Feb 20, 2020 - Economy

Coronavirus outbreak slams companies' 2020 sales projections

Dion Rabouin

A man and a child walk past a closed Apple store in Shanghai on Feb. 20. Photo: Yifan Ding/Getty Images

The coronavirus outbreak already is eating into companies' 2020 plans, with a number of firms announcing significant expected hits to their sales.

What's happening: After warning that it would need to write down its revenue expectations, a new report from Nikkei says Apple's iPhone inventories could remain low until April or longer and that suppliers are "currently operating at around 30% to 50% of capacity."

Adidas also said Wednesday that its business in and around China had dropped by about 85% year over year since Jan. 25.
Puma added that it expected the virus to hit sales and profits in the first quarter but still hoped to reach its 2020 targets.

What they're saying: "Retail in February is destroyed," Puma CEO Bjørn Gulden said in a statement. "We don’t know yet about March. We are doing everything we can to stay open."

Flashback: About 40% of companies that have reported earnings have cited the term “coronavirus,” and about a quarter of those have modified guidance due to the virus.

On the other side: “An aggressive response to the crisis [by the Chinese government] seems to be helping contain the epidemic,” Jefferies analyst James Grzinic told Reuters.

“[T]his would suggest that a tough first quarter should be followed by a strong recovery in the second quarter and beyond.”

Go deeper: Coronavirus may be "at the brink" of a global pandemic

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Coronavirus outbreak slams companies' 2020 sales projections

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