Starbucks Sees $3.2 Billion Virus Hit, Plans New Cafe Format

[marmar]

(Bloomberg) -- Starbucks Corp. expects the coronavirus pandemic to reduce sales this quarter by as much as $3.2 billion, dragging down the coffee chain’s performance as it sees a recovery stretching into next year.

The company, which like other restaurants has had a difficult time offering guidance, said Wednesday it expects to report an adjusted loss of 55 to 70 cents a share when it next releases earnings. Operating income will decline as much as $2.2 billion in the period, the company said in a statement.

The guidance underscores the depth of the challenges for consumer-facing businesses from the coronavirus outbreak and worldwide lockdowns. The coffee seller, which is exploring new store formats to stimulate demand, is being closely watched as a barometer of customers’ willingness to leave their homes and open their wallets as the pandemic subsides.

“These numbers are a lot worse than the Street was expecting,” said Michael Halen, senior restaurant analyst at Bloomberg Intelligence. “People expect some sort of crazy snapback but it’s not going to materialize in restaurants.” ...........(more)

Read more at: https://www.bloombergquint.com/onweb/starbucks-sees-potential-3-2-billion-sales-hit-from-pandemic

[happybird]

1. I'm surprised

Figured they were making money hand over fist. The Starbucks in town has had a constant line at the drive thru that stretches around the building and into the nearby grocery store parking lot.

It’s right next to the UPS store where I drop my Amazon returns. The third time I was in and saw the huge line (and had to cross through it to get to UPS), I asked the clerk of it was always like that. He said yes, the entire time they are open, since the beginning of quarantine.

[SoCalNative]

2. They closed a bunch of there stores throughout the country

for at least a month, perhaps longer. I'm sure a lot of their franchisees may have done the same so lost income from there as well.

That probably had something to do with the big loss.

[marmar]

3. I've noticed that too with a drive-in Starbucks near me, but....

..... I think that they just can't do the same volume of business doing exclusively drive-thru. Also, the walk-in locations in downtowns all over the country have been closed completely.

[CrispyQ]

4. They might be able to force workers back to work, but in the end, consumers will decide when to open

I see sheltering-in-place through the end of the year, possibly longer.

[murielm99]

5. Same here.

We will keep sheltering in place. I need a haircut just as badly as those whiners. But why bother? I am not going anywhere.

[orwell]

6. Not a fan of Starbucks...

...I make much better coffee at home for much less money.