Starbucks Corp (SBUX.O) said on Wednesday it expects current-quarter operating income to plunge by up to $2.2 billion, and sales to decline for the rest of the year even as nearly all its cafes have reopened following easing of coronavirus lockdowns.
The company said it would permanently close about 400 stores in the Americas over the next 18 months and cut its planned new store openings by half to about 300 this fiscal year.
Net new store growth in the Americas will grow in fiscal 2021, it said.
Some stores are being closed or relocated as part of an accelerated plan to shift to more pickup-only locations, in response to customer preferences for faster, contactless, mobile ordering and more social distancing amid the pandemic.
With the COVID-19 outbreak effectively putting a stop to dining out in most of the United States for weeks, Starbucks was forced to convert its cafes to drive-thru or pick-up only.
The world’s largest coffee chain’s shares fell more than 4%, as it also forecast a bigger-than-expected current-quarter loss and an over $3 billion fall in revenue.
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 U.S. same-store sales to drop by up to 45%. Analysts were expecting a third-quarter loss of 16 cents per share, according to IBES data from Refinitiv.
However, declines are expected to slow towards the end of the year.
The company expects same-store sales in China to drop by 20% to 25%, slightly more optimistic than an earlier forecast of a 25% to 35% fall.
Starbucks said it expects current quarter operating income decline between $2 billion to $2.2 billion. It reported an operating income of $1.07 billion in the third quarter of last year.
See all the news
Turkey to open doors to 31 countries for health tourism
Statement by Andrius Kubilius on the EU assistance for Georgia
Wine sales have increased 5 times in the UK - Georgian-British startup
S&P: Georgia Heads Toward Recession
Coronavirus: Boris Johnson moved to intensive care
First-Stage Land Usage Permit for APM Terminals Poti
How will Nenskra HPP Reduce the Electricity Import?
Carrefour: The product will be on the shelves with the prices same as before
Differences between tobacco and nicotine products
OECD cuts 2020 global growth forecast over virus
Georgia to export new armored vehicle Didgori Meomari
"Hotels are in shock, reservations are canceled" - Shalva Alaverdashvili
Georgian brand Entrée enters the UK market and opens its first facility in London
The first Swiss-Georgian VET college will soon be open in Dmanisi
Frontera claims that Georgian government has started harassing the company since 2013
Company HotelFriend offers convenient eComerce platform to Georgian Touroperators
Will the head of "Anaklia Deepwater Port Development Agency" be replaced?
TOP-10 Exporter Companies from Georgia to Russia
TBC Bank Group announces certain changes to the composition of the Management Board
Silknet signed Memorandum of Understanding with Global Communications Company One Web