Retail InvestorsIt might not be as flashy as precious metals or the biotech industry, but the $27.0-billion U.S. yoga industry has some pretty strong numbers and corresponding retail stocks.

Over the last year, 15 million people regularly participated in yoga here in the United States, spending more than $27.0 billion on yoga products. Over the last five years, spending on yoga products has soared 87%. And the average annual increase of the number of people who practice yoga is expanding at a rate of 20%. (Source: “Yoga Statistics,”, July 27, 2013.)

Furthermore, almost three-quarters (72.2%) of yoga participants are women and 68% earn at least $75,000 a year. On top of that, more than 40% of participants are in the lucrative 18–34 age demographic, and 41% are between the ages of 35 and 54.

While a number of publicly traded retail stocks operate in the yoga apparel industry, none are quite as well-known, for better or worse, as lululemon athletica inc. (NASDAQ/LULU).

Of course, the “for worse” part refers to the barrage of negative public relations (PR) that has helped to drop this retail stock’s share price down 24% so far this year. Lululemon has been under severe PR pressure since March, when the retail stock recalled its popular black yoga pants for being too see-through. Company CEO Christine Day stepped down in June; and in July, the company was dealing with another PR nightmare after insiders said the company shuns plus-sized shoppers. To make matters worse, company founder Chip Wilson blamed quality control concerns regarding the yoga pants on “women’s bodies” (more specifically, thick thighs).

Clearly, the bad PR has been hurting Lululemon’s share price. At the same time, the yoga apparel retail stock is posting solid numbers. The company recently announced that third-quarter results were better than expected, with revenues increasing 20% year-over-year to $379.9 million; earnings climbed 15% to $66.1 million, or $0.45 per share. (Source: “lululemon athletica inc. announces third quarter fiscal 2013 results,” lululemon athletica inc. web site, December 12, 2013.)

Unfortunately, the company’s fourth-quarter guidance was its undoing; sending it down by more than 16%. Management revised the company’s fourth-quarter guidance lower to between $535 million and $540 million, versus its previous guidance of $565–$570 million. That’s a top-end miss of 5.2%.

The 16% hammering the stock’s share price took might be a little rich, especially when you consider consumer confidence levels are up and the jobs numbers are strengthening. And over time, everybody eventually forgets a PR fumble.

Interestingly, shareholders have not lost all confidence in the company synonymous with yoga retail stocks; in spite of the recent tumble in its share price, Lululemon is still trading in a tight two-year range; albeit, it’s near the bottom, but it does have support.

To improve its image, Lululemon has implemented a new management team and will be introducing new products to its growing legion of customers. That said, its one-year misstep has allowed competing retail stocks like Under Armour, Inc. (NYSE/UA) and NIKE, Inc. (NYSE/NKE) to step up to the yoga mat.

Will image problems in 2013 be the undoing or the beginning of the rebirth for the retail stock in 2014? Even though Lululemon goes hand-in-hand with high-end yoga wear and products, it’s not the only retail stock investors should consider.

There are more than a number of retail stocks willing and able to step in and take up Lululemon’s slack. And when it comes to high-end yoga gear, some consumers will spend quite a bit to look good—even when they’re not in yoga class.

This article This $27.0-Billion Niche Industry a Lucrative Opportunity for Retail Investors was originally published at Daily Gains Letter