Starbucks expects to lose as much as $3.2 billion in revenue due to the coronavirus pandemic, in its fiscal third quarter.
It is worth mentioning that, Starbucks decided to withdraw its prior outlook in April. Importantly, the company expects a net loss per share of 64 cents to 79 cents. Based on the information provided by the company, it expects the adjusted losses in the quarter per share to reach between 55 cents to 70 cents. As a reminder, the third-fiscal quarter ends on June 28.
This is not the end of the story, as the company predicts that fiscal fourth-quarter earnings will improve in the quarter. They expect earnings per share to reach from 11 cents to 36 cents and adjusted earnings per share of 15 cents to 40 cents.
Interestingly, by the end of June, Starbucks expects weekly cash flow to be positive.
Starbucks and its strategy
Unfortunately, when it comes to same-store sales growth, the picture is grimmer as for the full year, Starbucks expects same-store sales in its two largest markets to decline by 10% to 20%. As a reminder, the largest markets are the U.S. and China.
Moreover, the company expects same-store sales in the U.S. to remain negative in the fiscal fourth quarter as well. Nevertheless, in China, same-store sales will grow by the end of the fourth quarter.
By the end of last month, Starbucks reopened 91% of the stores located in the U.S. Also, same-store sales in the country fell by 43% in May. At the moment, 95% of U.S. locations are open again.
Moreover, last month same-store sales in China dropped by 21%. Currently, 90% of Chinese cafes are back to their pre-pandemic operating hours.
Last but not least, the world-famous company plans to close as much as 400 company-owned cafes over the next 18 months in the U.S. Also, it plans to open about 300 net new locations in fiscal 2020.
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