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World Wrestling Cuts Costs & Furloughs Workers Amid Coronavirus

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World Wrestling Entertainment, Inc. (WWE - Free Report) has issued business updates in light of the impact of the coronavirus outbreak. The company has decided to curb expenses and furlough employees as well as take other measures to address the challenges tied to the pandemic. It has also provided details on its financial resources, which are likely to help the company stay resilient amid such unprecedented downturns.

The company has taken several actions, including reduction in executive and board member compensation, cutting down on operating and talent expenses, and deferring spend related to the build out of its new headquarters for a minimum of six months. Management has also agreed to furlough part of its workforce immediately and has identified headcount reductions. It believes that this furlough will be temporary. Notably, reductions in employee compensation and headcount are anticipated to generate monthly savings of $4 million, and deferring of spending on the new headquarters is likely to result in a cash flow improvement of $140 million.

In addition, World Wrestling’s financial resources, available cash and debt capacity currently total nearly $0.5 billion. The company is well poised to cash in on the changing media backdrop and increasing value of live sports rights. Management also informed that it will give out more details along with its first-quarter 2020 results scheduled to release next week.

We note that the company has been strengthening and expanding WWE Network through creation of new content along with implementation of programs, which will have higher customer attraction and retention power. Further, the introduction of features, expansion of distribution platforms and foraying into new regions will aid the drive. It is increasing the monetization of WWE content worldwide as well.

Although shares of the media and entertainment company have lost 38.1% in the past three months, they have fared better than the industry’s 45.9% decline. World Wrestling currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

What Else to Know?

Unfortunately, the ill impacts of COVID-19 continue to amplify. The pandemic has been resulting in a huge number of fatalities and is hurting economic ventures worldwide. Companies are taking precautionary measures like curbing expenses, furloughing associates, extending store closures, increasing liquidity and more.

Companies like L Brands (LB - Free Report) , Zumiez (ZUMZ - Free Report) and G-III Apparel (GIII - Free Report) have also taken actions to stay afloat. Women’s apparel retailer, L Brands, suspended quarterly dividend, cut down capital expenditures and drew $950 million from its revolving credit facility. It has also furloughed majority of its store associates. Apparel, footwear and accessories retailer, Zumiez, has decided to suspend hiring, eliminate the entire bonuses for fiscal 2020, delay most of merit increases, curb capital spend, extend payment terms for vendor invoices and reduce inventory receipts by cancelling or postponing orders. Also, the company has been minimizing operating costs. Apparel and accessories designer, G-III Apparel, has decided to furlough majority of associates and temporarily reduce annual salary.

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