Starbucks Sees 2Q EPS Falling by About 50%

By Kimberly Chin

Starbucks Corp. said it expects a roughly 50% drop in second-quarter earnings from the year prior due to a loss in sales, as well as higher expenses, stemming from the Covid-19 outbreak's disruption of operations.

For the quarter ended March 29, the company expects GAAP earnings of 28 cents a share and adjusted earnings of 32 cents a share. In last year's second quarter, Starbucks reported GAAP earnings of 53 cents a share and adjusted earnings of 60 cents a share.

The retailer said coronavirus-related business disruptions are expected to shave off roughly 15 cents to 18 cents from its bottom line in the second quarter. This includes expenses such as worker compensation, inventory write-offs, supplier obligations and safety-related items, among other things.

The company also projected second-quarter same-store sales in the U.S. to decline by roughly 3% from the year-earlier period. Most of the Covid-19-related effects on its business has come in the final three weeks of its quarter, the company said.

Starbucks has withdrawn its fiscal 2020 guidance.

The company reports its second-quarter results on April 28.

Write to Kimberly Chin at [e-mail]

(END) Dow Jones Newswires

April 08, 2020 18:19 ET (22:19 GMT)

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