Please ensure Javascript is enabled for purposes of website accessibility

Ralph Lauren Estimates a $70 Million Impact From Coronavirus Store Closures

By Demitri Kalogeropoulos - Feb 13, 2020 at 10:24AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The retailer closed the majority of its stores in China this week.

Ralph Lauren (RL -1.63%) sees mounting costs from the spread of the coronavirus in China and the related closures of its retailing points in the country. The retailer said on Thursday that roughly two thirds of its stores in the country have been closed over the past week and that more closures, both in China and in other parts of Asia, are expected to hurt the business  this year.

A man holding shopping bags.

Image source: Getty Images.

What's the impact?

In contrast to its early February earnings report, Ralph Lauren now knows enough to reasonably estimate the financial hit from the coronavirus outbreak and related travel restrictions. The current quarter's sales will be lowered by between $55 million and $70 million, executives said. Profits will be pressured by as much as $45 million in the Asia segment that accounts for just under 20% of the retailer's global sales and a large portion of its manufacturing base. "Our number one priority is keeping our teams, partners and consumer safe," executive chairman Ralph Lauren said in a press release.

Looking ahead

The quickly changing facts on the ground in China make it nearly certain that the retailer will need to issue further adjustments to its 2020 outlook. The apparel specialist promised a comprehensive update to its financial targets when Ralph Lauren posts fiscal fourth-quarter results in May.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Ralph Lauren Corporation Stock Quote
Ralph Lauren Corporation
$98.30 (-1.63%) $-1.63

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/16/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.