Canada Goose Holdings Inc. (TSX:GOOS) has been hit with the coronavirus.
The company, which makes the popular line of Canada Goose jackets and apparel, said Friday that it now forecasts a hit to its annual profit and revenue as the coronavirus outbreak in China hurt its manufacturing and store traffic.
The announcement sent shares of the luxury apparel maker down 7% in early trading Friday. The virus outbreak has hurt global luxury brands that have been betting on the spending power of Chinese shoppers by investing heavily to open new stores and beef up their online presence. It has also hurt companies that manufacture a good deal of their products in China.
Many retailers, including Coach handbag maker Tapestry and Ralph Lauren have shut stores following the health emergency, forcing them to cut their forecasts as well.
Canada Goose, which generates about a fifth of its revenue from Asia and sells $1,000 parkas and hoodies, said the travel restrictions imposed in Europe and North America have hurt demand from tourists.
In the third quarter that ended before the virus outbreak, Canada Goose nearly doubled its revenue from Asia, helping overall revenue rise 13.2% to $452.1 million, and beating Wall Street estimates of $448.18 million.
However, the company now expects revenue growth to slow to between 13.8% and 15% for fiscal 2020, compared with its prior forecast of at least 20% growth. That translates to $945 million to $955 million, a hit of up to $51.6 million. Analysts were expecting $1.03 billion, according to IBES data from Refinitiv.
It forecast full-year adjusted profit growth to be in the range of a 2.2% decline to 0.7% rise from a year earlier, much lower than its previous forecast of at least 25% growth. The new forecast of $1.33 per share to $1.37 per share is below the average analysts’ estimate of $1.68.