Summary
Starbucks Corporation (SBUX) reported a challenging third quarter ending June 28, 2020, significantly impacted by the COVID-19 pandemic. Total net revenues decreased by 38.1% year-over-year to $4.22 billion. The company experienced a net loss of $678.4 million, or $0.58 per share, a stark contrast to the net earnings reported in the prior year's comparable period. This downturn was primarily driven by widespread temporary store closures, reduced customer traffic, and modified operations across its global store base, particularly in the Americas and International segments. Despite the significant headwinds, Starbucks demonstrated resilience by nearly completing its store reopenings by the end of the quarter and saw sequential improvement in comparable store sales as the period progressed. The company also took proactive measures to manage costs, including workforce adjustments, and benefited from government subsidies. Starbucks ended the quarter with $3.97 billion in cash and cash equivalents, indicating a solid liquidity position to navigate the ongoing uncertainties and support its recovery efforts. Management expressed optimism for a return to profitability in the fiscal fourth quarter, contingent on continued business recovery and the absence of significant COVID-19 relapses.
Financial Highlights
53 data points| Revenue | $4.22B |
| Operating Expenses | $4.99B |
| Operating Income | -$703.90M |
| Interest Expense | $120.80M |
| Net Income | -$678.40M |
| EPS (Basic) | $-0.58 |
| EPS (Diluted) | $-0.58 |
| Shares Outstanding (Basic) | 1.17B |
| Shares Outstanding (Diluted) | 1.17B |
Key Highlights
- 1Total net revenues declined 38.1% to $4.22 billion due to COVID-19 impacts.
- 2The company reported a net loss of $678.4 million, or $0.58 per diluted share, compared to a net profit in the prior year.
- 3Global comparable store sales decreased by 40%, with a 51% drop in transactions, highlighting the severe impact of the pandemic.
- 4Store operating expenses as a percentage of revenue significantly increased due to sales deleverage and COVID-19 related costs.
- 5The company maintained a strong liquidity position with $3.97 billion in cash and cash equivalents as of June 28, 2020.
- 6Starbucks announced plans to close up to 400 stores in the U.S. and 200 in Canada over the next 18-24 months as part of portfolio optimization.
- 7Management expects a return to profitability in the fiscal fourth quarter, anticipating continued improvement in comparable store sales.