Lululemon’s stock plunged after the retailer said that fourth-quarter earnings and revenues will likely be below estimates due to staff shortages and reduced working hours with the high number of new cases of Covid-19 in the United States, which was reflected on the company’s share, to close down by 1.9% at $348.43.
Lululemon said in a press briefing that fourth-quarter revenue will be in the lowest range of the $2.125-2.165 billion forecast, and forecasts that adjusted earnings per share will also fall to a weak range of $3.25-3.32, while analysts, they believed earnings should be $3.34 per share, with sales of $2.17 billion, according to Refinitiv.
CEO Calvin MacDonald said:
“We had a strong start to the holiday season, but we experienced many omicron mutant consequences, including increased work restrictions, insufficient staffing and reduced hours in some stores”.
Many retail companies are experiencing poor employment problems after staff contracted or were exposed to the virus in light of the spread of the highly contagious Omicron mutant, and Lululemon had previously lowered its aspirations last month. Read More [Lululemon Posts Strong Earnings But Lowers Mirror Prospects].
Macy’s, the supermarket operator, has also reduced business hours across the country for the rest of the month, and Walmart has temporarily closed about 60 stores in December in the most severe areas of the coronavirus outbreak, while other companies, including Nike, Athleta and Starbucks, to cut back hours in stores where they do not have enough employees.