Lululemon Athletica’s shares tanked after the retailer warned its holiday business took a hit because of the Omicron variant.
Shares of the pricey yoga clothing chain were down more than 5 percent at $336.90 early Monday after the company warned sales and profits are trending toward the low end of its previous 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,” chief executive Calvin McDonald said in a statement.
The company said its fourth-quarter sales are trending toward the bottom of its $2.1 billion to $2.2 billion estimate adding that its profits would also come in on the low end of its adjusted profit forecast of $3.25 to $3.32 a share.
Lululemon has been one of the retail beneficiaries of the pandemic as more consumers sought out comfy clothing and workout gear to keep in shape at home, but the fast-spreading Omicron variant has finally caught up with Vancouver-based company.
Other retailers have been forced to curtail their hours, including Macy’s, as employee shortages due to higher COVID-19 infection rates take a toll on its staffing levels. Walmart closed 60 stores in December for 48 hours to sanitize the stores.