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Starbucks
🇺🇸 NASDAQ:SBUX
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Jun 28, 2020

Starbucks Q3 2020 Earnings Report

Starbucks Q3 2020 financial results were negatively impacted by the COVID-19 outbreak, but the global business is steadily recovering.

Key Takeaways

Starbucks Q3 fiscal year 2020 results were significantly impacted by the COVID-19 pandemic, with consolidated net revenues declining by 38% to $4.2 billion. The company experienced a GAAP EPS of -$0.58 and a non-GAAP EPS of -$0.46, reflecting sales deleverage and investments in retail partner support. However, the company noted that the vast majority of stores have reopened and the global business is steadily recovering.

Global comparable store sales decreased by 40% due to a 51% decline in comparable transactions, partially offset by a 23% increase in average ticket.

The company opened 130 net new stores, resulting in 5% year-over-year unit growth, with a total of 32,180 stores globally.

Consolidated net revenues decreased by 38% to $4.2 billion, primarily due to lost sales related to the COVID-19 outbreak.

GAAP operating margin was -16.7%, and non-GAAP operating margin was -12.6%, primarily due to the COVID-19 outbreak.

Total Revenue
$4.22B
Previous year: $6.82B
-38.1%
EPS
-$0.46
Previous year: $0.78
-159.0%
Global Comp Sales Growth
-40%
0
Total Global Stores
32.18K
Gross Profit
$200M
Previous year: $1.98B
-89.9%
Cash and Equivalents
$3.97B
Previous year: $4.76B
-16.7%
Free Cash Flow
-$748M
Previous year: $734M
-201.8%
Total Assets
$29.1B
Previous year: $20.9B
+39.5%

Starbucks

Starbucks

Starbucks Revenue by Segment

Starbucks Revenue by Geographic Location

Forward Guidance

The company expects the adverse impacts of the COVID-19 outbreak to moderate meaningfully in Q4 FY20.

Positive Outlook

  • Global comparable store sales declines of 12% to 17% for Q4.
  • Americas and U.S. comparable store sales declines of 12% to 17% for Q4.
  • International comparable store sales declines of 10% to 15% for Q4, inclusive of a benefit from value-added tax exemption of approximately 3%.
  • China comparable store sales roughly flat to -5% for Q4, inclusive of a benefit from value-added tax exemption of approximately 4%.
  • Non-GAAP EPS in the range of $0.18 to $0.33 for Q4.

Challenges Ahead

  • Consolidated revenue decline of 10% to 15% for Q4.
  • Channel Development revenue decline of 5% to 6% for full year.
  • GAAP EPS in the range of $0.06 to $0.21 for Q4.
  • Capital expenditures of approximately $1.5 billion.
  • Interest expense of approximately $435 million to $445 million.

Revenue & Expenses

Visualization of income flow from segment revenue to net income

Company Overview

Full financial data and analysis

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