Brown-Forman Corporation (BF.B - Free Report) revealed that it is postponing all tours and closing tastings as well as retail shops in all cooperage, distillery and winery locations. The move is aimed at safeguarding employees and customers from the ongoing coronavirus pandemic and shall remain valid until the outbreak subsides.
The announcement follows President Donald Trump’s declaration of national health emergency on Mar 13 to help prevent further spread of the coronavirus. The declaration frees up to $50 billion in federal funds for emergency relief operations. This also eases regulations on the provision of healthcare and could speed up testing.
Moreover, the Federal Reserve announced interest rate cuts to 0-0.25% in order to support the economy that has been badly hit by this outbreak. This will boost margins and lower the inflation. Also, it revealed plans to buy $500 billion of Treasurys and $200 billion of agency-backed mortgage securities to lower the impacts of COVID-19 on the economy.
Coming back to Brown-Forman, the company had earlier anticipated the coronavirus outbreak to have a material impact on its results. In this regard, management revised its outlook for fiscal 2020. The company anticipated low-single-digit underlying sales growth in fiscal 2020. It expects underlying operating margin to be flat to down modestly. Further, earnings per share are envisioned to be $1.75-$1.80.
In the past three months, shares of this Zacks Rank #3 (Hold) company have lost 17.5% compared with the industry’s decline of 32.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other major retailers, such as Nike (NKE - Free Report) , lululemon (LULU - Free Report) and Abercrombie (ANF - Free Report) , also closed stores in the United States and other countries in response to the outbreak. Notably, lululemon announced the closure of all stores in North America and Europe till Mar 27. Also, Abercrombie temporarily closed all stores across its brands from Mar 15 in North America and Mar 16 in EMEA, until Mar 28. Moreover, Nike shut down all company-owned stores in multiple countries around the world, including in the United States, Canada, Western Europe, Australia and New Zealand, from Mar 16 to 27.
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