Canada Goose and Estee Lauder gloomy forecasts amid Covid curbs in China
Coat maker Canada Goose and make-up seller Estee Lauder both issued stark sales warnings yesterday due to Covid curbs in China.
It comes as Chinese authorities have set out a seven-day lockdown in Zhengzhou, impacting the world’s largest iPhone factory.
Canada Goose said yesterday that it was slashing its full-year revenue forecast due to pandemic-linked measures impacting luxury parka sales in China.
It cut its fiscal 2023 sales expectation to a range of $1.2-1.3bn Canadian dollars, down from $1.3-1.4bn.
However, demand for luxury products had continued to remain strong ahead of the holiday season, outside of China, according to chief executive officer Dani Reiss. This was despite historic levels of inflation.
Elsewhere, Estee Lauder said it anticipated its full-year 2023 net sales would plunge between six and eight per cent , compared with the prior forecast of a three to five per cent growth.
“Covid-19 restrictions in China presented a greater challenge than expected,” the New-York listed company said in a trading statement published yesterday morning. It tends to generate around one third of its revenue from China.
It also said it expected a decrease in net sales in the current quarter of between 17 per cent to 19 per cent.
Bosses of the cosmetics giant told analysts yesterday that prices on make-up products would continue to be lifted due to inflation.
Executives said they were looking at hiking prices in January or February by a larger than anticipated percentage.
Analysts said the company would be impacted by shoppers trading down and opting for cheaper make-up products, placing it in a vulnerable position.
CityA.M. reported this week that Apple’s main mobile maker Foxconn is preparing to shift production to other parts of China while sources told Reuters that iPhone production could slump as much as 30 per cent following the factory disruption.
The main plant in Zhengzhou employs over 200,000 people and has been under increasing pressure to stamp out spiralling Covid numbers.