Starbucks reports a 40% decline in global same-store sales in Q3

Starbucks (NASDAQ: SBUX) released its quarterly financial results on Tuesday which revealed the company to have swung to a net loss in the third quarter. The company attributed the decline to the Coronavirus pandemic that fuelled a 40% decline in its global same-store sales.

Shares of the company were reported about 6% up in extended trading on Tuesday. At £60.84 per share, Starbucks is currently more than 10% down year to date in the stock market after recovering from a low of £43.45 per share in March. Learn more about the stock market volatility.

Starbucks’ Q3 financial results versus analysts’ estimates

According to Refinitiv, experts had forecast the company to print £3.14 billion in revenue for the quarter that ended on 28^th June. Their estimates for loss per share was capped at 45.51. In its report on Tuesday, Starbucks topped both estimates posting a higher £3.25 billion in revenue and lower 35.48 pence of adjusted loss per share in Q3.

At £523.26 million, the global coffee chain said that its net loss in the third quarter came in significantly weaker than £1.06 billion of net income in the same quarter last year. On a year over year basis, its net sales were also reported 38% lower. Starbucks had estimated a £2.50 billion hit to its Q3 revenue in June due to COVID-19.

The Seattle-based company also reported a 40% decline in its U.S. comparable-store sales. It, however, accentuated that customers spent more in the recent quarter as evident by its average check printing 23% higher. Orders from loyal customers were 5% lower in the third quarter.

In China, Starbucks said that signs of recovery were evident as same-store sales dropped a much lower 19% in the region in Q3. 12% of the total orders in China were for delivery. Despite COVID-19, the company opened 130 new cafes internationally in the third quarter.

Starbucks’ financial guidance for the fourth quarter

Starbucks also raised its financial outlook for the fourth quarter. It now forecasts its adjusted earnings per share to lie in the range of 13.88 to 25.45 pence. For the full-year, the American multinational chain of coffeehouses expects a 12% to a 17% decline in its U.S. same-store sales. In China, it estimates its comparable-store sales to remain flat or see a 5% decline in Q4.

At the time of writing, the global chain of coffeehouses has a market cap of £67.25 billion and a price to earnings ratio of 26.56.