People stuck at home during last year’s shutdowns have ditched dressier clothes for hoodies and leggings, benefiting Lululemon, Aerie, Athleta and sparking others, including Kim’s shapewear brand. Kardashian Skims, to enter the fray.
Clothing makers Athleisure are still reserving benefits over sales, but Lululemon said the worsening pandemic due to COVID-19 variants could further impact supply chain issues and lead to the temporary shutdown. of some or all of its stores.
The new variant of the Omicron coronavirus first detected in southern Africa and Hong Kong has triggered uncertainty over the reopening of the global economy.
Lululemon has already had to move some of its production out of Vietnam due to plant closures caused by a pandemic over the summer, make more use of the more expensive air freight, and prioritize production for major vacation styles in order to tackle supply chain bottlenecks.
âThe demand for our brand exceeds supply, and our business could have been even stronger without the supply chain challenges,â CEO Calvin McDonald told analysts, adding that inventory issues had affected the launch of certain new clothing collections.
Lululemon shares fell 2% to $ 408 in extended trading, as the company also slashed the prospect of selling its home fitness platform Mirror.
The company’s factories in Vietnam have reopened, but the lingering effects of the closures have resulted in delays in delivery of some holiday and fall products, McDonald said.
However, Lululemon raised its revenue forecast for fiscal 2021 to between $ 6.25 billion and $ 6.29 billion, which is largely in line with estimates.
The company’s revenue reached $ 1.45 billion in the third quarter, compared to an estimate of $ 1.44 billion. On an adjusted basis, the company earned $ 1.62 per share, beating estimates of $ 1.41.