Starbucks Corporation is one of the most famous chains of coffeehouses in the world. However, even for the world-famous company coronavirus pandemic is a serious challenge. The company expects to lose billions of dollars in its fiscal third quarter. More precisely, it predicts to lose as much as $3.2 billion in revenue due to the coronavirus pandemic.
Shares of Starbucks fell by more than 3% in early trading on Wednesday. Moreover, the stock which has a market value of $94.2 billion fell by 8% in 2020.
As a reminder, Starbucks decided to withdraw its prior outlook in April. Starbuck expects a net loss per share of 64 cents to 79 cents. Also, the adjusted losses in the quarter per share will reach between 55 cents to 70 cents. The third-fiscal quarter ends on June 28.
According to Starbucks, its fiscal fourth-quarter earnings will improve, predicting net income per share of 11 cents to 36 cents and adjusted earnings per share of 15 cents to 40 cents. Importantly, by the end of June, the company expects weekly cash flow to be positive.
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However, in the case of same-store sales growth, the picture is grimmer. Notably, for the full year, Starbucks expects same-store sales in its two largest markets to decline by 10% to 20%. The two largest markets are the U.S. and China. Starbucks expects same-store sales in the U.S. to remain negative in the fourth quarter. However, in China same-store sales will increase by the end of the fourth quarter.
By the end of May, the company reopened 91% of the stores located in the U.S. Last month, same-store sales in the country fell by 43%. Currently, 95% of U.S. locations are open again. The only stores that did not open their doors are located in the New York City area.
For example, same-store sales in China fell by 21% in May. At the moment, 90% of Chinese cafes are back to their pre-pandemic operating hours.
The world-famous company plans to close as much as 400 company-owned cafes over the next 18 months in the U.S. However, it also plans to open about 300 net new locations in fiscal 2020.
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