Starbucks says it lost $1.2 billion in fiscal Q4 sales because of the pandemic - Trade Stocks

Starbucks says it lost $1.2 billion in fiscal Q4 sales because of the pandemic

By Thu, Oct 29, 2020

Starbucks Corp. beat Wall Street expectations for its fiscal fourth quarter, but said it had lost more than $1 billion in sales because of the pandemic and called for slimmer profits in the next quarter.

Starbucks SBUX, +1.29% said it earned $393 million, or 33 cents a share, in the quarter, compared with $803 million, or 67 cents a share, in the year-ago quarter, “primarily due to unfavorable impacts related to the COVID-19 outbreak” that chipped away at its profit at a clip of about 35 cents a share, it said.

Adjusted for one-time items, the company earned 51 cents a share, compared with 70 cents a share a year ago. Sales fell 8% to $6.2 billion, the company said.

Lost sales due to the pandemic totaled about $1.2 billion, mostly due to modified operations, reduced hours, reduced customer traffic and temporary store closures amid the pandemic, the company said. Same-store sales fell 9%.

Analysts polled by FactSet had expected the retailer to report adjusted earnings of 31 cents a share on sales of $6.06 billion.

“I am very pleased with our strong finish to fiscal 2020, underpinned by a faster-than-expected recovery in our two lead growth markets, the U.S. and China,” Chief Executive Kevin Johnson said in a statement.

Shares rose immediately after the report, but turned lower and were recently down 0.9%.

The stock ended the regular trading day up 1.3%; it has gained about 0.4% this year, compared with a rise around 2.5% for the S&P 500 index SPX, +1.19%.

“The guiding principles we established at the onset of the pandemic, combined with our industry-leading digital platform and our ability to innovate rapidly, continue to fuel our recovery and provide confidence in a robust operating outlook for fiscal 2021,” Johnson said.

Starbucks guided for its fiscal first quarter and full-year fiscal 2021, forecasting global same-store sales growth between 18% and 23% and revenue between $28 billion and $29 billion for 2021.

The retailer said it expects a GAAP EPS in a range between 32 cents and 37 cents for the fiscal first quarter and between $2.34 and $2.54 for the full year.

Adjusted EPS was seen between 50 cents and 55 cents for the first quarter and between $2.70 and $2.90 for 2021.

That compares with expectations of an adjusted EPS of 63 cents for the fiscal first quarter, according to FactSet. The FactSet consensus also calls for an adjusted EPS around $2.73 for the full year.

Capital expenditures were pegged at around $1.9 billion for the year.

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