Large Consumer Companies Start to Quantify Impacts of Coronavirus
Some large retailers and brands began to warn investors about how the coronavirus is impacting business, and several industry brands are cancelling events.
Vans said it is cancelling all Vans-owned events globally for two weeks and will continue to monitor the situation.
“As a global brand focused on connecting with our consumers around the world through experiences and spaces that bring their creativity to life, Vans will always prioritize the health and wellbeing of our consumers and staff. Therefore, in light of recent health measures, we’ve decided to cancel all owned Vans events globally. We are closely monitoring the situation and will continue to evaluate all upcoming events with the health and wellbeing of our Vans Family top of mind. We will share updates when available,” the company said in a statement.
Volcom and Stab have also postponed Electric Acid Surfboard Test premieres around the world, according to a post on Volcom’s Instagram account, including events in Southern California, the East Coast, and Hawaii.
“We are taking things on a case-by-case basis daily, but in general the majority of Volcom owned events have been postponed or canceled globally for the rest of the month,” Volcom CMO Ryan Immegart told SES.
Meanwhile Urban Outfitters warned sales have slowed in areas heavily impacted by the virus.
“Over the past week, we have seen a decline in store traffic and sales in areas heavily impacted by COVID-19 such as Milan, Italy and Seattle, Washington, as well as a few additional locations,” Urban Outfitters said in a statement released Wednesday morning. “We have not seen a significant impact to stores in other locations or to our digital channel. Due to the uncertainty around the spread of COVID-19 in North America and Europe, at this time, we cannot forecast the extent to which COVID-19 will impact our business in the first quarter.”
Adidas and Puma painted a grim picture of how their businesses have been impacted in China and what that could mean for other regions of the world given the spread of the virus.
Even though the situation in China is starting to improve a bit, Adidas said it expected Q1 sales to drop by up to €1 billion euros ($1.1 billion) in greater China. And now the company is seeing slowing sales in Japan and South Korea.
Puma said it no longer expected its business would return to normal soon, despite some positive signs in China, and withdrew its earnings guidance that it gave about a month ago.
“Given the duration of the situation in China, the negative impact in other Asian countries and now also the spread to Europe and the U.S., we unfortunately have to conclude that a short-term normalization will not occur,” it said.
Dick’s Sporting Goods
However, Dick’s Sporting Goods, which reported very strong sales and earnings in Q4 and for the full year, said Tuesday it has not yet seen a big drop off in the Pacific Northwest, an area hard hit by the virus.
But CEO Edward Stack told analysts during a conference call that the situation is very fluid.
“Like everyone else, we really have no idea,” he said. “I don’t think we’ve ever seen anything like this in a very, very long time. We’re hoping for the best, but we know that is very uncertain out there and we can’t predict what is going to happen.”