Lululemon expects low Q4 earnings due to Omicron
Vancouver-based athletic wear company Lululemon Athletica Inc. said on Monday that it is expecting Q4 net revenue to be on the low end of its predicted range.
For the fourth quarter of fiscal 2021, net revenue is expected to be toward the low end of its range of $2.125 billion to $2.165 billion, while diluted earnings per share and adjusted diluted earnings per share will be toward the low end of its ranges of $3.24 to $3.31 and $3.25 to $3.32, respectively.
The results are a consequence of the Omicron variant, said CEO Calvin McDonald. In particular, he cited increased capacity constraints, more limited staff availability, and reduced operating hours in certain locations.
“We are closing out a strong 2021 in the coming weeks, and we’re pleased with how Lululemon has delivered over the course of the year,” McDonald said.
“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. I am proud of how our teams continue to deliver for our guests, and we are excited about what the future holds for Lululemon.”
Earlier this month, Lululemon also made headlines for a lawsuit launched by Nike Inc accusing the Canadian retailer of patent infringement for making and selling the Mirror Home Gym and related mobile apps without authorization.
Lululemon said in a statement: "The patents in question are overly broad and invalid. We are confident in our position and look forward to defending it in court.”
Last quarter, despite ongoing global supply chain disruptions, Lululemon still reported net revenue of $1.5 billion for the third quarter, up 30 percent from $1.1 billion in the same period in the previous year.
For the full fiscal year 2021, Lululemon expects to see net revenue of between $6.250 billion and $6.290 billion. Annual diluted earnings per share are expected to be in the range of $7.38 to $7.45.
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