Procter & Gamble Warns of 'Material Impact' From the Coronavirus

Procter & Gamble's financial chief warns that the coronavirus outbreak will have a material impact on the company's results in China for the January-March quarter and for the household and personal products maker overall.
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The chief financial officer at Procter & Gamble (PG) - Get Report warned Thursday that the deadly coronavirus outbreak will have a material impact on the company's results in China for the January-March quarter and for the household and personal products maker overall.

Jon Moeller, who also serves as P&G's chief operating officer, made his comments Thursday at the Consumer Analyst Group of New York.

"China is our second largest market - sales and profit," Moeller said in a statement that was also included in an 8-K filing. "Store traffic is down considerably, with many stores closed or operating with reduced hours."

Moeller said that while some of the demand has shifted online, supply of delivery operators and labor is limited. He added that there were also impacts outside of China, including travel retail, a significant reduction in department store traffic in many Asian metro areas, and global supply.

Procter & Gamble accesses 387 suppliers in China that ship more than 9,000 different materials to the company globally, affecting about 17,600 different finished product items. Each of these suppliers faces their own challenges in resuming operations, he said.

"The operating challenges change with the hour, and of course the path of the virus is unknown, making it very difficult to provide precise estimates of impact," Moeller said.

He added that results for the January to March quarter in China and for the total company will be "materially impacted on both the top and bottom line by these dynamics."

"We continue to believe, based on what we know today, that our fiscal year top- and bottom-line guidance ranges - and I emphasize ranges- remain the right ones," Moeller said. "We will continue to monitor the situation and obviously update you if and when a different reality becomes apparent.”

Shares were up slightly to $125.82.

Global deaths from the virus, which broke out in Wuhan, the capital of Central China’s Hubei province, have risen to 2,130 and confirmed cases have increased to 75,752, according to Johns Hopkins CCSE.

South Korea reported Thursday its first death from the coronavirus, and Japan confirmed two deaths from a quarantined cruise ship.