SBUX Starbucks Corporation

By Michael Dabaie

Starbucks Corp. said that over the last week it has regained about 60% to 65% of prior-year comparable U.S. store sales while reopening under modified operations and with reduced hours.

The coffee retailer filed with the Securities and Exchange Commission a letter from Chief Executive Kevin Johnson to employees.

The letter said that in China, comparable store sales have reached about 80% of prior-year levels, reflecting gradual improvements over the past several weeks.

"We learned in China that when we re-open stores, we begin a recovery process that starts with those safe, familiar and convenient experiences and grows from there. Our recovery progresses each week, and we know that it will take time to fully recover and post positive comparable store sales growth," the letter said.

The company said it began reopening a large number of stores in the U.S. in the second week of May and is tracking slightly above its forecast recovery curve.

"With the launch of our new summer menu today, we are hoping to begin welcoming back more customers to Starbucks," the letter said.

The letter said Starbucks will accelerate the transformation that was underway before Covid-19 by adapting in ways that better serve customers, both in stores and on-the-go.

"Since approximately 80% of our store transactions before the crisis were 'on the go,' driven in many ways by the use of the Starbucks mobile app, we were already adapting to new consumer trends that balance the need for convenience on-the-go with the desire for connection in our stores," Mr. Johnson said in the letter.

"The plans we had for this broader store transformation over a three- to five-year period will now occur over the next 12 to 18 months," the letter said.

Shares were up 0.8% to $78.34 in early trading.

Write to Michael Dabaie at michael.dabaie@wsj.com

(END) Dow Jones Newswires

May 21, 2020 09:50 ET (13:50 GMT)

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