(Bloomberg) – Starbucks Corp. CEO Kevin Johnson said a key sales measure turned positive in July, a sign that the coffee giant’s recovery from Covid-19 locks is gaining strength. The shares expanded the gains in late trading.
“Our recovery strategy is working,” Johnson said during a call with analysts after the company’s quarterly results were released.
He said comparable store sales in the United States, a key indicator of restaurant performance, were positive in July for the 3,100 company-operated stores that have remained open throughout the quarter, which ended on April 28. June. In comparison, the company operates more than 8,800 stores in the United States overall.
This may indicate a turning point after the global pandemic wiped out Starbucks’ businesses first in China earlier this year and then in the rest of the world. Another titan restaurant, McDonald’s Corp., reported a similar trend Tuesday, with sales at the same U.S. stores turning slightly positive this month.
Still, the impact of the Coronavirus is clear: Global sales at the same store fell 40% in the fiscal third quarter that passed through June 28. That’s a little better than the Consensus Metrix estimate. Revenue, meanwhile, was $ 4.2 billion, beating analysts’ average forecast.
Starbucks, like its restaurant peers around the world, has been trying to adapt to a new normal in which diners prefer to order deliveries and hardly anyone shows up for a latte on the way to work or school. The coffee vendor this summer accelerated the rollout of its “pickup” store concept, with smaller-format locations that don’t have customer seats, but with less push and less delivery penetration than some rivals, the chain has a lot of work to do. to attract customers in the new era of consumer caution.
The coffee chain sees in-store sales decline by 12-17% throughout the fiscal year, making it one of the first restaurant companies to offer insight amid the 2020 pandemic outage. Covid-19’s impact will “significantly moderate” during the current quarter, the company said.
He estimates that comparable sales for all US stores he operates will drop approximately 14% in the July fiscal year, a sequential improvement from June’s 19% decrease. The company said it delayed some operations in the United States this month amid regional coronavirus attacks.
China’s progress
In China, a key market for Starbucks that is most advanced in its Covid-19 recovery, comparable store sales declined 19% in the quarter and the company sees business recovering substantially at the end of the current calendar year. In the United States, sales at the same store fell 40%.
But while transactions generally don’t work, when customers treat Starbucks, they’re spending more. The average ticket, or the total bill, increased 23% in the quarter worldwide.
Starbucks shares gained as much as 7.2% in recent trades, increasing after Johnson reported comparable sales were positive in July. The stock is down 15% through Tuesday’s close.
(Updates to include CEO comments on same-store sales for July and stock movements.)
For more items like this, visit us at bloomberg.com
Subscribe now to stay ahead with the most trusted source of business news.
© 2020 Bloomberg LP
