CNBC's Kate Rogers joins "Squawk Box" with the details of Starbucks' latest 8-K filing.
Starbucks expects to swing to a loss in its fiscal third quarter, predicting it lost as much as $3.2 billion in revenue due to the coronavirus pandemic.
Shares of the company fell more than 3% in early trading Wednesday. The stock, which has a market value of $92.6 billion, has fallen 10% this year.
Starbucks, which withdrew its prior outlook in April, is forecasting a net loss per share of 64 cents to 79 cents and adjusted losses per share of 55 cents to 70 cents for quarter ending June 28. But it expects that its fiscal fourth-quarter earnings will improve, predicting net income per share of 11 cents to 36 cents and adjusted earnings per share of 15 cents to 40 cents.
By the end of June, Starbucks expects weekly cash flow to be positive.
Its forecast for same-store sales growth is more grim. For the full fiscal year, the company expects same-store sales in its two largest markets — the United States and China — to decline 10% to 20%. It is forecasting flat same-store sales growth in China by the end of the fiscal fourth quarter and predicts U.S. same-store sales will remain negative.
“With each passing week, we are seeing clear evidence of business recovery, with sequential improvements in comparable store sales performance,” CEO Kevin Johnson and CFO Pat Grismer wrote in a letter to stakeholders. “The Starbucks brand is resilient, customer affinity is strong and we believe the most difficult period is now behind us.”
U.S. same-store sales tumbled 43% in May as the company reopened locations with modified hours and operations. By the end of the month, 91% of U.S. stores had been reopened. In the last week of May, same-store sales were down 32%.
About 95% of U.S. locations are open again, with the majority of closed locations located in the New York City area.
In China, same-store sales fell 21% in May, an improvement of April’s same-store sales declines of 32%. In the last week of May, same-store sales were down just 14% from a year earlier.
About 90% of Chinese cafes are back to their pre-pandemic operating hours, and 70% have full seating available. In April and May, Starbucks opened 57 net new stores in China.
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