Business

Lululemon Stock Plunges, CEO Closes Distribution Hub in Washington

Published

7 months ago

2024-04-20

Lululemon laying off 128 employees: File Image

Lululemon is closing its Washington distribution hub and laying off 128 employees, according to a WARN filing submitted to the state’s Employment Security Department on Thursday. According to the filing, layoffs will begin on June 21. According to CNBC, Lululemon intends to close the factory by the end of 2024.

After reviewing its infrastructure and fulfillment strategy, the company claimed that it decided to close the Sumner, Washington-based plant, which it described as one of its “smaller distribution centers.”

Lululemon intends to keep some staff at the Washington site, but the shutdown will result in “a reduction of just over 100 positions.”Those who remain “will relocate to other facilities,” it stated, including its recently opened distribution center in Los Angeles.

The athletic clothing firm stated it is “committed to supporting” affected employees but did not specify how it intends to do so.

According to SEC filings, Lululemon’s lease for its Sumner site will end in July 2025. After closing the Washington warehouse, the Canadian garment maker will have five facilities. The closure comes after the company announced in late March that it was having difficulty reaching customers in the United States.

Lululemon’s CEO, Calvin McDonald, told investors about the company’s results call, saying that “the consumer is a little soft” in the United States and that the company is “navigating a dynamic retail environment.”

Lululemon Stock Plunges

Lululemon stock has plummeted after the sports gear company offered poor guidance and reported lackluster sales in the United States, its largest market. The company disclosed holiday earnings that exceeded forecasts and revealed that its North American growth remained stagnant.

Lululemon’s reported net income for the three months ended Jan. 28 was $669.5 million, or $5.29 per share, compared to $119.8 million, or 94 cents per share, the year before. Sales increased to $3.21 billion, up around 16% from $2.77 billion the previous year.

Lululemon shares fell roughly 16% on Friday. As of Friday’s close, Lululemon stock was down almost 21% this year, considerably underperforming the S&P 500, increasing by around 10%.

Lululemon, like its counterparts, has been dealing with uncertain demand and a decrease in discretionary spending, which has impacted the garment industry especially hard. Investors have been watching how Lululemon performs in North America, its largest sales market, as it faces harder prior-year comparisons and competes with consumers who choose experiences over tangible things such as clothes and shoes.

Sales in the Americas increased by 9% during the quarter, compared to 29% in the previous year. Although Lululemon, like new, continues to grow in the region, its growth rate has slowed dramatically as it concentrates on worldwide expansion.

“As you’ve heard from others in our industry, there has been a shift in U.S. consumer behavior of late, and we’re navigating what has been a slower start to the year in this market,” CEO Calvin McDonald said in a conference call with analysts Thursday.

“We see this as a chance to continue playing offense as we make investments that will propel our development trajectory. Outside the United States, our business is thriving.”

Lululemon Sale and Conversions

McDonald stated that traffic and conversions are down in the United States. He ascribed this to a lack of products in sizes zero to four, which are important sizes for the U.S. customer base, and a scarcity of colorful items.

Meanwhile, overseas sales increased by 54% on a reported basis, with 78% growth in China and 36% in the rest of Lululemon’s markets. According to StreetAccount, comparable sales increased 12% in the quarter, falling short of analysts’ expectations of a 12.3% increase.

Lululemon forecasts net revenue between $2.18 billion and $2.20 billion this quarter, indicating a 9% to 10% increase. According to LSEG, analysts expected $2.25 billion in revenue or a 12.5% increase. LSEG expects diluted profits per share to be between $2.35 and $2.40, which is lower than the $2.55 analysts projected.

LSEG sales are expected to be between $10.7 billion and $10.8 billion for the year. It expects diluted earnings per share to be between $14 and $14.20 this year, compared to LSEG’s estimate of $14.13.

Lululemon has long been a market leader in women’s athletic wear, but the Vancouver-based firm faces greater competition than ever. Newer competitors of the Lululemon belt bag, such as Alo Yoga and Vuori, have been nibbling away at Lululemon’s market share, forcing the company to work harder to differentiate itself in a more crowded industry.

The firm has been attempting to expand its footwear offerings and increase its men’s division. During the quarter, it established its first men’s store in Beijing, an important development market for the brand. In February, it released its first men’s sneaker, CityVerse, and expects to release new running models for both men and women, as performance sneakers remain a bright spot in an otherwise stagnant shoe market.

As the holidays approached, McDonald stated that Black Friday was the “single biggest day” in the company’s history, and he was “encouraged” by the trends he saw at the start of the season. However, the retailer’s holiday-quarter guidance fell somewhat short of analyst estimates.

