- Prachi Singh |
Following the coronavirus outbreak in China and related government restrictions, PVH Corporation has announced that the group has temporarily closed majority of the total Calvin Klein and Tommy Hilfiger stores in China. The company said in a statement, stores that are open are operating for limited hours and are experiencing significantly lower than planned traffic and sales trends.
Greater China is expected to account for approximately 7 percent of the company’s 2019 revenue and the Asia Pacific region is expected to account for approximately 16 percent of the total revenue. Additionally, the company added, approximately 20 percent of the company’s global sourcing is derived from China, including approximately 10 percent of sourcing inbound to the US.
Commenting on the update, Emanuel Chirico, Chairman and Chief Executive Officer of the company said: “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.”
The company 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 January 9, 2020 due to an actuarial loss expected to be recognized on its retirement plans in the fourth quarter of 2019, primarily resulting from a decrease in the discount rate in the latter part of January 2020. PVH further said that although its earnings guidance announced on January 9, 2020 did not contemplate the coronavirus outbreak, the company is reaffirming its guidance with respect to earnings per share on a non-GAAP basis, which is expected to be at least 1.79 dollars for the fourth quarter and at least 9.45 dollars for the full year. 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.