Ralph Lauren warns coronavirus could cost $70m in sales

Ralph Lauren has warned that the coronavirus could cost the company up to $70m in sales and that the impact would be heavier if the situation deteriorates.

In an update the high-end brand said it had closed about two-thirds of its 110 mainland China stores in the past week to protect the health of employees and customers. The US company said it expected further impact in China and Asia because of reduced travel and retail spending.

In the fourth quarter of the financial year sales in Asia will be $55-70m lower than expected with a hit to operating income of $35-$45m based on trends in China, Japan and Korea, the company said.

"These estimates could materially change if there is meaningful deterioration from current trends," the maker of polo shirts and other clothing said. "Supply chain disruptions in China could also impact a small portion of the company’s fourth quarter orders globally."

The company's shares were down 1.9% to $121.38 at 11:17 in New York.

Ralph Lauren said on 4 February it expected net revenue to rise by 2-3% in the current financial year but that the guidance did not include the potential impact of coronavirus. At the time it had closed about half its stores in China.

The coronavirus outbreak has forced retailers such as Nike and Capri to shut outlets or reduce working hours in China. Burberry warned on 7 February that the disease was damaging its sales in China.

“Our hearts are with the many impacted by this virus. Our number one priority is keeping our teams, partners and consumers safe,” Ralph Lauren, Ralph Lauren's chairman and founder, said.