Pandemic in its early days; company earnings tell the story

Quarterly earnings reports continue to roll out, providing a look damages inflicted early in the pandemic

The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Monday related to national and global response, the work place and the spread of the virus.

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EARNINGS SEASON: The damage from the pandemic is playing out in quarter earnings reports, which have begun to capture the earliest days of the outbreak. Quarterly growth has plunged 13% for S&P 500 companies that have reported, according to S&P Global. Most companies have withdrawn all financial guidance for the year given the unprecedented disruption to the economy.

— Under Armour’s sales fell 23% in the first quarter, with 15% of that decline related to the impact of the virus outbreak. The report Monday dragged down a bunch of other clothing makers including Hanesbrands, PVH, Tapestry and Capri.

— If there is any potentially good news for the crippled hotel industry, it can be found in China. Marriott, like other lodging companies with operations in China, said Monday that business there is starting to come back. Still, Marriott’s revenue per available room dropped 22.5% and it slashed its expectations for this quarter.

— Coty, the cosmetics company, reported a surprise loss Monday, but it also received some desperately needed cash. The private equity firm KKR & Co is investing $750 million in Coty Inc.

UNCERTAIN FUTURE: Companies from all sectors are trying to find a path out of the pandemic, and it’s faltering. Neiman Marcus and J.Crew have already filed for bankruptcy protection, along with a smattering of energy companies. Hundreds more are expected.

— Stage Stores filed for Chapter 11 bankruptcy protection Monday. The company said it will simultaneously solicit bids from those seeking to keep operations going, and from those that want to buy its assets. The chain will reopen some stores in the coming weeks to liquidate ts inventory. It will start reopening stores to the public Friday and anticipates having all stores open by June 4.

— Shares of Chesapeake Energy slumped in early trading after the company said in a regulatory filing that “management has concluded that there is substantial doubt about the company’s ability to continue as a going concern.” Demand for energy has plummeted during the outbreak, driving prices for crude and natural gas sharply lower.

HOUSE FIRE: The sale of a house requires a lot of face-to-face contact, from property showings to contract signings. The inability to continue business has usual has quashed real estate sales.

— PulteGroup’s net new orders plunged 50% in April compared with last year. The company is cutting about $100 million in costs on an annualized basis through furloughs and other initiatives. A portion of compensation for senior executives and board members is being redirected to an employee assistance fund.

— When the U.S. reports the number of new home construction projects underway next week, economists expect a 22.3% plunge.

GOVERNMENTS & CENTRAL BANKS: Countries are trying to re-open their economies and limit economic damage. The results have been mixed.

— Ukraine is starting to ease restrictions, allowing some shops, hairdressers, beauty parlors and other businesses to reopen.

— The French began leaving their homes and apartments for the first time in two months without permission slips. Clothing stores, salons and other businesses reopened. Use of public transport at rush hour is limited to those going to work and requires a permission slip.

— Gyms in Germany’s most populous state are reopening. Some fitness clubs in North Rhine-Westphalia opened shortly after midnight to let gym-starved customers build up a sweat again.

— Greece entered the second phase in lifting its lockdown, with all remaining retail stores that had been shut down in March allowed to reopen. Shopping malls and department stores remain shut. All other retail businesses, including clothing, hardware and beauty product stores, were allowed to reopen Monday.

— Shopping malls, barber shops, hairdressers and beauty salons have reopened in Turkey for the first time in seven weeks.

The government has laid out strict requirements. Shopping malls have to check shoppers’ temperatures and limit capacity. Food courts, movie theaters and children’s play areas will remain closed.

MARKETS: — Global stocks turned lower Monday as investors sought clarity on how quickly government plans to ease lockdowns on public life might help economic activity pick back up.