Starbucks earnings: coronavirus continues to weigh heavily on sales

The coffee chain reported a net loss of $ 678.4 million, or $ 0.58 per share, on Tuesday during the quarter ended June 28, largely due to the negative impacts of the pandemic. Starbucks (SBUX) Revenue decreased 38% from the same period last year to $ 4.2 billion.

Starbucks said Tuesday that most of its company-operated stores had reopened at the end of the quarter, including 96% of US stores, after the closings earlier this year caused by the pandemic. The company said that most stores reopened have modified hours and limited seating.

As of its last earnings call in April, about half of the company’s stores in the United States remained closed. The company said at the time that it planned to have 90% of its company-owned locations in the U.S. operating in June.

“We are pleased to share that the vast majority of Starbucks stores worldwide have reopened and that our global business is constantly recovering, demonstrating the relevance of the Starbucks brand and the trust we have created with our customers,” said the CEO Kevin Johnson on release Thursday.

But renewed waves of coronavirus cases in many parts of the United States may be hindering progress. Even in places where Starbucks has reopened stores, customers may not feel comfortable sitting inside for a cup of coffee.

The company reported a 41% decrease in comparable store sales and a 53% drop in the number of transactions during the quarter in the Americas region, compared to the prior year period. One silver lining: while the total number of transactions decreased, customers in the Americas spent, on average, 27% more on each order during the quarter.

Starbucks’ operating margin for the period was -16.7%, which it attributed to coronavirus-related costs, such as risk payment and support from retail partners, as well as the restructuring of its portfolio of stores in the United States. United.

“The company plans to launch curbside collection at several hundred existing locations in the near future and add more than 50 Starbucks collection locations in the next 12 to 18 months,” Starbucks said in its statement on Thursday. “Both formats naturally allow for mobile ordering and physical distancing to meet changing customer preferences that have been accelerated by COVID-19.”

CFO Patrick Grismer said Starbucks expects to return to profitability during the current quarter, although the company projects global sales in comparable stores to decline by 12% to 17%.