Grave expectations: Virus spooks ASX firms
Wesfarmers has warned shoppers are cutting back on clothing and other items as the coronavirus outbreak forces more ASX-listed firms to abandon their financial outlooks.
The Aussie conglomerate, which owns Bunnings, Kmart and Officeworks, on Friday said the uncertainty of the coronavirus meant it could not estimate its impact on full year financial results.
Sales of discretionary products such as clothing had been weaker in recent days, Wesfarmers said.
Target was particularly affected.
Management expect this pattern to continue, which poses a risk to retail sales across the group.
There would be extra costs in responding to the virus, and in selling goods due to the lower Australian dollar.
The grim picture comes despite some panic buying of essential items at Bunnings and Officeworks.
There had been significant demand for cleaning and hygiene products, home office equipment and technology, and education supplies, Wesfarmers said.
Panic buying of goods has also fuelled expectations of increased sales at listed supermarkets Coles and Woolworths during the period.
A host of listed companies have withdrawn their earnings outlook this week after the Australian government tightened restrictions on movement to limit the virus' spread.
A ban on foreigners entering Australia, and limits on how many people may gather in one place, have changed daily life.
The effects have devastated business, including the education, tourism and hospitality sectors.
Wesfarmers' warning on retail trade came after shopping centre owner Vicinity Centres ditched its earnings guidance for shareholders.
Vicinity owns 59 centres across Australia, including Chatswood Chase in Sydney and Altona Gate in Melbourne.
Chief executive Grant Kelley said retail trade had deteriorated since Vicinity published its interim results in February.
Vicinity has also suspended its on-market securities buy-back program.
Rival property firm Scentre Group said operations have performed in line with expectations during the early part of 2020 but is still suspending its previously announced outlook.
Michael Hill Jeweller has been forced to close stores in Canada for two weeks following government advice there.
Like many businesses, the jeweller has postponed non-essential spending, hiring and travel.
Troubled building materials firm Boral has suspended guidance and is undertaking measures to respond to the expected demand interruptions and to conserve cash, including reducing all non-essential capital expenditure and discretionary spending.
Outdoor advertiser oOh!media has entered a trading halt pending an announcement, having already withdrawn earnings guidance.
Carsales.com and Sonic Healthcare also withdrew their outlooks on Friday.
Crown Resorts entered a trading halt as it seeks clarity from the Victorian Government on the social quarantining measures at its venues.
Meanwhile, the virus outbreak government counter-measures are causing an unprecedented surge in demand for Marley Spoon's home delivered meal kits in all markets.
"Customers are staying home and want to cook for their families," Marley Spoon chief executive Fabian Siegel said.
"We are dedicated to upholding the strictest food safety standards so that our meals are delivered safely and reliably every week".
Real estate advertiser Domain Holding said it had experienced a material improvement in its residential business following a soft start to the second half of FY20 but was uncertain of its outlook.
There were 756 confirmed COVID-19 cases and seven deaths in Australia by 1400 AEDT on Friday.
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