Months of recovery with many businesses in Burnaby late in 2021 is now being erased due to the Omicron variant.
Several restaurant owners have shared with me how business has dropped off dramatically as more people stayed home during the normally busy Christmas season.
One owner of a Burnaby hair salon said business is down 50% after seeing a recovery during the summer and fall.
“Just as we were finally making some money this Omicron comes along,” said the owner, who didn’t want their shop identified.
Big businesses are seeing the impacts of Omicron fears as well.
Lululemon Athletica Inc., which operates a large store in Metropolis at Metrotown in Burnaby, has lowered its fourth-quarter earnings estimates as the Omicron variant curbs the retailer's sales.
The company says it now expects its net revenue and earnings to be on the low end of previously announced ranges.
Calvin McDonald, CEO of the athletic apparel retailer, says Lululemon started the holiday season in a strong position, but has since experienced several consequences as a result of the surge in COVID-19 cases and changing restrictions.
He says Lululemon has been impacted by increased capacity constraints in stores, more limited staff availability and reduced operating hours in some locations.
David Swartz, an equity analyst at Morningstar, says Lululemon has consistently smashed sales and earnings expectations over the past three years, making it surprising to see any weakness emerge.
In a client note last March, Morningstar said Lululemon’s valuation "is as stretched as its leggings."
Lululemon’s share price dropped a little more than six per cent following Monday's announcement, and was down roughly 30 per cent from its all-time high in November.
The company's shares were trading for about US$333.30 midday on the Nasdaq composite. Swartz says Morningstar's fair value estimate is US$193.
- With additional reporting by the Canadian Press
