Wolford revises outlook on coronavirus as Italian sales plunge
Under-pressure upscale hosiery and bodywear company Wolford has become the latest big name to react to the coronavirus outbreak, and has revised its outlook sharply downwards.
Late on Wednesday it said that “the management board of Wolford AG has analysed the effects of the increasing spread of the coronavirus and expects this global epidemic to have a significant negative impact on the development of sales and earnings of the Wolford Group”.
The firm seems to have been hit “particularly hard” in Italy, which is no surprise given the severity of the outbreak there. Almost all shops in the country have now been closed as a result of soaring infection and mortality rates.
Wolford said its sales there have fallen by about 50% in the last two weeks. And it added that sales in Germany, Austria and Switzerland, which are key markets for the brand, have been plunging too.
While those countries haven’t seen infection or death rates anywhere close to those of Italy, sales in the region have fallen by around 30% in the past fortnight.
“These negative effects are expected to have [an] impact on the new fiscal year 2020/21,” the company said. That year starts on May 1. “Against this backdrop, the management board has corrected its outlook and no longer expects a positive operating result (EBIT) for the 2020/21 financial year,” it added.
And “in view of the current uncertainties”, the board doesn’t want to commit itself further to how the year might turn out. It “will await the further course of the epidemic and its economic consequences before presenting a new medium-term outlook”, it said.
It must be a huge disappointment for the firm that has been battling tough conditions and seeking to return to profitability. Last July it has said it expected to generate positive operating earnings again in the 2020/21 financial year.
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