UPDATE: Bank of America Lowers PT on Lululemon Stating Quality Issues

Bank of America analyst Lorraine Hutchinson published a report on Lululemon

that lowered it's price target from $63 to $60 and maintained it's Underperform rating after quality issues found in core product. In the report Bank of America said, "Lululemon announced that it has a quality problem in its core women's black pants and crops (the fabric is too sheer), and that it will pull these products from shelves. This will negatively impact sales; 1Q comps were up 11% until the company pulled the pants from stores, and now lulu expects 1Q comps in a range of +5-8%, and sales of $333-343mn. We are reducing our F2013 EPS estimate by $0.05 to $2.10 to reflect the sales impact and a drag on gross margin." Lululemon closed Monday at $65.90.