Starbucks To Close Up To 400 Stores, Expand Pick-Up Options
SEATTLE (CBS/AP) -- Starbucks expects to lose more than $3 billion in revenue in its fiscal third quarter due to the coronavirus pandemic, and announced it plans to close up to 400 stores in North America over the next 18 months while expanding pick-up options.
The Seattle-based coffee giant says the virus outbreak will also slash its operating income by up to $2.2 billion for the quarter, which ends June 28.
Starbucks had originally planned to open 300 net new stores in 2020, down from the original expectation of 600. Some locations are being "re-positioned" to reflect increasing customer demand for mobile orders and pick-up.
"This repositioning will include the closure of up to 400 company-operated stores over the next 18 months in conjunction with the opening, over time, of a greater number of new, repositioned stores in different locations and with innovative store formats," Starbucks CEO Kevin Johnson said in an SEC filing. "Our vision is that each large city in the U.S. will ultimately have a mix of traditional Starbucks cafés and Starbucks Pickup locations."
Starbucks says 95% of its 8,000 U.S. company-run stores are now open with varying levels of service. U.S. sales at established stores are improving but fell 32% in the last week of May. In China, same-store sales were down 14%. Starbucks expects a third-quarter adjusted loss of 55 cents to 70 cents per share, far higher than the 16-cent loss analysts expected.
Starbucks shares fell 5% to $78.55 in morning trading.
Earlier this week, rival coffee chain Dunkin' said it was looking to hire 25,000 workers nationwide.
(© Copyright 2020 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)
