Tapestry Inc. is the latest fashion firm to bemoan a hit in its business due to the coronavirus.
The New York-based company — parent to Kate Spade, Coach and Stuart Weitzman — warned about the deadly outbreak’s impact on its second-half results, expecting a $200 million to $250 million dent in sales and a reduction in earnings per share of 35 cents to 45 cents. It downwardly revised its guidance, now projecting full-year revenues of roughly $5.9 billion and EPS in the range of $2.15 to $2.25.
“We had anticipated maintaining our fiscal-year guidance despite continuing headwinds in Hong Kong and challenges at Stuart Weitzman. However, the escalating coronavirus outbreak is now significantly impacting our business in China, resulting in the closure of the majority of our stores on the mainland,” said chairman and CEO Jide Zeitlin. “If the situation further deteriorates, or the outbreak affects demand outside of the country, this impact could be worse.”
Other brands like Nike, H&M and Adidas have also closed their outposts in the country to help curb the spread of the illness. Factories and corporate offices in China have also stalled operations, while several U.S.-based trade shows have been postponed amid widespread travel restrictions.
“Our primary concern is the health and well-being of our team, their families and their local communities who are dealing with the daily reality of this situation,” Zeitlin added. “We believe in the resilience of the Chinese people, and our view that China represents a significant opportunity for our brands is unchanged.”
While it cautioned of coronavirus-induced headwinds, Tapestry delivered a second-quarter earnings and sales beat, posting adjusted EPS of $1.10, versus consensus bets of 99 cents, on profits of $298.8 million. Revenues rose 1% to $1.82 billion, compared with estimates of $1.81 billion.
At market open, the company’s stock was up nearly 3% to $29.16.
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