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Starbucks revenue down 11% year-on-year due to COVID-19

Starbucks revenue down

Starbucks has reported consolidated net revenues of US$23.5 billion for its 2020 fiscal year, ended 27 September 2020. This is a decline of 11.3 per cent from the prior year primarily due to lost sales related to the COVID-19 outbreak.

Lost sales of approximately US$5.1 billion, relative to the company’s expectations before the outbreak, included the effects of temporary store closures, modified operations, reduced hours and reduced customer traffic.

Global comparable store sales declined 14 per cent year on year, driven by a 22 per cent decrease in comparable transactions, partially offset by a 10 per cent increase in average ticket

Americas and United States comparable store sales declined 12 per cent, driven by a 21 per cent decrease in comparable transactions, partially offset by an 11 per cent increase in average ticket

International comparable store sales were down 19 per cent, driven by a 23 per cent decline in comparable transactions, partially offset by a 5 per cent increase in average ticket.

China comparable store sales declined 17 per cent, driven by a 21 per cent decrease in comparable transactions, slightly offset by a 5 per cent increase in average ticket.

For its final quarter of fiscal year 2020, also ended 27 September, Starbucks reported consolidated net revenues of US$6.2 billion. This is a decline of 8 per cent from the prior year, primarily due to lost sales related to the COVID-19 outbreak.

Lost sales of approximately US$1.2 billion relative to the company’s expectations before the outbreak included the effects of modified operations, reduced hours, reduced customer traffic, and temporary store closures.

However, this also marks revenues approximately US$2 billion higher than the previous quarter.

The company opened 480 net new stores last quarter, yielding 4 per cent year-over-year unit growth, ending the period with 32,660 stores globally, of which 51 and 49 per cent were company-operated and licensed, respectively.

“I am very pleased with our strong finish to fiscal 2020, underpinned by a faster-than-expected recovery in our two lead growth markets, the United States and China.  These results demonstrate the continued strength and relevance of our brand, the effectiveness of the actions we’ve taken to adapt to meaningful changes in consumer behaviour and the extraordinary efforts of our green apron partners to serve our customers and communities in challenging circumstances,” says Kevin Johnson, President and CEO of Starbucks.

“The guiding principles we established at the onset of the pandemic, combined with our industry-leading digital platform and our ability to innovate rapidly, continue to fuel our recovery and provide confidence in a robust operating outlook for fiscal 2021. Our strategies are working, and I am optimistic that we will emerge from the COVID-19 pandemic as a stronger and more resilient company.”

Starbucks’ global comparable store sales declined 9 per cent in the quarter, driven by a 23 per cent decrease in comparable transactions, partially offset by a 17 per cent increase in average ticket.

Americas and United States comparable store sales declined 9 per cent, driven by a 25 per cent decrease in comparable transactions, partially offset by a 21 per cent increase in average ticket.

International comparable store sales were down 10 per cent, driven by a 15 per cent decline in comparable transactions, partially offset by a 7 per cent increase in average ticket.

China comparable store sales were down 3 per cent, with comparable transactions down 7 per cent, partially offset by a 5 per cent increase in average ticket.

Stores in the US and China comprised 61 per cent of the company’s global portfolio at the end of the quarter, with 15,337 and 4706 stores, respectively.

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