More 'see-through' issues surface for Lululemon, and the stock is taking a hit

By Bill Peters

The athleisure company's stock falls after more 'see-through' complaints surface about a new leggings line

Lululemon shares fell more than 3% on Thursday.

After Lululemon last month briefly paused some sales of leggings deemed to be too "see-through," a handful of similar complaints in recent days have surfaced about another product made by the yoga-wear giant, according to an analyst.

KeyBanc analyst Ashley Owens wrote in a Thursday noet that some Reddit reviews of a Valentine's edition line of pants with a "scattered heart" pattern indicate that the fabric becomes see-through when bending and squatting.

"While the pant is selling out online (we believe this may be an online-only colorway), the internal lining of the fabric is causing concern and could make it more susceptible to elevated returns if the issue becomes more widespread," Owens said in the note, dated Thursday.

Lululemon's stock (LULU) fell 3.6% on Thursday. It has dropped 18.4% so far this year.

Owens noted Lululemon's new product releases often serve as a test-and-learn period. But she said the recent reviews were worth paying attention to.

"At this stage, we haven't seen many reviews on the actual Lululemon website since it is not a standalone offering and part of a broader legging line, suggesting that it is limited strictly to these two colorways," she wrote, "but it is worth noting after recent headlines resulting in a temporary removal of the 'Get Low' silhouette."

Lululemon did not immediately respond to a request for comment.

The company last month said it briefly paused online sales of its "Get Low" selection of workout wear in North America, after users online said the clothing wasn't "squat-proof." The sales resumed days later, with new guidance that recommended "sizing up" for workouts in some cases and pairing the items with skin-tone, seamless underwear. However, that pause raised worries about product quality, after similar problems surfaced more than a decade ago.

Lululemon's stock is down more than 56% over the past 12 months, as it tries to counter competition, tariffs and questions about style cohesion with new products. The company is currently looking for a new CEO following Calvin McDonald's departure late last year.

Elsewhere in the KeyBanc note, Owens praised some of its the company's recent launches, like its Unrestricted Power line, and said she liked the comfort and stretch of Lululemon's new EasyFive line pants.

She wrote that "with product being front of mind as we await a turnaround," the belief is that Lululemon has to "hit its mark" with new products for investors to get comfortable with the stock. Another "see-through" issue certainly won't help.

-Bill Peters

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02-12-26 1650ET