By Nivedita Balu and Hilary Russ
(Reuters)- Starbucks Co., Ltd. (NASDAQ :) On Tuesday, it reported quarterly sales were significantly lower than expected as a new surge in coronavirus cases in the United States kept customers home.
Global same-store sales for the world’s largest coffee chain fell 5% in the first quarter, ending December 27, above analysts’ estimates of 3.4%, according to Refinitiv IBES data.
Stock prices fell slightly in long-term trading.
The second wave of COVID-19 infection and its associated restrictions reduced traffic in coffee chain stores, hampering efforts to increase demand through product launches and new drive-throughs.
Equivalent sales in the Americas were down 6%, compared to the 5.2% decline analysts expected.
However, in Starbucks’ largest growth market, China, comparable sales increased by 5%, benefiting from the popularity of reward programs and the resurgence of pre-coronavirus consumer habits.
Customers also helped to spend more money on each order and offset fewer transactions.
Starbucks also said that Chief Operating Officer Ros Brewer will leave the company next month and take on the role of CEO at another company.
Walgreens Boots Alliance (NASDAQ :) Inc later announced that Brewer will take command of the company on March 15.
Starbucks predicts comparable US sales will increase between 5% and 10% in the second quarter, while in China it nearly doubles a year after a pandemic hit the region. He said he expects to grow.
The company has not changed its expected rebound guidance this year as a whole, and is expected to increase global comparable sales by 18% to 23% in 2021.
Net sales were down 5% to $ 6.7 billion, below expectations of $ 6.93 billion.
The Seattle-based company is focused on expanding take-away options, so it closed some stores, added drive-throughs to other stores, rebuilt some in a small cafe, and seated. We are building some stores that are not.
Overall, the company opened 278 net new stores this quarter, growing 4% year-over-year. Currently, there are 32,938 stores worldwide, 51% of which are directly managed stores.
Starbucks also saw coffee lovers return to their rewards loyalty program. The number of 90-day active US members increased by 15% year-on-year to 21.8 million.
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Starbucks sales are declining as virus surges keep customers home By Reuters
https://www.investing.com/news/stock-market-news/starbucks-posts-biggerthanexpected-drop-in-comparable-sales-2399500 Starbucks sales are declining as virus surges keep customers home By Reuters