(Bloomberg) – Starbucks Corp CEO Kevin Johnson said an important aspect of sales turned positive in July – a sign that the coffee giant’s recovery from the Kovid-19 lockdown is steaming. Shares gained 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 US comparable-store sales, a key gauge of restaurant performance, were positive in the month of July with 3,100 company-operated stores open during the entire quarter, which ended on June 28. For comparison, the company operates more than 8,800 stores in the US overall.
This may indicate a inflection point after Starbucks’ business emerged in China early in the first year and then in the rest of the world due to the global epidemic. Titan, another restaurant at McDonald’s Corp, reported a similar trend on Tuesday, with similar US sales being slightly positive this month.
Nevertheless, the coronovirus effect is clear: global same-store sales fell 40% in the fiscal third quarter, passing June 28. This is slightly better than estimates from consensus metrics. Meanwhile, revenue was $ 4.2 billion, beating analysts’ average projection.
Starbucks, like its restaurant peers around the world, is trying to adapt to a new normal where diners prefer to order delivery and hardly anyone popped in for a latte on the way to work or school . The coffee seller accelerated the rollout of its “pick” store concept this summer, with smaller locations that don’t have customer seating, but with fewer drive-throughs and lower delivery penetration than some rivals , There is a lot of work in the chain to attract customers in the new era of consumer caution.
The coffee chain sees same-store sales of 12% to 17% for the entire fiscal year, one of the first restaurant companies to offer an outlook amid the 2020 epidemic. The Kovid-19 will have “moderate” impact. During the current quarter, the company said.
It is estimated that its comparable sales for all US stores will decline by about 14% in the July fiscal year – a gradual improvement from June’s 19% decline. The company said it returned some US operations this month following a regional coronavirus flapup.
In China, a major market for Starbucks that coincided with its recovery from Kovid-19, comparable store sales declined 19% this quarter, and the company saw the business recover substantially by the end of the current calendar year Still working. In the US, same-store sales were down 40%.
But when total transactions are lower, when customers treat themselves to Starbucks, they spend more. The average ticket – or total bill – globally was 23% this quarter.
Starbucks shares rose 7.2% in late trading, with Johnson following the uptick that comparable sales in July were positive. The stock has fallen 15% since Tuesday’s close.
(Update to include CEO comments on July-par sales and share moves.)
For more such articles, please visit bloomberg.com
Subscribe now to stay ahead with the most reliable business news source.
© 2020 Bloomberg LP