It was a tough quarter for the global coffee chain, as its same-store sales fell by 40% due to the coronavirus pandemic. Starbucks released information about its fiscal third-quarter results. Nevertheless, the company appears optimistic about the future. Interestingly, Starbucks decided to raise the outlook for its adjusted earnings for the fiscal fourth quarter.
The third fiscal quarter ended on June 28. Let’s have a look at the results, to compare the results with the expectations. For example, the loss per share was lower than expected, 46 cents, adjusted, vs. the 59 cents expected. Moreover, revenue surpassed expectations, as it reached $4.22 billion.
However, Starbucks reported a fiscal third-quarter net loss of $678.4 million or 58 cents per share. Last year, net income was $1.37 billion or $1.12 per share. Importantly, costs related to the pandemic, like paid leave for baristas, as well as added safety measures, affected its profits.
Starbucks and interesting details
Interestingly, excluding items in the third-fiscal quarter, Starbucks lost 46 cents per share. This result was lower than expected by analysts. The pandemic created serious problems, as the company estimates that the pandemic resulted in $3.1 billion in lost revenue.
Notably, global same-store sales dropped by 40% during the fiscal third quarter. Moreover, transactions at locations open for at least 13 months fell 51%. However, consumers spent more money, as the average check increased by 23%.
The global coffee chain also suffered losses in the U.S. as same-store sales dropped 40% in the quarter. It makes sense, as Starbucks temporarily closed most of its U.S. cafes between mid-March to mid-April, leaving only drive-thru and delivery.
Moreover, its number of active rewards members dropped by 5% compared to the same period of time in 2019. However, in China, same-store sales fell by only 19%. It is worth mentioning that China is Starbucks’ second-largest market.
The crisis made it harder for companies to predict future results. Starbucks changed its fourth-quarter forecast for now. The company expects to earn between 6 cents to 21 cents instead of 11 cents to 36 cents.
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