Starbucks Says Customers Are Coming Back to Cafes -- Update
By Heather Haddon
Starbucks Corp. said customers are returning to its cafes
quicker than expected, forecasting a return to sales growth next
The coffee giant on Thursday said same-store sales in its
Americas region declined 9% in its latest quarter from last year's
period, a better result than analysts expected. The chain benefited
from larger orders as consumers have tended to load up on food and
drinks during less frequent trips. Still, Starbucks reported a 25%
reduction in transactions during its fourth quarter ended Sept.
The Seattle-based company reported adjusted earnings of 51 cents
a share, topping analyst projections. The chain said it expects to
fully recover from the pandemic next fiscal year, and anticipates
opening 2,150 new stores world-wide even as it closes hundreds of
Shares rose 1% to $89 in aftermarket trading. Its stock was up
1% this year through Thursday's close.
Coffee and breakfast chains have been hit hard as the
coronavirus has disrupted morning routines. Breakfast and brunch
restaurants have suffered some of the highest rates of closures
since the pandemic hit in March, according to data from listing
Starbucks, Dunkin' Brands Group Inc. and Dine Brands Global Inc.
division IHOP are in the process of closing hundreds of stores.
Chains have generally weathered the pandemic better than
independent restaurants, though, and Starbucks and Dunkin' said
they are opening new stores in areas with more business.
Dunkin's recovery from the pandemic in the U.S. has generally
outpaced Starbucks's. The Canton, Mass.-based chain on Thursday
reported a U.S. same-store sales increase of 1% in its latest
quarter ended in September, and said that sales remained up its
current period. Dunkin' had a large percentage of U.S. sales before
the pandemic at drive-throughs, a key selling mechanism since the
Starbucks traditionally focused more on sales in its stores.
Starbucks is now building more to-go only stores and drive-throughs
at suburban locations.
The company said it had restored lobby service to roughly 63% of
its company-owned stores in the U.S. and 90% of those in China.
Licensed stores that remained closed in the U.S. and Canada were
largely in airports and on college campuses, the chain said.
Starbucks was early to close its dining rooms when the pandemic
For the quarter, Starbucks posted a profit of $392.6 million, or
33 cents a share, compared with $802.9 million, or 67 cents a
share, in the comparable quarter last year. Sales of $6.2 billion
were down from $6.7 billion during last year's period. Analysts
expected sales of $6.1 billion.
For its full fiscal year, Starbucks reported earnings of 79
cents a share on profit of $928.3 million, down from $2.92 a share
in the prior year. Global same-store sales fell 14% for the
Starbucks said it expects same-store sales globally to increase
by 18% to 23% for its 2021 fiscal year. The chain anticipates
opening 850 new stores in the Americas. It anticipates adding 600
stores in China.
Write to Heather Haddon at email@example.com
(END) Dow Jones Newswires
October 29, 2020 16:49 ET (20:49 GMT)
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