Lululemon shares fell in premarket trading on Monday after the retailer said earnings and revenue for its fiscal fourth quarter will likely come in at the low end of estimates due to staffing shortages and shortened store hours as Covid cases once again surge in the U.S.
The stock tumbled around 7% after closing Friday down 3.7% at $355.21.
Lululemon said in a press release it expects fourth-quarter revenue at the low end of its range of $2.125 billion to $2.165 billion. It predicts adjusted earnings per share also toward the low end of its range of $3.25 to $3.32.
Analysts had been looking for adjusted earnings of $3.34 per share on sales of $2.17 billion, according to Refinitiv 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,” said Lululemon’s Chief Executive Officer Calvin McDonald.
Many retailers are seeing labor problems worsening as staff become sick or are exposed to Covid-19, with the presence of the highly contagious omicron variant.
Department store operator Macy’s has cut store hours at locations across the country for the rest of this month. While big-box retailer Walmart temporarily closed almost 60 locations in December at coronavirus hot spots. Other employers, including Nike, Athleta and Starbucks, have also trimmed hours at locations where they don’t have enough people to keep them open.
Read the full press release from Lululemon here.