In January, it raised its guidance after seeing sales “balanced across channels, categories, and geographies,” said finance head Meghan Frank in a press release.

Geoff Thomas

Geoffrey Thomas is a seasoned staff writer at VORNews, a reputable online publication. With his sharp writing skills and deep understanding of SEO, he consistently delivers high-quality, engaging content that resonates with readers. Thomas' articles are well-researched, informative, and written in a clear, concise style that keeps audiences hooked. His ability to craft compelling narratives while seamlessly incorporating relevant keywords has made him a valuable asset to the VORNews team.

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Related Topics:Lululemon Lululemon Stock

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Subsidies for Electric Vehicles Cut as Consumer Interest Fades

Published

4 days ago

2024-11-04

Geoff Thomas

Electric vehicles (EVs) are still considerably more expensive than traditional alternatives.

Pressure is building on Canada’s electric vehicle manufacturers, and several are rethinking their stance on E.V.s in favor of plug-in hybrids. Automobile manufacturers are now bracing themselves for an even more challenging era in the Canadian market for electric vehicles (E.V.s).

President Kristian Aquilina of General Motors Canada claims that support and expectations are misaligned because the Canadian government is reducing subsidies for electric vehicles while trying to phase out gas-powered cars.

Manufacturers find pushing for an all-electric future in Canada increasingly difficult due to fewer consumer financial incentives and increasingly strict sales targets.

With subsidies totaling up to C$12,000 (about $8,500), Canadian consumers may save a tonne of money on electric automobiles. The federal government offers a rebate of up to $5,000 Canadian, and the provinces of Quebec and British Columbia provide further incentives of up to $7,000 and $4,000, respectively.

Ford lost about 2,000 US for every EV it sold in the first three months of the year.

Ford lost about $132,000 US for every E.V. it sold in the first three months of the year.

Ontario, which eliminated rebates in 2018, had the lowest market share for electric vehicles compared to Quebec and British Columbia, two regions that offered bigger incentives and thereby drove E.V. adoption in Canada.

Although this backing is dwindling, the province of Quebec has now declared that all subsidies will end in 2027. In June, the British Columbia government restricted incentives to a smaller subset of E.V. purchasers for “available funding” and higher-than-expected E.V. sales growth.

These reductions indicate a larger pattern: provincial governments reevaluate the sustainability of taxpayer-financed incentives for E.V.s as budget deficits widen.

With lofty goals to cut pollution from gas-powered cars and increase sales of electric vehicles, the Canadian government has reduced subsidies for these vehicles. Electric or plug-in hybrid vehicles will be mandatory for all new light-duty vehicle sales in Canada by 2035.

B.C. needs to step up with incentives for consumers to buy used EVs, some opposition critics say.

Some opposition critics say that B.C. needs to step up with incentives for consumers to buy used E.V.s.

To meet our intermediate goals, 20% of new sales must be electric vehicles (E.V.s) by 2026 and 60% by 2030. Car companies are already under a lot of pressure due to dwindling incentives and increasing demands, and the clock is ticking faster by the second.

In addition, these rules impose new forms of responsibility. Automakers that do not reach their provincial sales targets may be subject to financial fines imposed by provinces such as British Columbia.

Canadian manufacturers are already under financial pressure from federal compliance credit system standards, which they must meet or face deficits. This system gives them credit for electric vehicle sales and infrastructure improvements, but it’s not without its challenges.

“The timing is not necessarily lining up very well, in that the purchase incentive support comes off just as mandates and regulations start to bite,” GMC Canada President Kristian Aquilina told Bloomberg. “It must make a difference.

Therefore, we must consider that. Despite the cutbacks, Aquilina argued that the government’s investment in enhancing the charging infrastructure could benefit E.V. sales.

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Business

Chewy Slides After Filing Shows 3rd-Biggest Shareholder, ‘Roaring Kitty,’ Sold His Stake

Published

1 week ago

2024-10-30

Kiara Grace

Washington — Chewy shares fell about 2% overnight Wednesday after a regulatory filing showed that Roaring Kitty, a meme stock trader, sold his interest in the online pet retailer.

According to a beneficial ownership document filed with the Securities and Exchange Commission on Tuesday, Roaring Kitty, whose legal name is Keith Gill, sold all his Chewy shares, totaling 6.6% of the company.

Chewy Slides After Filing Shows Third-Biggest Shareholder, ‘Roaring Kitty,’ Sold His Stake

Plantation, Florida-based Chewy dropped 1.9% after hours to $26.19 per share.

Gill, an investor at the core of the meme stock craze, bought more than 9 million shares of Chewy in July, making him the company’s third-largest stakeholder.

