of $513 million to $518 million, compared to previous estimates of earnings of $0.78 to $0.80 per share on revenue of $535 million to $540 million.
• The company based estimates on “meaningfully” declining traffic and sales in January, according to CFO John Currie, and predicted slower sales in stores open longer than a year. Previously the company had predicted flat sales in those outlets.

Dive Insight:

The company is perhaps still smarting from last year's lesson that “foot-in-mouth” is not exactly a healthy yoga pose. After years of growth, the new year sees Lululemon struggling from fallout due no doubt in part to 2013 missteps in quality and public relations. At a place where the signature item is named “Groove Pant” and its customers hail from a moneyed “namaste” crowd, Lululemon appears to need yet more damage control even months after it moved to address its problems. Lululemon will have to figure out how to get its groove back.