Starbucks Corp predicts that by 2021, earnings will be significantly higher than Thursday’s expectations, thanks to strong online orders and a rebound in demand after the initial blow of the COVID-19 pandemic.
The coffee chain was forced to close many stores and restrict receiving and delivery during the peak of the COVID-1
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In the fourth quarter, comparable sales fell by 9%, while Wall Street’s expectation was a 12.1% drop due to consumers gradually returning to morning habits or shifting habits to other times of the day.
In after-hours trading, Starbucks shares fell more than 1%.
CEO Kevin Johnson stated that Starbucks is recovering faster than expected in the US and China (its largest growth market).
The coffee chain now expects adjusted profits for fiscal 2021 to be between $2.70 and $2.90 per share. According to Refinitiv’s IBES data, analysts had previously predicted that it was $2.74.
It believes that global comparable sales will increase by 18% to 23% in 2021, of which China will increase by 27% to 32%.
Starbucks’ recovery may be seen as lagging behind other restaurant chains, including Chipotle Mexican Grill Inc and large pizza companies, whose sales have remained high during the pandemic or have improved in recent weeks.
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Rival coffee chain “Dunkin’ Brands” announced earlier on Thursday that comparable store sales in the United States increased 0.9% this quarter.
“Most people on Wall Street think [Starbucks] Edward Jones analyst Brian Yarbrough said it will lag behind other catering companies until things return to normal and people start working in the office.
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Due to the increase in store closures, the chain will open 1,100 net new locations worldwide in 2021, down from 1,400 this year.
Excluding one-time items, Starbucks reported 51 cents per share, 20 cents higher than expected.
It also reported a 17% increase in average airfare prices during the quarter.
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