Starbucks sees hotter-than-expected earnings for 2021

By Nivedita Balu and Hilary Russ (Reuters) - Starbucks Corp forecast 2021 earnings largely above estimates on Thursday, helped by strong online orders and a recovery in demand following the initial hit from the COVID-19 pandemic.

Reuters October 30, 2020 05:05:09 IST
Starbucks sees hotter-than-expected earnings for 2021

Starbucks sees hotterthanexpected earnings for 2021

By Nivedita Balu and Hilary Russ

(Reuters) - Starbucks Corp forecast 2021 earnings largely above estimates on Thursday, helped by strong online orders and a recovery in demand following the initial hit from the COVID-19 pandemic.

The coffee chain was forced to close many stores and limit operations to takeout and delivery at the height of the COVID-19 pandemic, but sales have since improved as consumers used the company's app to order and collect at stores.

For the fourth quarter, comparable sales fell 9%, against Wall Street estimates of a 12.1% decline, as consumers gradually returned to their morning routines or shifted habits to other times of day.

Starbucks shares fell more than 1% in after-hours trading.

Chief Executive Officer Kevin Johnson said Starbucks' recovery in the United States and China, its biggest growth markets, was faster-than-expected.

The coffee chain now expects adjusted profit for fiscal 2021 between $2.70 per share and $2.90 per share. Analysts had forecast $2.74, according to IBES data from Refinitiv.

It believes 2021 global comparable sales will rise 18% to 23%, including growth in China of 27% to 32%.

Starbucks' recovery could be seen as lagging other restaurant chains, including Chipotle Mexican Grill Inc and large pizza companies, whose sales either remained elevated during the pandemic or have turned positive in recent weeks.

Rival coffee chain Dunkin' Brands earlier on Thursday reported U.S. comparable store sales growth of 0.9% for the quarter.

"Most of Wall Street figured that [Starbucks] would trail other restaurant companies until things return to normal and people started going back to work at the office," Edward Jones analyst Brian Yarbrough said.

The chain will open 1,100 net new locations globally in 2021, down from 1,400 this year, due to increased store closings.

Excluding one-time time items, Starbucks reported 51 cents per share, 20 cents more than expectations.

It also reported a 17% rise in the average ticket price during the quarter.

(Reporting by Nivedita Balu in Bengaluru and Hilary Russ in New York; Editing by Shounak Dasgupta, Aurora Ellis and Richard Pullin)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Donations under $8K to Trump ‘election defense’ instead go to president, RNC
World

Donations under $8K to Trump ‘election defense’ instead go to president, RNC

By Jarrett Renshaw and Joseph Tanfani (Reuters) - As President Donald Trump seeks to discredit last week's election with baseless claims of voter fraud, his team has bombarded his supporters with requests for money to help pay for legal challenges to the results: “The Left will try to STEAL this election!” reads one text. But any small-dollar donations from Trump's grassroots donors won't be going to legal expenses at all, according to a Reuters review of the legal language in the solicitations

Saudi king urges world to take 'decisive stance' against Saudi's regional foe Iran
World

Saudi king urges world to take 'decisive stance' against Saudi's regional foe Iran

RIYADH (Reuters) - Saudi Arabia's King Salman bin Abdulaziz urged the world on Thursday to take "a decisive stance" to address efforts by Iran to develop nuclear and ballistic missile programs, in an annual address to the top government advisory body. "The kingdom stresses the dangers of Iran's regional project, its interference in other countries, its fostering of terrorism, its fanning the flames of sectarianism ..

Belize voters want 'change' as they pick next PM
World

Belize voters want 'change' as they pick next PM

By Jose Sanchez BELIZE CITY (Reuters) - Belizeans headed to the polls on Wednesday to replace a veteran prime minister, with many in the tiny Central American country saying they were ready for change to repair an economy battered by pandemic-driven shutdowns. Dean Barrow, the outgoing prime minister, ran Belize for more than a dozen years.