Starbucks sales improve as company reopens cafesEuropost
Starbucks Corp said on Thursday it had regained nearly two-thirds of its comparable US store sales from the prior year, as it reopened stores and modified operations due to the coronavirus-related restrictions.
The coffee-chain said it was tracking slightly above its expected recovery as it opened large number of outlets in the United States in the second week of May. The company had said it expects to reopen nearly 90% of stores in June. Still, it warned on Thursday it would take time to fully recover and post positive comparable store sales growth.
Starbucks customers are starting to return to its cafes in the United States and China as the global coffee chain reopens many locations that shuttered temporarily due to the coronavirus pandemic.
CEO Kevin Johnson wrote in a letter to employees on Thursday that the company has regained about 60% to 65% of its US same-store sales over the last week, compared to the same period a year ago. Starbucks has reopened more than 85% of its US locations with modified operations.
Johnson said that the company is tracking slightly above its internal estimates for recovery.
In China, where cafes have been reopened longer, same-store sales are down only about 20%, “reflecting gradual improvements over the past several weeks,” according to Johnson.
“Our recovery progresses each week, and we know that it will take time to fully recover and post positive comparable store sales growth,” Johnson said.
In the first three months of the year, Starbucks’ global same-store sales fell 10% as the pandemic hit locations in China and the US, its two largest markets. The company estimated that it lost $915 million in sales during the quarter due to store closures, reduced operating hours and lower customer traffic.
Catastrophe pay for baristas, hourly pay increases and the cost of store safety items such as face coverings weighed on profits. Its fiscal second-quarter earnings were nearly cut in half as a result.
Starbucks launched its summer menu on Thursday in the hopes of attracting even more customers to its US. locations. New items include the unicorn cake pop, an iced guava passionfruit drink, and a grilled chicken and hummus protein box.
Johnson also noted that until traffic returns to pre-crisis levels, many baristas will be working shorter hours than they were before the pandemic. The company is extended its pandemic unpaid leave policy through the end of September for employees who still want Starbucks’ benefits.
Shares of the coffee chain rose 1% in premarket trading. The stock, which has a market value of $92 billion, has fallen 10% so far in 2020.