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Lululemon’s (LULU) Q4 revenue hit by Omicron, shares -5%
Athletic apparel retailer Lululemon (LULU) traded down 5% on Monday after it said that it had suffered from the spread of Omicron, which will hit Q4 sales.
Lululemon (LULU) shares dipped 5% in trading on Monday after the athletic apparel retailer said that it was experiencing “several consequences” of the spread of Omicron as it offered conservative guidance for Q4.
In a new update to start the week, Lululemon said that sales are only likely to reach the lower end of its previous forecast of $2.15bn to $2.165bn, though adjusted profits will still be healthy at up to $3.40 per share.
While CEO Calvin McDonald said that the firm had ended last year on a high note, the impact of the latest variant of COVID-19 has since knocked it off course.
Rising Omicron infections have hit Lululemon’s physical stores where staff availability has been an issue and many locations have had to operate for reduced hours, while supply capacity has also been constrained.
McDonald said that he was still “excited” about the future, but near-term trading could be impacted based on the latest update.
The news comes after Lululemon warned that the closures of factories in Asia and other logistical problems in the region could lead to higher costs and crimp gross margins.
Investors began heading to the sidelines on Monday as LULU traded down 5.28%.
Shares were priced at $336.47 on the Nasdaq at midday and closed at -6.78 at $348.43.
The Vancouver-based company’s shares have now slumped around 10% during the last six months and are much lower than its 52-week high of $485.82.
Nike (NKE) shares also fell on Monday just days after the sports clothing manufacturer filed a lawsuit against Lululemon for a patent infringement related to the latter’s recently acquired fitness company, Mirror.
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