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Apple Reopens China Stores After Weeks of Coronavirus-Led Closure
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Apple (AAPL - Free Report) has reopened all its 42 retail stores in China after weeks of closures due to the coronavirus outbreak. However, most of the stores will be open for limited hours only.
Notably, the iPhone maker was forced to shut down its stores in mainland China on Feb 1 as the deadly coronavirus spread rapidly. It had planned to open the stores on Feb 9. However, due to rising incidences of COVID-19, it chose to delay the date of reopening.
In late February, Apple started reopening its retail stores in phases. According to a Mar 9 CNBC report, until last week, the company had reopened 38 stores in the country.
Coronavirus Hurts Apple Sales in China
The company’s latest move indicates its effort toward gradually restarting business in its third-largest market. Notably, Apple generates one-fifth of its total revenues from selling products in China.
The outbreak severely hurt Apple iPhone sales in China. Citing data compiled by the China Academy of Information and Communications Technology, Reuters reported that iPhone sales in China plunged 61% year over year in February 2020.
The novel coronavirus is impacting Apple’s supply chain as well. The company’s iPhone assembling facilities were initially shut down outside Hubei (the epicenter of the coronavirus). The company has been slow to ramp up production back to normal levels, which is impacting global iPhone supply, per a BBC report.
The tech giant depends on a huge network of China-based suppliers to provide key components for its main devices. For instance, Taiwan-based Foxconn, which makes iPhones and other gadgets on behalf of Apple, is yet to fully resume work across its plants in China though some of its facilities are operating at partial capacity.
All such suppliers will need to pass government inspections with their facilities disinfected and with proper accommodation for potentially quarantining affected workers.
Citing demand and supply disruptions, Apple in mid-February had stated that it might not be able to meet its quarterly revenue expectations issued on Jan 28, 2020. Earlier revenue projections for the tech giant’s fiscal second-quarter 2020 were between $63 and $67 billion.
Apple Faces Lockdown Situation in Other Countries
Though Apple has managed to restart its business in China, it is facing the same situation in other parts of the world. On Mar 11, the company had to shut down all its 17 stores in Italy after the government put the country on lockdown to contain the coronavirus impact.
Italy has been most affected by coronavirus outbreak after China. The country has registered nearly 12,500 positive COVID-19 cases so far while more than 820 people have lost their lives.
Furthermore, Apple might have to close down its stores in the United States as well, where the coronavirus pandemic is worsening. Notably, the company is undertaking special measures at its stores for cleaning and hand sanitization to minimize contamination.
Apple operates more than 270 stores in the United States and the country accounts for nearly 30% of its total annual revenues. Therefore, U.S. store closure would severely impact its financials. The company is already facing stock shortage for replacement iPhones. According to a Bloomberg report, the company has notified its employees about limited supply of replacement devices.
The expected earnings growth rate for Apple and HP’s fiscal 2020 is pegged at 13.6% and 7.6%, respectively. Dropbox’s earnings are anticipated to grow 44% year over year in 2020.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Apple Reopens China Stores After Weeks of Coronavirus-Led Closure
Apple (AAPL - Free Report) has reopened all its 42 retail stores in China after weeks of closures due to the coronavirus outbreak. However, most of the stores will be open for limited hours only.
Notably, the iPhone maker was forced to shut down its stores in mainland China on Feb 1 as the deadly coronavirus spread rapidly. It had planned to open the stores on Feb 9. However, due to rising incidences of COVID-19, it chose to delay the date of reopening.
In late February, Apple started reopening its retail stores in phases. According to a Mar 9 CNBC report, until last week, the company had reopened 38 stores in the country.
Coronavirus Hurts Apple Sales in China
The company’s latest move indicates its effort toward gradually restarting business in its third-largest market. Notably, Apple generates one-fifth of its total revenues from selling products in China.
The outbreak severely hurt Apple iPhone sales in China. Citing data compiled by the China Academy of Information and Communications Technology, Reuters reported that iPhone sales in China plunged 61% year over year in February 2020.
Apple Inc. Price
Apple Inc. price | Apple Inc. Quote
The novel coronavirus is impacting Apple’s supply chain as well. The company’s iPhone assembling facilities were initially shut down outside Hubei (the epicenter of the coronavirus). The company has been slow to ramp up production back to normal levels, which is impacting global iPhone supply, per a BBC report.
The tech giant depends on a huge network of China-based suppliers to provide key components for its main devices. For instance, Taiwan-based Foxconn, which makes iPhones and other gadgets on behalf of Apple, is yet to fully resume work across its plants in China though some of its facilities are operating at partial capacity.
All such suppliers will need to pass government inspections with their facilities disinfected and with proper accommodation for potentially quarantining affected workers.
Citing demand and supply disruptions, Apple in mid-February had stated that it might not be able to meet its quarterly revenue expectations issued on Jan 28, 2020. Earlier revenue projections for the tech giant’s fiscal second-quarter 2020 were between $63 and $67 billion.
Apple Faces Lockdown Situation in Other Countries
Though Apple has managed to restart its business in China, it is facing the same situation in other parts of the world. On Mar 11, the company had to shut down all its 17 stores in Italy after the government put the country on lockdown to contain the coronavirus impact.
Italy has been most affected by coronavirus outbreak after China. The country has registered nearly 12,500 positive COVID-19 cases so far while more than 820 people have lost their lives.
Furthermore, Apple might have to close down its stores in the United States as well, where the coronavirus pandemic is worsening. Notably, the company is undertaking special measures at its stores for cleaning and hand sanitization to minimize contamination.
Apple operates more than 270 stores in the United States and the country accounts for nearly 30% of its total annual revenues. Therefore, U.S. store closure would severely impact its financials. The company is already facing stock shortage for replacement iPhones. According to a Bloomberg report, the company has notified its employees about limited supply of replacement devices.
Zacks Rank & Key Picks
Apple currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stock in the technology sector are HP Inc. (HPQ - Free Report) , Dropbox, Inc. (DBX - Free Report) , and Amkor Technology (AMKR - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The expected earnings growth rate for Apple and HP’s fiscal 2020 is pegged at 13.6% and 7.6%, respectively. Dropbox’s earnings are anticipated to grow 44% year over year in 2020.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>