Caleres Braces for Impact as China Factories Remain Closed Amid Coronavirus
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Caleres Inc. is bracing for the impact of the coronavirus as factories in China remain closed.
The St. Louis-based firm announced today that it was closely monitoring the outbreak’s potential hit on its business. Caleres’ sourcing from the country is down from 85% five years ago, but 60% of its footwear imported to the United States continues to be manufactured in China.
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“The near-term impact will ultimately depend on the duration of the delays in Chinese factory openings,” the company wrote, “and how quickly the supply chain can return to normal operations.”
More than 64,000 people around the world have been sickened by the coronavirus, which has led to 1,384 deaths. Government officials in China have attempted to quell the spread of the illness by reducing travel within the country, as well as keeping retail stores closed and stalling operations at factories.
Along with today’s announcement, Caleres reported preliminary fourth-quarter results: It estimated a 3% drop in sales to $700 million. (Analysts are anticipated revenues of $752.87 million.)
Its brand portfolio — which comprises Sam Edelman, Vionic, Via Spiga, Dr. Scholl’s and more — is forecasted to bring in sales of roughly $346 million, down 9%. Revenues at leading banner Famous Footwear, on the other hand, is predicted to be $370 million, with same-store sales up 5.1% in Q4.
“During the fourth quarter, we saw continued shifts in the underlying fashion footwear market,” added chairman, president and CEO Diane Sullivan. “However, holiday sales at a number of our retail partners were disappointing, and our selling in the value channel has been difficult. Retail partners continue to tightly manage inventory levels and limit reordering and replenishment.”
Caleres is set to post fourth-quarter and full-year earnings as well as provide an outlook for the full year at market close on March 12.
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