CORRECTED-UPDATE 2-Lululemon stock drops as yoga pants expose problems

Wed Mar 20, 2013 10:25am EDT
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(Corrects second and third paragraphs to show recalled garments represent 17 percent of all women's bottoms)

* Quality issues could undermine Lulu's brand, analysts say

* Lower-priced rivals now have chance to win customers

* Taiwan supplier says Lululemon misjudged consumer tastes

* Lululemon lowers sales forecast for fiscal Q1

* Shares down 3.3 pct on Toronto Stock Exchange

By Allison Martell and Yimou Lee

TORONTO/HONG KONG, March 19 (Reuters) - Shares of Lululemon Athletica Inc slid on Tuesday after the trendy retailer said it was recalling batches of pants it called too transparent, an embarrassment that raised fresh questions about whether it could sustain its stellar growth.

Late on Monday, Lululemon said the recalled garments - black pants made with its signature "Luon" fabric - fell short of technical specifications.   Continued...