Starbucks has reported a larger-than-expected fall in quarterly sales as the renewed surge in coronavirus cases in the US kept customers at home.
The world’s largest coffee chain’s global same-store sales fell 5 per cent in its first quarter, which ended December 27, more than analysts’ estimates of a 3.4-per-cent decline, according to Refinitiv IBES data.
In China, Starbucks’ biggest growth market, comparable sales rose 5 per cent as the company benefited from the popularity of its rewards program and the return of pre-coronavirus consumer habits.
Customers also spent more money per order, helping to offset fewer transactions.
However, comparable sales declined 6 per cent in the Americas region after the second wave of Covid-19 infections and accompanying restrictions dented traffic at the coffee chain’s stores there and in other international markets, hampering its efforts to boost demand through product launches and new drive-thrus.
Starbucks also said Chief Operating Officer Roz Brewer would be leaving the company next month. She will be taking up the role of CEO at Walgreens Boots Alliance effective March 15.
For the second quarter, Starbucks said it expects US comparable sales to rise between 5 per cent and 10 per cent, while in China they were forecast to grow nearly two-fold a year after the pandemic hit the region.
The company did not change its guidance of an expected rebound overall this year, with global comparable sales expected to rise 18-23 per cent this year.
Net revenue fell 5 per cent to $6.7 billion, missing expectations of $6.93 billion.
The Seattle-based company has been closing some stores, adding drive-thrus to others, remaking some with smaller cafes and building a few with no seating at all as it focuses on expanding to-go options.
Overall, the company opened 278 net new stores in the quarter, for 4 per cent year-on-year growth. It now has 32,938 stores around the world, 51 per cent of which are company-operated.
Starbucks also saw coffee lovers return to its Rewards loyalty program, with its count of 90-day active US members increasing 15 per cent year on year to 21.8 million.
- Reporting by Nivedita Balu in Bengaluru; Additional reporting by Hilary Russ in New York and Rama Venkat in Bengaluru; Editing by Aditya Soni and Aurora Ellis, of Reuters.