Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Levi's shuts half its China stores on coronavirus outbreak, expects financial hit

Stock MarketsJan 30, 2020 05:14PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Products are displayed at a Levi Strauss store in New York

By Uday Sampath Kumar and Aditi Sebastian

(Reuters) - Levi Strauss & Co (N:LEVI) has shut about half of its stores in China due to the outbreak of a new coronavirus and will take a near-term financial hit as a result of the epidemic, Chief Financial Officer Harmit Singh said on Thursday.

This comes a few months after Levi's opened its largest store in China in the city of Wuhan, the epicenter of the coronavirus epidemic which has killed about 170 people, marring its plans to tap into the city's 11-million strong population.

"It will put a dampener on our growth objectives in the near term," Singh told Reuters in an interview about the store closures in China, which contributes about 3% to the company's revenue.

The flu-like virus has set-off alarm bells across the globe, with companies such as Starbucks Corp (O:SBUX) and Tesla Inc (O:TSLA) warning of a financial hit from slowing business in the world's most populous country. Earlier this week, Starbucks also said it closed about half its stores in China.

Levi's has also stopped all employee travel in and out of China.

Singh said the coronavirus impact was not baked into the company's full year forecast, but will be quantified when it reports first quarter results in April.

Levi's forecast 2020 earnings above estimates, boosted by demand for women's apparel in its own stores and online, sending shares up 3% for the company which returned to public markets last year.

Singh pointed to the strong start to 2020 fiscal year, saying Levi's had "hit the ground running" during the crucial holiday shopping season.

The company missed fourth quarter revenue estimates, hurt by plunging sales at department stores and protests in Hong Kong which dented demand in the Asian shopping hub.

Fourth quarter net revenue fell 1.4% to $1.57 billion, compared with analysts' estimates of $1.58 billion, according to IBES data from Refinitiv.

Adjusted net income fell 9% to $108 million, or 26 cents per share, in the quarter ended Nov. 24, beating expectations of 21 cents per share.

The company forecast adjusted 2020 profit of $1.18 per share to $1.22 per share above Wall Street estimates of $1.17.

Levi's shuts half its China stores on coronavirus outbreak, expects financial hit
 

Related Articles

Global automakers face electric shock in China
Global automakers face electric shock in China By Reuters - May 25, 2022

By Norihiko Shirouzu BEIJING (Reuters) - If global automakers think they can extend their dominance in China into the electric era, they may be in for a shock. Kings of the...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email