Starbucks has reported consolidated net revenues of US$4.2 billion for the quarter ending 30 June, down 38 per cent year-on-year due to the impact of COVID-19.
Lost sales of approximately US$3.1 billion, relative to the company’s expectations before the outbreak, included the effects of temporary store closures, modified operations, reduced hours, and reduced customer traffic.
Global comparable store sales declined 40 per cent, driven by a 51 per cent decrease in comparable transactions, partially offset by a 23 per cent increase in average ticket.
“Since the beginning of the COVID-19 outbreak in January, we have taken a principled approach to navigate the crisis, true to our mission and values. Every step of the way, we have thoughtfully addressed the needs of Starbucks stakeholders and are particularly proud of the industry-leading investments we have made to support our partners while creating a safe, familiar and convenient experience for our customers,” says Kevin Johnson, President and CEO.
“Starbucks partners have risen to the occasion, and our near-term focus is to recover sales safely and responsibly by offering our customers the comfort and care that differentiate the ‘Starbucks Experience’.”
Americas comparable store sales declined 41 per cent, driven by a 53 per cent decrease in comparable transactions, partially offset by a 27 per cent increase in average ticket. United States comparable store sales were down 40 per cent, with comparable transactions down 52 per cent, partially offset by a 25 per cent increase in average ticket.
International comparable store sales were down 37 per cent, driven by a 44 per cent decline in comparable transactions, slightly offset by a 13 per cent increase in average ticket.
China comparable store sales were down 19 per cent, with comparable transactions down 27 per cent, slightly offset by a 10 per cent increase in average ticket.
International and China comparable store sales are inclusive of a benefit from value-added tax exemptions of approximately 2 per cent and 4 per cent, respectively.
In a quarter where at-home coffee consumption has soared, Starbucks Channel Development business has gained market share as customers adjust to their at-home routines. Through the Global Coffee Alliance with Nestlé, combined with the company’s ready-to-drink partners Pepsico and Tingyi, Starbucks says it has extended the ability to meet customers where they are.
“This has been a quarter where demand for at-home coffee has soared and our Channel Development business has demonstrated tremendous resilience and gained market share as customers adjust to their at-home routines,” Johnson says.
The company opened 130 net new stores in the quarter, yielding 5 per cent year-over-year unit growth, ending the period with 32,180 stores globally, of which 51 per cent and 49 per cent were company-operated and licensed, respectively.
Stores in the US and China comprised 61 per cent of the company’s global portfolio at the end of the quarter, with 15,243 and 4447 stores, respectively.
At the close of the quarter, 96 per cent of Starbucks company-operated stores were open in the US, up from 44 per cent at the beginning of the quarter, and the company saw weekly US comps steadily improve throughout the quarter. Through the quarter, the company posted all-time-high customer connection scores as customers returned, indicating the strength of the recovery across the businesses.
“We are pleased to share that the vast majority of Starbucks stores around the world have reopened and our global business is steadily recovering, demonstrating the relevance of the Starbucks brand and the trust we have built with our customers,” Johnson says.
“As we continue to drive the recovery, we are also building resilience for the future by accelerating the transformation of our business in ways that will elevate the customer and partner experience and drive long-term growth. We firmly believe that we are well positioned to regain the positive business momentum we had before the pandemic began and look forward to reigniting our ‘Growth at Scale’ agenda.”
