Lululemon Plunges Amid Omicron Hit

Lululemon Plunges Amid Omicron Hit

Lululemon (NASDAQ: LULU) shares tumbled on Monday after disclosing that its fourth-quarter earnings and revenue will probably be on the low end of the spectrum amid staffing shortages and Covid restrictions within the U.S. The stock fell approximately 4% during early morning trading after having closed 3.7% down on Friday.

Fourth-Quarter sales ending January 31, are expected to amount to the low end of its USD2.125 billion to USD2.165 billion range, the company stated Monday. Furthermore, it forecasts adjusted earnings per share will lean towards the low end of its previously determined USD3.25 to USD3.32 scope. Meanwhile, according to Refinitiv, analysts had been expecting earnings of USD3.34 per share on sales of USD2.17 billion.

“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,” Chief Executive Officer Calvin McDonald said in the statement.

The circumstances are a hit to the retailer that had previously profited from continuous demand for more comfortable clothes throughout the pandemic. The high demand had helped it evade industry-wide logistical issues. However, amid the recent spread of the omicron variant, many retailers have experienced major staffing shortages as more employees become infected.

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