Shares of Lululemon
The stock nosedived more than 8% in the pre-market trading session on the news.
The Lululemon stock opened the market at $ 329.95 apiece, down 7.11 percent from the Friday close of $355.21.
On the dashboard of Quantale, the impact of the announcement on the stock activity will be printed as the day proceeds.
On Friday, Lululemon stock activity fell 27.27% but saw an increase of 30.30% in the trading volume.
Lululemon said in a press release it forecasts the net revenue of its fiscal fourth quarter, which ends on Jan 31, to come at the low end of its range of $2.125 billion to $2.165 billion. Moreover, it pegs its diluted earnings per share and adjusted diluted earnings per share to be at the low end of its ranges of $3.24 to $3.31 and $3.25 to $3.32, respectively.
Earlier, the company was expecting FYQ4 revenues to come in between $2.125-$2.165 billion, with revenue growth of 23-24% on a two-year CAGR basis. Adjusted earnings were projected to be between $3.25-$3.32, with a flat gross margin on a two-year basis.
Analysts were expecting the company’s earnings to quote $3.34 per share on revenue of $2.17 billion, according to Refinitiv estimates.
“We started the holiday season in a strong position but have since experienced several consequences of the omicron variant, including increased capacity constraints, more limited staff availability, and reduced operating hours in certain locations,” said Lululemon’s Chief Executive Officer Calvin McDonald.
This highly contagious Omicron variant has added to the woes of retailers, as they were already grappling with the supply chain disruptions induced by the global lockdowns in a previous couple of years. When their business gained momentum, a fresh spike of covid infections has again put them in a tight spot. Their workforce is either sick or exposed to covid-19, worsening the staff crunch.
Renowned department store operator– Macy’s has cut operating hours for the remaining month at various locations across the country in the wake of the rising coronavirus infection. While Walmart closed almost 60 shops in December briefly due to coronavirus outbreaks. Nike, Athleta, and Starbucks, among others, have reduced hours at locations where they do not have enough employees to keep their stores running.