Starbucks Reports Q2 Fiscal 2020 Results

Q2 Consolidated Net Revenues of $6.0 Billion, Down 5% from Prior Year Due to Adverse Impact of COVID-19

Q2 GAAP EPS of $0.28; Non-GAAP EPS of $0.32 Reflecting Material Sales Deleverage and Retail Partner Support

COVID-19 Impacts Expected to Intensify in Q3 and Moderate in Q4

Substantial Recovery in China Expected by End of Fiscal 2020

SEATTLE – Starbucks Corporation (NASDAQ: SBUX) today reported financial results for its 13-week fiscal second quarter ended March 29, 2020.  GAAP results in fiscal 2020 and fiscal 2019 include items which are excluded from non-GAAP results.  Please refer to the reconciliation of GAAP measures to non-GAAP measures at the end of this release for more information.

“People around the world are united around a common cause as we navigate the COVID-19 situation globally.  We are very grateful for the heroic efforts of medical personnel, first responders, government officials and volunteers who are working tirelessly in the service of others.  I am exceptionally proud of the thousands of Starbucks partners around the world who are safely serving customers and playing a positive role in every community we serve,” said Kevin Johnson, president and ceo. 

“Since the beginning of this global crisis, Starbucks has made decisions that prioritize the well-being of our partners and customers, support health and government officials, and responsibly serve our communities.  This principled approach is showing steady business improvement in China where today, substantially all existing Starbucks® stores have reopened with modified operations, new store locations are being added and customer engagement continues to grow with each passing week.  We are leveraging our experience in China to inform our actions in other markets, including the U.S., where we are now entering the “monitor and adapt” phase to reopen many more stores with best-in-class safety protocols.  We continue to navigate this dynamic situation — which we believe is temporary — and are confident that Starbucks will emerge from this global crisis even stronger than before,” concluded Johnson.

PDF: Detailed financial data

Q2 Fiscal 2020 Highlights

• Global comparable store sales declined 10%, driven by a 13% decrease in comparable transactions, partially offset by a 4% increase in average ticket
  • Americas and U.S. comparable store sales declined 3%, driven by a 7% decrease in comparable transactions, partially offset by a 5% increase in average ticket
  • International comparable store sales were down 31%, driven by a 32% decline in comparable transactions, slightly offset by a 1% increase in average ticket; China comparable store sales were down 50%, with comparable transactions down 53%
• The company opened 255 net new stores in Q2, yielding 6% year-over-year unit growth, ending the period with 32,050 stores globally, of which 51% and 49% were company-operated and licensed, respectively
  • Stores in the U.S. and China comprised 61% of the company's global portfolio at the end of Q2, with 15,257 and 4,351 stores, respectively
• Consolidated net revenues of $6.0 billion declined 5% from the prior year due to lost sales related to the COVID-19 outbreak
  • Lost sales include the effects of temporary store closures, modified operations, reduced hours and reduced customer traffic
• GAAP operating margin contracted 550 basis points year-over-year to 8.1%, primarily due to sales deleverage and additional costs incurred in response to the COVID-19 outbreak, mainly catastrophe wages as well as enhanced pay programs and additional benefits in support of retail store partners, inventory write-offs and store safety items
  • Non-GAAP operating margin of 9.2% contracted 660 basis points compared to the prior year
• GAAP Earnings Per Share of $0.28, down 47% from the prior year primarily due to unfavorable impacts related to the COVID-19 outbreak
  • Non-GAAP EPS of $0.32, down 47% from the prior year
• Starbucks® Rewards loyalty program grew to 19.4 million active members in the U.S., up 15% year-over-year

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