Nike Inc (NYSE:NKE) announced plans to close its retail stores across the United States, Canada, Western Europe, Australia and New Zealand amid the coronavirus outbreak. The closures will last through March 27
The announcement was made Sunday. Stores in South Korea, Japan, most of China and in many other countries, however, are currently open and will continue their normal operations.
Customers can continue to shop on Nike.com and on the Nike apps.
The company is taking additional steps including the option to work from home, staggered work schedules, social distancing and additional safety and cleaning steps to help protect and support its "teammates."
The news comes after the Oregon-based Nike urged its U.S.-based corporate employees to work from home where possible last week. It also follows last week's suspension of the NBA season and the cancellation of the NCAA college basketball tournament.
Given the impending hit to retail sales, the cancellation of major sporting events that provide promotional venues for the company's products, and the possibility of supply chain disruption, COVID-19 will almost certainly affect Nike's earnings and cash flow this year.
Shares of Nike have dropped 25% year to date, versus 19% for the broader market as measured by the S&P 500 index. Shares faltered $9.62, or 12.7%, to $65.96.
Investors will receive some clarity on potential impacts in short order, as the company is on deck to report fiscal third-quarter 2020 earnings on March 24.
Until then, shareholders can take solace in the fact that the shoe giant enjoys a fortress balance sheet, boasting $8.1 billion in working capital and just $3.5 billion of long-term debt.
