Lululemon Expects Q4 Results to be Hurt by Capacity Constraints, Staff Limitations and Fewer Hours

The optimism athletic apparel company lululemon athletica inc. was feeling just a month ago seems to have been left behind with the change to 2022 and the Omicron variant, as the company said Monday (Jan. 10) that it expects to its net revenue to be on the low end of its predicted range for Q4.

That means closer to $2.125 billion than $2.165 billion with diluted earnings per share and adjusted diluted earnings per share also toward the low end of its ranges of $3.24 to $3.31 and $3.25 to $3.32, respectively. Despite the depressed numbers, lululemon’s projections represent 25% year-over-year growth.

Executives pinned the downturn on capacity constraints, staff limitations and fewer hours, all because of the ongoing spread of the omicron variant of the coronavirus across the U.S. and around the world. The downward revision follows two weeks of reporting that the Q4 holiday shopping season was better than expected and comes ahead of what is set to be a stream of retail earnings results in the coming weeks.

“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,” Chief Executive Officer Calvin McDonald said in the company announcement.

“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,” he said.

Related: Nike’s Patent Suit vs Lululemon’s Mirror Reflects Rising Stakes in Connected Fitness

Nike filed a patent infringement complaint against lululemon for its Mirror home gym product line in U.S. District Court in Manhattan Wednesday (Jan. 5).

Nike alleged that several of its patents had been violated and asked the court for a jury trial, a court order to stop lululemon from further use of its tech, an admission of willful violation, triple damages as well as reimbursement for its legal fees, costs and expenses related to filing the suit.

“The patents in question are overly broad and invalid. We are confident in our position,” a lululemon spokesperson said.