Starbucks sees up to US$2.2 billion hit to third-quarter operating income from COVID-19

Starbucks sees up to US$2.2 billion hit to third-quarter operating income from COVID-19

The spread of the coronavirus disease (COVID-19) in New York
FILE PHOTO: A man wearing a mask walks in front of a shuttered Starbucks as the spread of the coronavirus disease (COVID-19) outbreak continues in the Manhattan borough of New York City, U.S., April 27, 2020. REUTERS/Lucas Jackson

REUTERS: Starbucks Corp said on Wednesday (Jun 10) it expected current-quarter operating income to plunge by up to US$2.2 billion, with sales declines for the rest of the year even as stores reopen following easing of coronavirus lockdowns.

The world's largest coffee chain said it would permanently close about 400 stores in the Americas over the next 18 months and would cut the number of planned new store openings by half, to about 300 this fiscal year.

The company's shares fell over 2 per cent in premarket trading.

Starbucks projected an adjusted loss of about 55 cents to 70 cents per share for its third quarter ending in June, and said it expects US same-store sales to drop by up to 45 per cent.

Sales trends are expected to improve in the fourth quarter, but Starbucks still estimates US same-store sales to be down 10 per cent to 20 per cent for the full year.

The company also forecast full-year adjusted earnings of about 55 cents to 95 cents per share.

Starbucks said it expects to lose between US$3 billion to US$3.2 billion in revenue in the current quarter and forecast an operating income decline between US$2 billion to US$2.2 billion.

The company reported an operating income of US$1.07 billion in the third quarter of last year.

Source: Reuters

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