Retailers detail staffing shortages as omicron rages, but investors see it as short-term hit

A “now hiring” sign is posted on an Urban Outfitters store in San Francisco.

David Paul Morris | Bloomberg | Getty Images

Retail executives presenting at the virtual ICR Conference this week are detailing how the highly contagious omicron variant is denting sales and leaving stores and distribution centers understaffed.

But investors seem to be shrugging off the bad news, seeing it as a short-term challenge. For many retailers, the silver lining is that consumer demand appears to be well intact.

Lululemon said sales in the November-to-January quarter will come in on the low end of its previous expectations as it had to shorten hours at some locations due to labor constraints. Lands’ End said it has had a difficult time hiring. Abercrombie & Fitch cut its fiscal fourth-quarter revenue estimates because it didn’t have enough merchandise in stock to meet consumer demand. While Urban Outfitters said shopper visits to its stores didn’t pick up in December like it had planned, and instead people bought from its websites.

Still, Abercrombie shares were climbing nearly 8% midday Tuesday, while rival American Eagle Outfitters rose about 3%. Urban Outfitters’ stock increased almost 2%, and Lands’ End was up a little more than 2%.

And these are just a few examples of ways that the latest surge of Covid cases in the United States is sure to keep rattling the retail industry in the coming weeks. On Monday, roughly 1.5 million new cases of Covid-19 were reported, according to data compiled by Johns Hopkins University, pushing the seven-day average of daily new cases to 754,000. While many vaccinated individuals who are infected with the virus say its symptoms are mild, hospitalizations are starting to climb, particularly for those who become sick and are not fully vaccinated.

While these retailers may be weeks away from releasing complete results for the holiday quarter, the revised forecasts and comments offer analysts and investors a preview of what’s to come. Companies from Lululemon to American Eagle are also shedding light on how they’re working through any impact from omicron.

Working extra hours

‘A bit of a deja vu’

Source link

Related posts

Leave a Comment