SKX - Why These Apparel Retailers Plunged on Monday
Shares of Under Armour (NYSE: UA) (NYSE: UAA) and Skechers (NYSE: SKX) declined roughly 11% on Monday, while Nike (NYSE: NKE) recorded a 5% loss amid the worst day of trading for stocks since 2008. The Dow, Nasdaq, and S&P 500 all declined more than 7%.
The day couldn't have started off much worse for investors. The markets grappled with an oil price war between Russia and OPEC as COVID-19 coronavirus fears continued to add uncertainty for consumers and companies across the globe. The Italian government has instituted a nationwide lockdown as it became one of the worst-hit regions for the outbreak. Major U.S. markets have moved from a 10% pullback, generally referred to as a correction, to flirting with bear market territory, which is considered a 20% decline from recent all-time highs.
That broader selling pressure and increasing uncertainty is causing investors near-term pain in the markets, but there are specific concerns for companies such as Skechers, Under Armour, and Nike, as potential supply chain disruptions and slowing store traffic will almost assuredly hurt sales. Skechers already added this to the top of its recent 10-K risk factors: "We have significant sales and operations in China that are expected to be adversely impacted by the recent coronavirus outbreak and face risks that could impact our business, including our results of operations."