What's happening

Shares of Canada Goose Holdings (GOOS) are down sharply on Wednesday as analysts and investors grapple with the possibility of a widespread outbreak of the novel coronavirus in North America and Europe.

As of 2:30 p.m. EDT, Canada Goose shares were down 9.8% from Tuesday's closing price.

So what

Canada Goose sells its trademark down-filled coats and other outerwear through its own stores and upscale retailers around the world. What happens to sales and margins if brick-and-mortar foot traffic falls sharply when consumers stay home in response to the virus pandemic? What happens if stores close? What happens if the pandemic tips the economies of the U.S. and Europe into recession?

A Canada Goose store in Hong Kong.

Image source: Canada Goose Holdings.

These are the questions that analysts are grappling with now, as it looks increasingly likely that the U.S. and much of Europe will be hit to some degree by the pandemic. 

Now what

These questions aren't new ones for Canada Goose investors, but the implications are growing as the virus spreads around the world. Back in February, Canada Goose CFO Jonathan Sinclair warned that the company was facing an "immediate and negative material impact" from the outbreak of the coronavirus in China.

 At the time, Sinclair cut the company's guidance for the fiscal year that will end on March 31, saying that sales growth for the year will be more like 15% than the 20% he had previously forecast and that profit per share could fall slightly from the year prior. 

Now, as COVID-19 cases in the U.S. and Europe are starting to rise, investors are looking to places like Italy and South Korea and asking what the next couple of quarters might look like. The stock is down today because the answers aren't reassuring.