Starbucks Reports Earnings Amidst COVID-19 Pandemic

Published on: 29 Apr, 2020

Starbucks Corporation (NASDAQ: SBUX) reported financial results for its 13-week fiscal second quarter ended March 29, 2020. The retailer of specialty coffee worldwide reported global comparable store sales declined 10%, driven by a 13% decrease in comparable transactions, partially offset by a 4% increase in average ticket. Americas and U.S. comparable store sales declined 3%, driven by a 7% decrease in comparable transactions, partially offset by a 5% increase in average ticket

International comparable store sales were down 31%, driven by a 32% decline in comparable transactions, slightly offset by a 1% increase in average ticket; China comparable store sales were down 50%, with comparable transactions down 53%.

"People around the world are united around a common cause as we navigate the COVID-19 situation globally. We are very grateful for the heroic efforts of medical personnel, first responders, government officials and volunteers who are working tirelessly in the service of others. I am exceptionally proud of the thousands of Starbucks partners around the world who are safely serving customers and playing a positive role in every community we serve," said Kevin Johnson, president and ceo.

"Since the beginning of this global crisis, Starbucks has made decisions that prioritize the well-being of our partners and customers, support health and government officials, and responsibly serve our communities. This principled approach is showing steady business improvement in China where today, substantially all existing Starbucks® stores have reopened with modified operations, new store locations are being added and customer engagement continues to grow with each passing week. We are leveraging our experience in China to inform our actions in other markets, including the U.S., where we are now entering the ‘monitor and adapt’ phase to reopen many more stores with best-in-class safety protocols. We continue to navigate this dynamic situation — which we believe is temporary — and are confident that Starbucks will emerge from this global crisis even stronger than before," concluded Johnson.

Net revenues for the Americas segment of $4.3 billion in Q2 FY20 were flat relative to Q2 FY19, as an increase from 552 net new store openings over the past 12 months, or 3% store growth, was offset by a 3% decrease in comparable store sales due to lost sales related to the COVID-19 outbreak.

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Bryan Shin

Email: Bryan@financialinsiders.com

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