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Accent share price down 5% on COVID-19 update

The Accent Group Ltd (ASX: AX1) share price has dropped lower again on Thursday following the release of a coronavirus update.

In early trade the footwear-focused retailer’s shares are down 5.5% to a 52-week low of 85.5 cents.

What did Accent Group announce?

This morning Accent Group released an update on the impact the coronavirus is having on its business.

According to the release, the company has been feeling the impact of the COVID-19 outbreak and the unprecedented and uncertain conditions it has created.

This has had a significant impact on consumer demand in the market and has resulted in a deterioration in like for like store sales since the middle of February.

Management advised that during the first two weeks of March, like for like store sales were significantly below the prior corresponding period.

And while the coronavirus outbreak has led to there being delays in deliveries, the company notes that its inventory levels are strong. Furthermore, its suppliers have informed management that they are not expecting any material impacts.

Earnings guidance withdrawn.

As with countless other companies this week, Accent has withdrawn its guidance for FY 2020.

Due to the decline in like for like sales and the impact that coronavirus uncertainty is having on consumer demand, management no longer expects to achieve profit growth in FY 2020.

Accent Group CEO Daniel Agostinelli said “We are monitoring the COVID-19 situation and reviewing advice from the relevant government and health authorities daily. Foremost in our minds is the health and safety of our teams.”

“Management is focused on trading the business, including leveraging the customer access we have through our large email database, 18 websites and flexible multichannel inventory fulfilment model. In this environment, we are also ensuring prudent management of costs including rents with landlords to ensure the business is well set up to accelerate when environmental conditions normalise,” he concluded.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Accent Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.