Starbucks' Global Comparable Sales Fell For The First Time In 11 Year
American Corporation Starbucks, which owns the world's largest coffee chain, announced a decline in net profit and revenue in the second fiscal quarter, amid the first decline in global comparable sales in almost 11 years in the face of a pandemic.
For the quarter ended March 29, Starbucks' net income was $328.4 million, or $0.28 per share, compared with $663.2 million, or $0.53 per share, a year earlier.
Earnings excluding one-time factors were $0.32 per share.
Starbucks' quarterly revenue fell to $6 billion from $6.31 billion a year earlier.
Analysts polled by FactSet on average predicted adjusted earnings of $0.34 per share on revenue of $5.89 billion.
Starbucks' global comparable sales decreased by 10% in the second quarter. The number of purchases decreased by 13%, and the average receipt amount increased by 4%.
Comparable sales in the Americas, including the United States, decreased by 3%, with a 7% decrease in the number of purchases and a 5% increase in the average receipt amount. In other regions, sales fell by 31%, with a 32% decrease in the number of purchases and a 1% increase in the average receipt amount.
In China, comparable sales fell by 50% in the past quarter.
Starbucks expects the impact of the coronavirus pandemic on its business to be even more severe in the second quarter. The company refused to make forecasts for the current financial year. It also announced a suspension of share buybacks and cost cuts. At the same time, it will continue to pay quarterly dividends, for the past quarter their amount will be $0.41 per share.
At the moment, approximately 50% of Starbucks restaurants in the United States remain closed, while the rest operate in the mode of fast service for motorists, as well as delivery. The company does not expect to be able to open its American cafes to visitors in the near future.
In China, almost 100% of Starbucks restaurants are currently open, although in limited mode.
Starbucks shares fell 1.2% in additional trading on Tuesday. Their cost has fallen by 11% since the beginning of 2020.