Q3 Consolidated Net Revenues of $4.2 Billion, Down 38% from Prior Year Due to Adverse Impact of COVID-19

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Q3 GAAP EPS of -$0.58; Non-GAAP EPS of -$0.46 Reflecting Material Sales Deleverage and Retail Partner Support

COVID-19 Impacts Expected to Moderate Meaningfully in Q4 as Recovery Continues

SEATTLE; Starbucks Corporation (NASDAQ: SBUX) today reported financial results for its 13-week fiscal third quarter ended June&nbsp;28, 2020.&nbsp; GAAP results in fiscal 2020 and fiscal 2019 include items that are excluded from non-GAAP results.&nbsp; Please refer to the reconciliation of GAAP measures to non-GAAP measures at the end of this release for more information.

“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.&nbsp; 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.&nbsp; 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,” said Kevin Johnson, president and ceo.

“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.&nbsp; 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.&nbsp; 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,” concluded Johnson.

PDF: <a href="https://stories.starbucks.com/uploads/2020/07/Starbucks-Q3-FY20-Earnings-Release.pdf">Detailed financial data</a>

Q3 Fiscal 2020 Highlights

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Visit the <a href="https://investor.starbucks.com/ir-home/default.aspx" target="_blank" rel="noreferrer noopener">Investor Relations page </a>to access the <a href="https://78449.themediaframe.com/dataconf/productusers/sbux/mediaframe/33694/indexl.html" target="_blank" rel="noreferrer noopener">live audio webcast</a>.

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(1) In this release, we estimate the impact of COVID-19 by comparing actual results to our previous forecasts.&nbsp; These forecasts were created prior to the spread of the virus and were based on information available at the time and on a variety of assumptions which we believe were reasonable, some or all of which may prove not to be accurate.

(2) In this release, the EPS impact of COVID-19 represents an approximation based on the estimated impact of the pandemic on operating results. It does not incorporate any impacts of COVID-19 on non-operating items, such as interest income, interest expense, income taxes and outstanding shares.

Starbucks today reported financial results for its 13-week fiscal third quarter ended June 28, 2020.

Starbucks Reports Q3 Fiscal 2020 Results

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"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," said Kevin Johnson.

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Starbucks today announced its Q3 FY20 earnings results, providing insight into the company’s continued road to recovery from the COVID-19 pandemic. Full details on the company’s financial results, can be found <a href="https://stories.starbucks.com/press/2020/starbucks-reports-q3-fiscal-2020-results/" target="_blank" rel="noreferrer noopener">here</a>.

As part of Starbucks quarterly earnings call, Starbucks president and ceo Kevin Johnson will provide specifics on the improving business results the company is driving through COVID-19 as well as details of how Starbucks is playing offense by accelerating key strategic initiatives that further differentiate Starbucks and reinforce the long-term, sustainable growth opportunity ahead.

“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,” said Johnson. “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.”

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1. Starbucks recovery strategy is working as company sees meaningful improvements in both sales and profitability as the quarter unfolded: At the close of Q3,96% of Starbucks company-operated stores were open in the U.S. (up from 44% at the beginning of the quarter), and the company saw weekly U.S. 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.

On the call with investors, Johnson shared, “With the vast majority of stores around the world now reopened, we saw meaningful improvements in both sales and profitability as the quarter unfolded. Additionally, customer affinity for Starbucks is very strong as demonstrated by improvements in our customer connection scores, growth in customer loyalty, and market share gains.&nbsp; While we anticipate these improvements to continue, our balance sheet and the strategic actions we have taken have positioned Starbucks to weather a more protracted disruption in global economic activity.”

2. Company stays ahead of evolving customer behaviors with flexible store and digital experiences: Today, customers are seeking safe, familiar, and convenient experiences in many aspects of their lives—and in that regard, Starbucks digital assets have proven to be a competitive advantage. Mobile Order and Pay reached a record 22% of transactions in Q3, thanks in part to the contactless approach in stores. Delivery usage tripled in Q3 from the prior quarter and, Starbucks has begun rolling out curbside pickup with positive early results. Further, with plans for 700-1,000 Curbside locations and 50 new Starbucks PickUp locations, the company is well positioned to drive further recovery by increasing throughput.

Johnson further noted, “In response to clear shifts in consumer behavior and preferences, we are now accelerating strategic initiatives for the future and positioning Starbucks for continued long-term growth.&nbsp; We have moved aggressively to advance our evolution of the store base to accommodate trends that we have long seen emerging in our business that were only exacerbated by COVID-19.

3. Starbucks sees growing customer loyalty and readies to enhance the program this Fall: In Q3, the Starbucks Rewards™ loyalty program as a percentage of tender rose four percentage points from a year ago to 46% - above the pre-COVID trend – with year-over-year sales growth from Starbucks Rewards customers turning positive in early July. Earlier this month, the company <a href="https://stories.starbucks.com/stories/2020/starbucks-to-offer-rewards-members-more-ways-to-pay-and-earn-stars/">announced plans to build on this momentum in the Fall</a>, when it introduces a new, pay-as-you-go option for Starbucks Rewards members in the U.S. and Canada.

To investors, Johnson offered, “In every industry, there are periods of disruption that create great opportunity for those businesses that adapt to the disruption, invest in relevant ways, and strengthen their differentiation and competitive advantage. Those businesses that fail to evolve, typically fall behind. Given the strength of our brand, our advanced digital capabilities and our strong balance sheet, I believe this is one of those rare opportunities to move aggressively and further differentiate Starbucks from our competition.”

4. Demand for Starbucks at-home coffee soars: 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 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 said.

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Starbucks today announced its Q3 FY20 earnings results, providing insight into the company’s continued road to recovery from the COVID-19 pandemic.

Starbucks provides financial report for Q3 Fiscal Year 2020 results

Key takeaways from Starbucks Q3 FY20 earnings results

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Q3 FY20

Q3 FY20 - Starbucks Stories

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