“We are beginning the ‘monitor and adapt’ phase, which now is the path to recovery.” Here’s what Starbucks CEO Kevin Johnson says the company has learned from its experience in China.
The company also warned that its fiscal third-quarter results will take an even bigger hit from the pandemic, even as sales in China begin to recover.Here's what the company reported for the quarter ended March 29:The coffee chain reported fiscal second-quarter net income of $328.4 million, or 28 cents per share, down from $663.2 million, or 53 cents per share, a year earlier.
Wall Street anticipated earnings per share of 34 cents on revenue of $5.89 billion, based on a survey of analysts by Refinitiv. Starbucks expects that same-store sales in China will decline between 15% and 25% in fiscal 2020, as sales continue to rebound in the second half of the fiscal year. About 98% of Chinese cafes have reopened and are operating under modified hours with enhanced safety protocols.
Earlier this month, the company withdrew its fiscal 2020 forecast, citing the "dynamic nature" of the coronavirus crisis. Starbucks said Tuesday it expects its fiscal third-quarter results to show steeper declines from the pandemic, given that social-distancing measures and shelter-at-home orders went into place in the U.S. near the end of March. Negative financial impacts are expected to moderate in the fiscal fourth quarter.
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