Coronavirus outbreak slams companies' 2020 sales projections
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.”