Starbucks coronavirus problem in China
Management is concerned over the impact of the coronavirus
Investors missed out on hearing Starbucks management raise its full-year earnings forecast on Tuesday. That announcement is on hold on concerns over what impact the coronavirus will have on sales.
China's 4,292 Starbucks stores brought in 10 percent of the company's revenue during the October-December period, so the closure will affect earnings, the company said.
CORONAVIRUS SPARKS STARBUCKS, MCDONALD'S CLOSURES IN CHINA
Starbucks had expected full-year revenue growth in the 6 percent to 8 percent range and same-store sales growth of 3 percent to 4 percent.
“We remain optimistic and committed to the long-term growth potential in China," Starbucks President and CEO Kevin Johnson said in a conference call Tuesday with analysts.
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Starbucks shares fell 1.6 percent to $87.20 in extended trading following the earnings report.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SBUX | STARBUCKS CORP. | 101.51 | -0.95 | -0.93% |
The holiday season was one of the best in the company's history.
A combination of new stores and solid foot traffic helped the Seattle-based coffee giant handily beat Wall Street's forecasts in the October-December period.
Starbucks' earnings rose 16 percent to $886 million in the fiscal first quarter. Earnings, adjusted for non-recurring items like restructuring charges, were 79 cents per share. That beat Wall Street's forecast of 76 cents.
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Starbucks said same-store sales — or sales at stores open at least 13 months — jumped 5 percent worldwide in the October-December period, ahead of analysts' forecast of 4.4 percent. Revenue was up 7 percent to $7.1 billion, in line with analysts' forecasts.
The Associated Press contributed to this article.