Companies feel impact of coronavirus outbreak in China

Published February 5, 2020, 12:00 AM

by manilabulletin_admin

By Reuters

Companies around the world have warned that a coronavirus outbreak in China could disrupt supply chains or hurt their bottomlines as factories and shops shut and airlines suspend flights.

A worker uses a thermometer to check the temperature of a customer as she enters a Starbucks shop as the country is hit by an outbreak of the new coronavirus, in Beijing, China January 30, 2020. (REUTERS/Carlos Garcia Rawlins / MANILA BULLETIN)
A worker uses a thermometer to check the temperature of a customer as she enters a Starbucks shop as the country is hit by an outbreak of the new coronavirus, in Beijing, China January 30, 2020. (REUTERS/Carlos Garcia Rawlins / MANILA BULLETIN)


Apple gave a wider-than-usual revenue outlook range for the March quarter to factor in uncertainty. Apple, which has suppliers in Wuhan, the central Chinese city at the heart of the outbreak, said the reopening of some suppliers’ factories outside Wuhan had been moved to Feb. 10 from the end of January.

Baidu postponed the announcement of its fourth-quarter results.

Carlsberg expects the virus to hurt business, but said it was too early to give an estimate.

Electrolux said the epidemic could have a material impact if its Chinese suppliers were further affected and it was implementing contingency plans.

Foxconn’s shipments to customers, including Apple, could be disrupted if a Chinese factory halt extends into a second week, a source said, adding that Foxconn has halted almost all its production in China.

H&M said store closures in China – about 45 – hurt sales in January. The company said its flexible supply chain had limited disruptions.

Jaguar and Land Rover parent Tata Motors expects the outbreak to hamper production in China and hit profits.

Levi Strauss shut about half its stores in China and said it would take a near-term hit.

LG Display said it had not closed any factories in China but warned the outbreak increased uncertainty for suppliers.

McDonald’s, which closed several hundred of its roughly 3,300 outlets in China, said the overall impact on profits would be “fairly small” if the virus stayed contained in China.

Japanese trading house Mitsui expects manufacturing activities to slow in automobile and other sectors, and possibly reduce steel product demand.

Pandora said the virus had led to an unprecedented decline in consumer traffic in China and Hong Kong and it was unable to estimate impact immediately.

Remy Cointreau warned that a potential impact from the outbreak would be significant because of its big exposure to China.

Royal Caribbean Cruises, which canceled three trips of its China-based cruise liner, trimmed its 2020 earnings forecast, warning of a further hit if travel curbs continued until the end of February.

Samsung Electronics (005930.KS) extended a holiday closure for some factories in line with Chinese government guidance but declined to comment on the impact.

Samsung affiliate and battery maker Samsung SDI, which counts Volvo among its customers, warned of a hit to its March-quarter earnings.

Sony , which raised its annual profit outlook, said impact from the virus could offset the revision.

SK Hynix, which has a chip plant in the eastern Chinese city of Wuxi, said the outbreak had not disrupted production but that could change if the situation was prolonged.

Starbucks, which closed more than half its roughly 4,300 stores in China, delayed a planned update to its 2020 forecast and said it expected a material but temporary hit.

Tesla warned a 1- to 1-1/2-week delay in the ramping up of production of its Shanghai-built Model 3 cars could slightly hurt March-quarter profit after China ordered a shutdown of the factory. Tesla is also evaluating whether the supply chain for cars built in its California plant will be affected.

Royal Caribbean expects the cancellations to trim its first-quarter earnings by 25 cents per share, but added there were too many uncertainties to make a good estimate of impact.

Ferrari CEO says company can offset weakness in China if it is for a few months, and is more worried about Hong Kong, as business in the Chinese-ruled city is “very soft”.

AT&S cut its revenue forecast by around 7% for the year to March 31, saying production in China was affected by the virus spread.

Nike warned of a financial impact after it closed about half its own stores in China and cut operating hours at the rest.

Walt Disney said the closure of its Shanghai park could hurt operating income in the second quarter by $135 million, if it is shuttered for two months.

Japanese pub chain Watami Co Ltd is withdrawing from mainland China due to worries about a prolonged epidemic.


Companies including Apple, Alphabet’s Google and Deere temporarily closed facilities in China.

Fast Retailing closed about 280 of its 750 Uniqlo stores in China.

Haidilao shut restaurants and IKEA closed its stores in China. Burger King shut some restaurants.

Hyundai Motor said it would suspend production in South Korea due to the outbreak disrupting parts supply, the first major automaker to do so outside of China.

Swatch closed five stores in Wuhan, Yum China closed some KFC and Pizza Hut stores in the city, Luckin Coffee closed its cafes and AB Inbev suspended production at its brewery.

Toyota Motor shut factories in China through Feb. 9.

Ralph Lauren has shut about half of its 110 stores in China.

Restaurant Brands International says some Burger King restaurants in mainland China have been temporarily closed.

Tiffany has temporarily closed several stores in affected areas in China.

Gap has closed its China headquarters and is adjusting operating hours of stores, including closures and shortened working hours for a small number.

Hugo Boss is temporarily closing some of its stores in China, with the rest to cut trading hours.


Hyatt and Shangri-La said they would allow travelers from China to cancel hotel bookings for free through Feb. 29.

InterContinental Hotels said it would allow customers to cancel for free reservations made for China for specific dates..

Ctrip, China’s largest online booking platform, said more than 300,000 hotels on its platform had agreed to refunds on bookings between Jan. 22 and Feb. 8.

Fliggy, Alibaba’s booking site, offered similar refunds, as did several Chinese and European tour operators.

Royal Caribbean warned of more cruise cancellations after calling off eight trips out of China through March 4.