Vancouver-based athletic wear company, Lululemon Athletica Inc., recently announced that it expects its net revenue for the fourth quarter of fiscal 2021 to be on the lower end of its predicted range. This decline in earnings is attributed to the impact of the Omicron variant of COVID-19.

Lululemon anticipates its net revenue for Q4 to fall within the range of $2.125 billion to $2.165 billion. Furthermore, diluted earnings per share and adjusted diluted earnings per share are expected to be within the ranges of $3.24 to $3.31 and $3.25 to $3.32, respectively. CEO Calvin McDonald highlights the challenges caused by the Omicron variant, including increased capacity constraints, reduced staff availability, and limited operating hours in certain locations.

Despite these obstacles, McDonald expresses satisfaction with Lululemon’s overall performance throughout 2021. He acknowledges the strong start to the holiday season but emphasizes the subsequent negative effects of the Omicron variant. Nevertheless, he remains optimistic about the future of the company and commends the efforts of the Lululemon team.

In addition to the expected decline in Q4 earnings, Lululemon is facing a lawsuit filed against them by Nike Inc. The lawsuit accuses Lululemon of patent infringement regarding the production and sale of the Mirror Home Gym and its corresponding mobile apps without proper authorization. Lululemon responds by asserting that the mentioned patents are overly broad and invalid. They express confidence in their position and confirm their intention to defend themselves in court.

Despite ongoing disruptions in the global supply chain, Lululemon reported an impressive net revenue of $1.5 billion for the third quarter, marking a 30% increase compared to the same period in the previous year. Looking ahead, Lululemon expects to achieve net revenue between $6.250 billion and $6.290 billion for the full fiscal year 2021. Furthermore, annual diluted earnings per share are projected to fall within the range of $7.38 to $7.45.

Useful links:
Lululemon Official Website
Nike Official Website