Canada Goose expects a C$51.6 million hit to its revenue in fiscal 2020 ascribed to the Coronavirus outbreak

Canada Goose Holdings announced on Friday that its stores in China are struggling with sharply declining traffic owing to the recent outbreak of Coronavirus. The health emergency, the company added, has also affected the sales at domestic stores due to broader travel restrictions. According to Canada Goose, the virus crisis is expected to weigh heavily on its performance in fiscal 2020. Following the announcement, shares of the company were reported trading 4% lower on Friday.

Ralph Lauren And Capri Holdings Closed Stores In China Amidst The Coronavirus Crisis

Canada Goose has now joined a list of luxury fashion brands including Ralph Lauren and Capri Holdings that have estimated a significant impact of the virus outbreak on the company’s performance this year. Ralph Lauren and Capri Holdings have also shut the stores in China for as long as the virus is not contained. The disruption in business operations, therefore, fueled the poor performance forecast in 2020.

Canada Goose now expects a growth of around 13.8% to 15% in its revenue this year. In 2019, the company had recorded a much higher 20% growth in its revenue. The company estimates its revenue at C$945 million to C$955 million that will mark a massive C$51.6 million hit in 2020.

The winter clothing manufacturer had previously estimated a 25% growth in its adjusted profit in 2020. Following the coronavirus outbreak, the company has now curtailed the adjusted profit growth forecast for this year to a broad range of 2.2% decline to a gain of 0.7%.

Canada Goose’s Performance In The Stock Market

On the earnings front, the company highlighted that it expects to make C$1.33 to C$1.37 of earnings per share in fiscal 2020. The figure was reported significantly lower than the analysts’ estimate of C$1.68 of earnings per share this year.

Canada Goose’s performance in the stock market has remained challenged in 2020 so far. The stock opened the year at around C$46. Following the drop on Friday, the stock is currently exchanging hands at around $42 per share that marks an over 8% decline year to date.

Performance in 2019 was largely downbeat as well. Canada Goose had started the year much higher at around C$58 in the stock market in January 2019. Towards the end of the year, however, it had dropped steeply to around C$48 that marked an 8% yearly decline.