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Lululemon Stock Plunges, CEO Closes Distribution Hub in Washington

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Lululemon Stock Plunges
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 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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Car Dealerships Are Being Disrupted By A Multi-Day Outage After Cyberattacks On Software Supplier

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Car Dealership | AP News Image

NEW YORK — This week, car dealerships around North America experienced huge interruptions.

CDK Global, which offers software to thousands of auto dealers in the United States and Canada, was struck by back-to-back intrusions on Wednesday. This resulted in an outage that disrupted many of their operations on Friday.

Prospective auto purchasers may face showroom delays or handwritten vehicle orders with no obvious end. Here’s what you should know.

CDK Global is a key player in the automotive sales business. The company, situated in Hoffman Estates, Illinois, just outside of Chicago, supplies dealers with software technology to help with day-to-day operations such as vehicle sales, financing, insurance, and repairs.

dealership

Dealership | CNN Image

Car Dealerships Are Being Disrupted By A Multi-Day Outage After Cyberattacks On Software Supplier

According to the business, CDK supports over 15,000 retail locations in North America. It was unclear whether this week’s cyberattacks affected all of these places.

According to spokesperson Lisa Finney, CDK is “actively investigating a cyber incident” and has shut down all of its systems out of prudence.

According to Finney’s statement, CDK “executed extensive testing,” consulted third-party specialists, and restored its main DMS and Digital Retailing capabilities by the afternoon.

CDK encountered another “cyber incident” on Wednesday evening, according to Finney in an update the next day. “We remain vigilant in our efforts to reinstate our services and get our dealers back to business as usual as quickly as possible,” she said.

When that will happen is unknown. As of Friday morning, a recorded message from CDK on a hotline providing updates for its customers stated that “we do not have an estimated time frame for resolution—and therefore our dealer systems will be unavailable, most likely for several days.” According to the statement, customer care assistance lines are also inaccessible.

The notice also stated that the company was aware of “bad actors” posing as CDK members or affiliates in an attempt to get system access by contacting customers. It advised employers to be wary of any attempted phishing.

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Dealerships | Bloomberg Image

Car Dealerships Are Being Disrupted By A Multi-Day Outage After Cyberattacks On Software Supplier

Several major automakers, including Stellantis, Ford, and BMW, reported to The Associated Press on Friday that the CDK outage had affected some of their dealers, but sales activities will continue.

In view of the current scenario, a Stellantis spokeswoman stated that many dealerships have moved to manual processes to assist consumers, including writing orders by hand.

A Ford representative stated that the disruption could result in “some delays and inconveniences at some dealers and for some customers.” However, many Ford and Lincoln customers continue to receive sales and service support through other avenues used at dealerships.

With many elements of the intrusions still unknown, client privacy is a primary priority, especially because little is known about what information may have been hacked this week.

dealerships

Dealerships | WSJ Image

Car Dealerships Are Being Disrupted By A Multi-Day Outage After Cyberattacks On Software Supplier

In a statement to the Associated Press on Friday, Mike Stanton, president and CEO of the National Automobile Dealers Association, said that “dealers are very committed to protecting their customer information and are actively seeking information from CDK to determine the nature and scope of the cyber incident so they can respond appropriately.”

SOURCE – (AP)

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AmEx Buys Dining Reservation Company Tock From Squarespace For $400M

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AmEx | Fast Company Image

NEW YORK — American Express will pay $400 million for Squarespace’s Tock meal reservation and event management software.

AmEx began making dining and event purchases five years ago with the purchase of Resy, which provided cardmembers with access to difficult-to-find restaurants and locations.

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AmEx | AP News Image

AmEx Buys Dining Reservation Company Tock From Squarespace For $400M

Other credit card difficulties have done the same thing. JPMorgan bought The Infatuation as a lifestyle brand in 2021.

Tock, founded in Chicago in 2014 and owned by Squarespace since 2021, offers reservation and table management services to about 7,000 restaurants and other venues.

Amex

AmEx | Yahoo Image

AmEx Buys Dining Reservation Company Tock From Squarespace For $400M

Tock has signed on restaurants such as Aquavit, a high-end Nordic restaurant in New York, and Chez Noir, a buzzy new restaurant in California.

Squarespace and Tock confirmed the acquisition on Friday.

AmEx’s purchase of Resy five years ago raised many heads in the credit card and dining industries. Since then, it’s become an important component of how the corporation secures high-end merchants to be AmEx-exclusive or to provide AmEx cardmembers with special treatment.

Amex

AmEx | Eat App Image

AmEx Buys Dining Reservation Company Tock From Squarespace For $400M

The number of eateries on the platform has increased fivefold.

AmEx also announced Friday that it will acquire Rooam, a contactless payment technology widely used in stadiums and other entertainment events. AmEx did not disclose the amount it paid for Rooam.

SOURCE – (AP)

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Under Armour To Pay $434 Million To Settle Lawsuit Over Sales Disclosures

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Under Armour | Retail Points Image

Under Armour announced on Friday that it has agreed to pay $434 million to settle a 2017 class action lawsuit. The lawsuit alleges that the sports clothing company deceived shareholders about its revenue growth to meet Wall Street expectations.

The proposed settlement, subject to court approval, avoids a trial scheduled for July 15 in Baltimore federal court.

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Under Armour | Under Armour Image

Under Armour To Pay $434 Million To Settle Lawsuit Over Sales Disclosures

The shareholder lawsuit accused apparel firm CEO Kevin Plank of purposefully deceiving them about the company’s financial condition.

In 2021, the Baltimore-based corporation agreed to pay $9 million to settle Securities and Exchange Commission (SEC) claims of misleading investors about its revenue growth.

The SEC’s inquiry discovered that Under Armour failed to disclose to investors that it used a sales strategy to accelerate or “pull forward” a total of $408 million in existing orders in the second half of 2015.

under armour

Under Armour | CNN Image

Under Armour To Pay $434 Million To Settle Lawsuit Over Sales Disclosures

Mark Solomon, lead counsel for the shareholders and a partner at litigation firm Robbins Geller Rudman & Dowd, described the proposed settlement as an “important win,” highlighting pension funds’ critical role in keeping firms accountable.

Under Armour stated that it aims to pay the $434 million settlement with cash and rely on its $1.1 billion revolving credit facility.

In a regulatory statement, the business also stated that it has agreed to keep the roles of chairman and CEO distinct for at least three years.

under armour

Under Armour | Under Armour

Under Armour To Pay $434 Million To Settle Lawsuit Over Sales Disclosures

Under Armour stated that the company has repeatedly refuted the charges and engaged in this agreement in principle, which does not constitute an acknowledgment of fault or misconduct.

The business expects its total accrual in legal proceeding contingencies linked to the case to be $434 million in the first quarter of 2025, up from $100 million at the end of fiscal year 2024.

SOURCE – (CNN)

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