Quick Take: Trouble Brewing at Home for Starbucks as China Stores Lose $400 Million
What’s new: Starbucks’ China revenue plunged by $400 million from January to March when same-store sales dropped by half, a market update from the company said, as people around the country shunned coffee shops and stayed indoors to avoid catching Covid-19.
While the Seattle-based coffee chain says its China business is gradually recovering as the outbreak wanes, it expects the escalating crisis in the U.S. to hurt it at home well into the third quarter, after same-store sales there fell between 60% and 70% in the final week of March.
Background: Starbucks closed more than half of its Chinese mainland stores in late January when the Covid-19 outbreak became an epidemic.
More than 95% of its China stores have now resumed business, many with shorter business hours and less seating to meet local restrictions.
The company said it will release its latest quarterly earnings report on April 28. It foreshadowed lost China revenue for the quarter of between $400 and $430 million in a warning to investors on March 5.
Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full Caixin article in Chinese, click here.
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