Apple store closures across the U.S. and Europe signal a sharp drop in demand that will last until next quarter, wrote Moody's in a report on Tuesday.
The iPhone giant announced last Friday that it is closing all of its stores outside of China for two weeks in response to the coronavirus crisis; as of Tuesday, a note on Apple's website indicated that its retail stores are closed "until further notice."
"While visibility in China has improved somewhat, the downside risks to Apple from eroding demand in the US and Western Europe economies have magnified quickly as the cases of coronavirus grow rapidly in these regions," wrote analyst Raj Joshi, saying that the demand impacts will extend "at least" into the June quarter.
The Moody's report forecasts roughly 5% growth for Apple's fiscal 2020, which ends in Sept., down from a general consensus of low- to mid-teens growth prior to the crisis. However, given the "significant uncertainty" in the length and severity of the outbreak in U.S. and Europe, there is nonetheless further downside risk to Apple's revenues.
The U.S. is Apple's largest sales market, accounting for 39% of overall revenue in fiscal 2019, while Western Europe accounted for 23% in the same period.
Apple's online stores will remain open throughout the coronavirus outbreak, the company has said. Its stores in greater China have re-opened, the company announced last Friday, and demand in that region will rebound at a gradual "sluggish" pace depending on the timing of a Chinese economic rebound, according to Moody's.