Athletic-apparel maker said fourth-quarter results will be on the lower side of previous estimates
In early December, Lululemon, known for its pricey yoga pants and other sportswear, said it was expecting revenue of $2.13 billion to $2.17 billion over a three-month stretch, with earnings per share ranging from $3.25 to $US. had an adjusted income of 3.32. Now, it is more likely that the figures will fall below those limits, the company said.
Shares fell 5.2% on Monday morning to just below $337 after closing last week at $355.21. Traders have sold stock of the company this year, whose shares are down 14% so far in 2022.
The Omicron wave has sent COVID-19 cases in the US to unprecedented levels, leaving companies scrambling to keep their operations afloat as the virus disrupts the lives of employees and customers. One economist estimated that more than five million Americans could isolate themselves this week after testing positive.
Some forecasters have expressed concern that Omicron could exacerbate tightness in supply chains and labor markets already thinned by the pandemic situation. Monthly employment data released on Friday suggested firms are competing for a limited pool of workers, with wages up 4.7% over the previous month.
Guidance from the Centers for Disease Control and Prevention last month shortened the time people were asked to self-isolate after contracting COVID-19, opening the door for people to return to work faster after infection. Revealed.
Lululemon posted solid sales growth in each of the first three quarters of the fiscal year, with revenue up double-digit year over year in each three-month period. Fourth-quarter sales of $2.13 billion, at the low end of Lululemon’s forecast, would still mark an increase of about 23% over 12 months.
Since early 2020, Vancouver, British Columbia-based Lululemon has personally won over the decline of work as shoppers traded khakis and dresses for sweatpants and T-shirts. Like other retailers, Lululemon also benefited from an increase in online ordering.
During the past week, the shares had gained over 50% since the beginning of 2020.
Omicron’s recent drag on Lululemon provides evidence that the latest Covid-19 wave is once again denting personal selling for retailers across the board.
“I think Lululemon is one of the best-in-class operators, a brand that has tremendous momentum,” said Stifel analyst Jim Duffy. “If Omicron is affecting them, it’s definitely affecting others.”
Write Matt Grossman at [email protected]