Anti-American swill peddler Starbucks shares jump as investors shrug off coffee chain's loss and hope worst of the pandemic is behind it

[Leroy N. Soetoro]

https://www.cnbc.com/2020/07/28/starbucks-sbux-q3-2020-earnings.html

Starbucks swung to a loss during its fiscal third quarter as its same-
store sales plunged 40% in the wake of the coronavirus pandemic.

But the company appears optimistic about the future, raising the outlook
for its adjusted earnings for the fiscal fourth quarter.

Executives said that they expect same-store sales to recover more
substantially in China and the U.S. by the end of its fiscal first and
second quarters, about a year after the crisis began, assuming there are
no new sustained waves of infections or major economic disruptions.
Margins are expected to follow in the next two quarters.

“We still have a long ways to go to get back to full recovery, but we’re
optimistic based on the strength of our brand and the strategy and
initiatives that we have to drive sales and improve margins,” CFO Pat
Grismer said.

Shares of the company rose more than 6% in extended trading.

Here’s what the company reported for the quarter ended June 28 compared
with what Wall Street was expecting, based on a survey of analysts by
Refinitiv:

Loss per share: 46 cents, adjusted, vs. 59 cents expected
Revenue: $4.22 billion vs. $4.07 billion expected
The global coffee chain reported fiscal third-quarter net loss of $678.4
million, or 58 cents per share, down from net income of $1.37 billion, or
$1.12 per share, a year earlier. Costs related to the pandemic, like paid
leave for baristas and added safety measures, weighed on its profits.

Excluding items, Starbucks lost 46 cents per share, narrower than the loss
of 59 cents per share expected by analysts surveyed by Refinitiv.

Net sales dropped 38% to $4.22 billion, topping expectations of $4.07
billion. The company estimates that the pandemic resulted in $3.1 billion
in lost revenue.

Global same-store sales plummeted 40% during the quarter. Transactions at
locations open at least 13 months plunged 51%, but consumers spent more
their orders, sending average check up by 23%.

U.S. same-store sales fell 40% in the quarter. The company temporarily
shuttered most of its U.S. cafes between mid-March to mid-April,
transitioning to drive-thru and delivery only. Reopened locations often
had reduced hours and limited operations.

Its number of active rewards members fell 5% from the year-ago period as
fewer loyal customers ordered coffee. The chain recently unveiled new ways
for members to pay for their food and beverages, which should encourage
enthusiastric coffee drinkers to join the program.

CEO Kevin Johnson said that the chain saw fewer consumers buying drinks on
their way to work and school. But some customers just moved their daily
coffee run to later in the morning or early afternoon, leading the company
to reallocate its baristas’ hours.

“All of this indicates that customers are adapting their routines,” he
said.

In China, Starbucks’ second-largest market, same-store declines were less
steep, falling only 19%. About 12% of orders were for delivery.

Despite the pandemic, Starbucks opened 130 net new cafes worldwide during
the quarter. The company previously announced that it would close up to
400 locations through 2021 and put more emphasis on cafes built for mobile
pick-up, drive-thru orders and curbside pick-up.

As the crisis continues to make it challenging for companies to predict
future results, Starbucks revised its fourth-quarter forecast. It now
expects to earn between 6 cents to 21 cents, down from its prior forecast,
released in June, of 11 cents to 36 cents. But its adjusted earnings
during that period are now estimated to be in a range of 18 cents to 33
cents, up from 15 cents to 40 cents.

Starbucks also narrowed its outlook for U.S. same-store sales for the
remainder of the fiscal year. Its home market’s same-store sales are
expected to shrink by 12% to 17%. The company previously forecast declines
of 10% to 20%.

In China, same-store sales are expected to be roughly flat to down 5%
during the fiscal fourth quarter. It previously estimated roughly flat
same-store sales.


--
No collusion - Special Counsel Robert Swan Mueller III, March 2019.

Donald J. Trump, 304 electoral votes to 227, defeated compulsive liar in
denial Hillary Rodham Clinton on December 19th, 2016. The clown car
parade of the democrat party ran out of gas and got run over by a Trump
truck.

Congratulations President Trump. Thank you for cleaning up the disaster
of the Obama presidency.

Under Barack Obama's leadership, the United States of America became the
The World According To Garp. Obama sold out heterosexuals for Hollywood
queer liberal democrat donors.

President Trump has boosted the economy, reduced illegal immigration,
appointed dozens of judges and created jobs.

Senile loser and NAMBLA supporter Nancy Pelosi got "Trumped" on February
5, 2020. "President Trump, Not Guilty."