MILAN – Starbucks said Wednesday it expects that it expects its fiscal second-quarter earnings to be cut nearly in half from a year ago due to the spread of COVID-19 in China and then the U.S
The company forecast second-quarter earnings of about 28 cents per share, reflecting the impact of lost sales for the period as well as higher costs. It had reported 53 cents per share in the year-earlier period.
On an adjusted basis, earnings per share will be 32 cents, down from 60 cents per share in the year-ago period.
“These estimates reflect the impact of lost sales for the period as well as incremental expenses for partner wages and benefits, store operations and other activities related to the COVID-19 outbreak,” the company disclosed.
“This includes inventory write-offs, honoring supplier obligations, store safety-related items, asset impairments and preliminary estimates of certain government stimulus program benefits.”
Starbucks also withdrew its outlook for fiscal 2020, owing to the “dynamic nature” of the coronavirus crisis. Its fiscal 2020 revenue was expected to rise between 6% and 8% and global same-store sales growth was forecast to be in a range of 3% to 4%.
Starbucks said that U.S. same-store sales fell 3% during the quarter, “reflecting the very rapid onset of COVID-19 business impacts in the final three weeks of the quarter.” In the quarter up to March 11, U.S. same-store sales grew 8%. But U.S. sales for the Seattle-based chain began to decline on March 12 and steadily worsened as it
The company also said revenue in China faced a shortfall of about $400 million compared with its expectations, with a 50% decline in comparable store sales for the second quarter ended March.
