Starbucks sales miss as virus spike keeps customers at home

(Reuters) – Starbucks Corp on Tuesday reported a bigger-than-expected fall in quarterly comparable sales as the rising number of coronavirus cases in the United States kept customers at home, sending its shares 2% lower in extended trading.

FILE PHOTO: Customers sit inside a Starbucks coffee shop in Rio de Janeiro, Brazil August 15, 2018. REUTERS/Pilar Olivares/File Photo GLOBAL BUSINESS WEEK AHEAD

The world’s largest coffee chain’s global same-store sales fell 5% in the first quarter, more than analysts’ estimates of a 3.4% decline, according to Refinitiv IBES data.

The second wave of COVID-19 infections and accompanying restrictions dented traffic at the coffee chain’s stores, hampering its efforts to boost demand through product launches and new drive-thrus.

Comparable sales declined 6% for the Americas region, compared with a 5.2% fall expected by analysts.

But in China, Starbucks’ biggest growth market, comparable sales rose 5% as the company benefited from the popularity of its rewards program and the return of pre-coronavirus consumer habits.

For the second quarter, Starbucks said it expects U.S. comparable sales to rise between 5% and 10%, while in China they were forecast to grow nearly two-fold a year after the pandemic hit the region.

Starbucks also said Chief Operating Officer Roz Brewer would be leaving the company next month to take a chief executive officer role at another company.

Net revenue fell 5% to $6.7 billion, missing expectations of $6.93 billion.

Net earnings attributable to Starbucks fell to $622.2 million, or 53 cents per share, compared with $885.7 million or 74 cents per share, a year earlier.

On an adjusted basis, the Seattle-based company earned 61 cents per share, 6 cents above estimates.

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