Lululemon Athletica (STAR)
LULU - Nasdaq
Mirror, mirror, on the wall, who made the worst acquisition of all? When Lululemon spent US$500-million to acquire fitness startup Mirror in 2020, it was hoping to capitalize on the booming home workout trend sparked by the pandemic. But with sales of home exercise equipment falling as people return to gyms and in-person fitness classes, Lululemon slashed the value of its Mirror investment – now called Lululemon Studio – by US$442.7-million this week. Investors aren’t sweating the writedown too much, however. Thanks to strong demand for its athleisure wear, Lululemon’s fourth-quarter revenue soared 30 per cent, and its full-year sales and earnings forecasts also surpassed estimates, making the stock look fit and toned – despite the mirror mishap.
UniFirst (DOG)
UNF - NYSE
Business quiz! Shares of UniFirst, a supplier of work uniforms and protective clothing, fell after a) an online conspiracy theory alleged that the World Economic Forum would soon force everyone to wear grey coveralls with a unique barcode sewn onto the sleeve for tracking purposes; b) the company took a US$100-million charge after recalling thousands of fast-food uniforms it had mistakenly printed with the logo “FCK” instead of “KFC”; c) UniFirst’s fiscal second-quarter earnings missed estimates, hurt by higher costs, and its full-year outlook also disappointed Wall Street. Answer: c.
Dollarama (STAR)
DOL - TSX
“Honey, can you pick up another case of ramen noodles at Dollarama?” As prices for groceries and household items soar, more consumers are trying to stretch their budgets by shopping for bargains at the dollar store. Shares of Dollarama rose after same-store sales leaped 15.9 per cent for the fourth quarter ended Jan. 29 – boosted by food products, seasonal items and general merchandise – and earnings per share topped expectations. With Dollarama hiking its dividend by 28 per cent, investors are skipping the noodles and upgrading to a striploin steak.
Virgin Orbit Holdings (DOG)
VORB - Nasdaq
In January, one of Virgin Orbit’s rockets carrying satellites into space malfunctioned and plunged into the ocean. This week, it was Virgin Orbit’s stock that came crashing back to Earth. After majority owner Richard Branson refused to provide additional funding and the rocket maker failed to secure other investors, the company said it is ceasing operations “for the foreseeable future” and laying off most of its 775 employees. With shares of the company – which was spun off from Mr. Branson’s Virgin Galactic in 2017 – down about 97 per cent in the past year, investors are learning about gravitational forces in more ways than one.
Bed Bath & Beyond (DOG)
BBBY - Nasdaq
Knock knock.
Who’s there?
Dwayne.
Dwayne who?
Dwayne the bathtub, I’m dwowning.
Shares of Bed Bath & Beyond were deeply under water after the retailer, which is scrambling to raise equity to avert a bankruptcy filing, said its comparable sales are expected to tumble 40 per cent to 50 per cent in its most recent quarter. Judging by the stock’s 98-per-cent collapse in the past year, plenty of investors have already pulled the plug.
John Heinzl