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In Q1 Report, Starbucks Says Closes Over Half of Chinese Stores on Coronavirus Outbreak
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Starbucks Corp. (NASDAQ: SBUX) reported fiscal first-quarter results after markets closed Tuesday. For the quarter, the coffee giant said that it had $0.79 in earnings per share (EPS) and $7.10 billion in revenue, versus consensus estimates that called for $0.76 in EPS and $7.11 billion in revenue. The same period from last year had $0.75 in EPS and $6.63 billion in revenue.
During the quarter, global comparable store sales increased 5%, driven by a 3% increase in average ticket and a 2% increase in comparable transactions. This consisted of Americas and U.S. comparable store sales increasing 6% and international comparable store sales increasing 1%.
The company opened 539 net new stores in the second quarter, yielding 31,795 stores at the end of the quarter, a 6% increase over the prior year.
The company noted that its 2020 fiscal full year guidance is unchanged. Consensus estimates are calling for $3.05 in EPS and $28.4 billion in revenue for the fiscal full year.
Starbucks also noted that it has currently closed more than half of its stores in China and is continuing to monitor and modify the operating hours of all stores in the market in response to the outbreak of the coronavirus. This is expected to be temporary.
CEO and President Kevin Johnson commented:
Building on solid business momentum from fiscal 2019, Starbucks performed very well throughout the first quarter, including one of the strongest holiday seasons in the history of our company. As a result, we are off to a strong start in fiscal 2020. Our growth was fueled by a healthy balance of comparable sales growth and new store development, as well as continued expansion of our Global Coffee Alliance with Nestlé. Investments in our partners, beverage innovation and digital customer relationships contributed not only to strong topline growth, but also significant margin expansion in the quarter.
Shares of Starbucks closed Tuesday at $88.60, with a 52-week range of $66.20 to $99.72. The consensus analyst price target is $95.93. Following the announcement, the stock was initially up nearly 1% at $89.32 in the after-hours session.
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