Starbucks Corp said Wednesday that it expects operating profit for the current quarter to drop by $ 2.2 billion and that sales will drop for the remainder of the year, even though almost all of its cafes have reopened. following the relaxation of coronavirus blockages.
The company said it would permanently close approximately 400 stores in the Americas over the next 18 months and cut its planned store openings in half to approximately 300 this year, signifying the lasting impact of the pandemic.
The shares of the world‘s largest coffee chain have fallen by almost 4% as they also expect a larger than expected loss in the current quarter and a drop in revenues of more than $ 3 billion.
With the COVID-19 pandemic effectively ending restaurants in most of the United States for weeks, Starbucks was forced to convert their coffees into pickup or drive-through joints only.
The company said it would now speed up the opening of pickup-only stores, especially in urban areas, as health experts advise people to follow standards of social distancing.
Starbucks projected an adjusted loss of about 55 cents to 70 cents a share for its third quarter ending in June, and said it expects comparable store sales in the United States to drop to 45%. Analysts had expected a loss of 16 cents a share in the third quarter, according to IBES data from Refinitiv.
However, the declines should slow down towards the end of the year.
The company expects same-store sales in China to drop 20% to 25%, slightly more optimistic than an earlier forecast of 25% to 35% decline.
Starbucks said it expects operating profit to drop this quarter to between $ 2 and $ 2.2 billion. It reported operating profit of $ 1.07 billion in the third quarter of last year.
(With the exception of the title, this story was not edited by GalacticGaming staff and is published from a syndicated feed.)
