Starbucks’s Sales Improve Despite Covid-19 Restrictions — Update
By Heather Haddon
Starbucks Corp. said its sales are recovering, particularly in China, but that store closures in places where Covid-19 case counts are high continue to weigh on the company.
The company also said Chief Operating Officer Roz Brewer is leaving the company giant at the end of February to lead another publicly traded company. Starbucks declined to identify the company that had hired her.
The coffee giant said Tuesday that global same-store sales fell 5% in its quarter ended in December from the same period a year earlier. A quarter earlier, sales by that measure fell 9% from a year earlier. Same-store sales in China increased 5% year over year in the latest quarter.
Starbucks is still navigating restrictions imposed by local officials seeking to curb the new coronavirus’s spread. Sales of $6.7 billion during the quarter were down 5% from the year-ago period, with Starbucks attributing the decline to fewer customers, reduced hours and store closures related to the pandemic. Analysts polled by FactSet anticipated $6.9 billion in sales.
Some U.S. states added back restrictions on businesses and public gatherings this winter as Covid-19 cases have risen, including bans on indoor dining. Starbucks has said it experiences an immediate sales lift when customers are allowed back in cafes.
In China, where Starbucks stores were largely closed and sales plummeted when the pandemic took off there early in 2020, sales have largely bounced back along with the broader economy. Starbucks said it is investing roughly $150 million to build a roasting plant in eastern China, one of a number of U.S. companies adding to their operations in the country now.
The pandemic has prompted Starbucks to reassess the design of its stores and shift toward more to-go formats. Starbucks plans to close 800 stores in the U.S. and Canada over the next 18 months as part of that shift.
Starbucks said it added 278 stores in its first quarter, up 4% from the previous year. The chain now has 32,938 stores globally. It said last month that it wanted to have a network of 55,000 owned and licensed locations around the world by 2030.
For the latest quarter, Starbucks reported adjusted earnings of 61 cents a share, beating analysts’ expectations of 55 cents a share. Earnings of 53 cents a share were down from 74 cents in the same period last year, with Starbucks attributing the decrease to the pandemic.
Write to Heather Haddon at [email protected]
(END) Dow Jones Newswires
January 26, 2021 16:49 ET (21:49 GMT)
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