Athletic apparel maker Lululemon Athletica is not in a situation stores are upset about being in, but surging demand for its products has left the company with dwindling inventories, preventing the company from benefiting from surging demand for its clothing. The company, based in Vancouver, Canada, said same-store sales surged 28 percent in its last fiscal quarter, boosted by demand amongst fashionable gym-goers for its athletic gear. However, sales growth could slow this current quarter in the low double digits as inventories are quickly falling and its suppliers are failing to keep up with increased demand.
"The exceptionally strong sell through of our (fourth-quarter) product line leaves us with short term unmet demand in the first quarter due to a low inventory position," said Lululemon chief executive Christine Day in an earnings report. The store's inventory is hitting critically low levels which is eating into profits.
Nonetheless, the apparel maker is looking to better track its inventory and is looking to implement an inventory tracking system to better manage its supplies. While some analysts contend the dearth of merchandise can only help fuel the brand's exclusivity, it is still eating into profits.
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