Apparel giant PVH Corp has temporarily closed the majority of its Calvin Klein and Tommy Hilfiger stores in China amid the coronavirus outbreak.
In a statement, the company says the stores that remain open are operating for limited hours and are experiencing significantly lower than planned traffic and sales trends.
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By GlobalDataCEO Emanuel Chirico said the group is “closely monitoring” the situation in China, which has seen a number of retailers close doors across the country.
Greater China is expected to account for about 7% of PVH’s 2019 revenue, while the Asia Pacific region is anticipated to account for about 16%. In addition, approximately 20% of the group’s global sourcing is derived from China, including about 10% of sourcing inbound to the US.
Despite the situation, PVH has reaffirmed its guidance with respect to earnings per share on a non-GAAP basis, which is expected to be at least US$1.79 for the fourth quarter 2019 and at least $9.45 for the full year 2019.
“The company believes that it would have exceeded its non-GAAP earnings guidance had the coronavirus outbreak not occurred during the last two weeks of its fiscal year,” it says.
Chirico adds: “While the coronavirus will impact our businesses in the near-term, our long term growth opportunities across the Asia Pacific region are significant. Given our diversified, global business model and the strength of our iconic brands, we are well-positioned to manage this period of uncertainty. We will provide an operational and financial update on our upcoming fourth quarter and full-year 2019 earnings call.”
Meanwhile, PVH says it currently expects its earnings per share on a GAAP basis for the fourth quarter and full-year 2019 will be lower than its guidance previously announced on 9 January, due to an actuarial loss expected to be recognised on its retirement plans.
The group has forecast earnings per share on a GAAP basis to be down by approximately $0.20 for the fourth quarter of 2019 and about $6.32 for the full year 2019.
In its most recent trading update, PVH booked a mixed third-quarter as sales grew but earnings dropped as the company warned of headwinds going forward. Earnings were down 13.9% to US$209.2m, while revenues increased 3% to $2.6bn.
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