Starbucks Isn't Wasting Any Time Adapting to the COVID-19 Era
Few companies have been hit as hard by the COVID-19 pandemic as Starbucks (NASDAQ: SBUX).
The java giant had to first shutter much of its store base in China, and then did the same in the U.S. and its other markets as the pandemic spread around the world. As a company that caters to office workers and other commuters who pick up a cup of joe on their way into work or during a break, Starbucks is directly threatened by the work-from-home trend, and its identity as a "third place" away from home and work where one can come to relax or catch up with a friend is also out of step with the current social distancing mores.
Financially, the pandemic has already put a serious dent in Starbucks' bank account. The company said that at the peak of the crisis in April it was losing $125 million a week in free cash flow, and the coffee chain now estimates that the coronavirus will cost it $3 billion to $3.2 billion in revenue in the third quarter, the April-June period, or close to half of its sales from the quarter a year ago. It also said on in an update on Tuesday that the pandemic would subtract $2 billion to $2.2 billion in operating income this quarter, leading to an adjusted per share loss of $0.55 to $0.70, compared to a $0.78 per share profit in the quarter a year ago. That was significantly worse than the $0.16 per-share loss that analysts had forecast.
Source Fool.com