Gill built a name for himself in 2021 by rallying ordinary investors around GameStop. At the time, the video game shop was fighting to stay in business, and major Wall Street hedge funds and investors were betting against it or shorting the stock. But Gill and those who agreed with him altered GameStop’s direction by purchasing thousands of shares despite practically all acknowledged criteria indicating that the firm was in deep peril.

Chewy Slides After Filing Shows Third-Biggest Shareholder, ‘Roaring Kitty,’ Sold His Stake

That triggered what is known as a “short squeeze,” in which large investors who had bet on GameStop were obliged to buy its swiftly increasing stock to offset significant losses.

Gill has expressed confidence in GameStop Chairman and CEO Ryan Cohen’s ability to revamp the company following his success at Chewy. Cohen cofounded Chewy in 2011 and stepped down as CEO in 2018.

SOURCE | AP

Kiara Grace

Kiara Grace is a staff writer at VORNews, a reputable online publication. Her writing focuses on technology trends, particularly in the realm of consumer electronics and software. With a keen eye for detail and a knack for breaking down complex topics. Kiara delivers insightful analyses that resonate with tech enthusiasts and casual readers alike. Her articles strike a balance between in-depth coverage and accessibility, making them a go-to resource for anyone seeking to stay informed about the latest innovations shaping our digital world.

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Business

Canada CBC News CEO Catherine Tait Recalled to Parliamentary Committee

Published

1 week ago

2024-10-30

Geoff Thomas

Catherine Tait won't rule out taking bonus once she leaves CBC/Radio-Canada

Canada CBC News reports that MPs have voted to recall CBC CEO Catherine Tait to a Commons committee for questioning, only a week after her last appearance, over the awarding of $18 million in bonuses to Canada CBC news executives.

The Conservatives, the Bloc Québécois, and the NDP joined forces to re-invite Ms. Tait, her successor Marie-Philippe Bouchard, and Heritage Minister Pascale St-Onge to appear before the Commons Heritage Committee.

Ms. Tait, who will relinquish her position as CEO and president of CBC/Radio Canada in January, addressed the committee last week. The House of Commons has passed a motion recalling her before the conclusion of her term, and she is now subject to an additional two hours of interrogation, which includes inquiries regarding bonuses.

MPs also resolved to summon Quebec broadcasting executive Marie-Philippe Bouchard, appointed as the new chief of CBC/Radio-Canada last week, to appear before she begins her new job following a House of Commons chamber debate.

Catherine Tait Exit Package

Catherine Tait rejected the Conservatives’ requests to deny an exit package, including bonuses, when she departed the position in January during last week’s committee hearing.

She also defended the award of $18.4 million in incentives to 1,194 staff members for the 2023-2024 fiscal year, which concluded in March, following the broadcaster’s achievement of performance indicators.

Kevin Waugh, a Conservative committee member who introduced the motion, stated that his party aimed to ensure Ms. Tait was “accountable to taxpayers” before her departure in January.

He informed The Globe and Mail that “Canadians are dissatisfied with the bonuses” and that Catherine Tait‘s exit package, which will not be disclosed, is a cause for concern.

“I am apprehensive that she has not received her bonuses in over two years, and that the Minister of Heritage or Privy Council will lavish her with bonuses when she departs in January,” he stated.

The Liberals opposed a portion of the motion that claimed that “the Liberal threat to cut funding” had resulted in the elimination of hundreds of jobs at CBC/Radio-Canada.

Defunding CBC News Canada

The Heritage Minister informed The Globe that the claim was “hypocritical,” as the Conservatives intended to completely defund CBC.

“The Conservatives’ actions today are a clear example of hypocrisy.” Ms. St-Onge stated that performance bonuses increased by 65% during the Harper Conservatives’ tenure, while CBC News Atlantic Canada experienced substantial budget cutbacks.

“As a government, we do not require any lessons from a party that has pledged to reduce the funding of CBC/Radio-Canada and the 8,000 jobs associated with it during its campaign.”

During the Tuesday debate, NDP MP Niki Ashton stated that her party endorses the “banning of executive bonuses” at CBC News Atlantic Canada but is opposed to “the Conservatives’ full frontal attack” on the broadcaster.

She stated, “We require a robust public broadcaster, but not one that distributes executive bonuses and eliminates positions.”

If the Conservatives establish the next government, they intend to deprive the CBC of public funding while maintaining French services.

Catherine Tait defended CBC and rebuffed MPs’ assaults during last week’s committee hearing. “It is evident that the members of this committee are making a concerted effort to discredit the organization and vilify me,” she stated.