Lululemon guides lower this morning because of the effects of Omicron…
VANCOUVER, British Columbia–(BUSINESS WIRE)–Jan. 10, 2022– lululemon athletica inc. (NASDAQ:LULU) today announced that, for the fourth quarter of fiscal 2021, it now expects the company’s net revenue to be toward the low end of its range of $2.125 billion to $2.165 billion, and that it expects diluted earnings per share and adjusted diluted earnings per share to be toward the low end of its ranges of $3.24 to $3.31 and $3.25 to $3.32, respectively.
Calvin McDonald, Chief Executive Officer, commented: “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. 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.”
Consider this a sneak preview as more companies tell us about what’s going on these past few weeks.
Get used to hearing this because there will be more to come as earnings season kicks off at the end of this week. December went out like a lamb. Lots of people’s plans got canceled and businesses were certainly not immune to that. There was definitely a difficulty in staffing businesses these past few weeks as cases and exposures exploded from coast to coast. It’s still going on. Until Omicron peaks and crests, we’re going to be getting profit warnings related to it.
And now Fed Chair Jerome Powell is going to be in front of Congress this week for his reconfirmation hearing. He’s going to have to talk tough about fighting inflation and that’s what all of the questions are going to be about. Then we’re getting actual inflation data for December later in the week. It’s going to be high (sorry for the spoiler). The rhetoric will continue to be hawkish and the stock market will have to learn to live with that. Hawkish despite the Omicron stuff that’s helping to soften the economy in many large cities in real-time.
The week ends on what should be a positive note – earnings from a few of the largest banks. These reports should be glowing – investment banking, trading, lending, underwriting, yield curve steepening, etc. Bank stocks and financials in general have been on fire both relative to the rest of the market and on an absolute basis. We’re about to find out why. As we get warnings from other areas of the market because of the new pandemic wave, they should remain a bright spot for investors looking ahead.