Starbucks (SBUX) - Get Report said its fiscal second-quarter earnings will be cut nearly in half as sales plunged in the U.S. and China, the coffee-chain's two biggest markets, because of the coronavirus pandemic.
The company estimated that adjusted earnings in the period would be 32 cents a share, down from 60 cents a year earlier.
Analysts' most recent estimates called for second-quarter earnings of 39 cents a share.
"These estimates reflect the impact of lost sales for the period as well as incremental expenses for partner wages and benefits, store operations and other activities related to the Covid-19 outbreak," Starbucks said. "This includes inventory write-offs, honoring supplier obligations, store safety-related items, asset impairments and preliminary estimates of certain government stimulus program benefits."
Starbucks also pulled its fiscal-year guidance.
“Given the dynamic nature of the Covid-19 crisis and how it is affecting our business globally, we are currently unable to estimate the full financial impacts beyond Q2 with reasonable accuracy,” said a letter to shareholders signed by CEO Kevin Johnson and Chief Financial Officer Patrick Grismer.
The company said U.S. same-store sales fell 3% during its second quarter, with the bulk of the declines coming after March 12, when many Americans were given stay-at-home orders because of the virus outbreak and Starbucks was forced to close stores.
Starbucks said same-store sales declines settled between 60% and 70% during the final week of March.
Same-store sales in China plunged 50% during the period but sales have been on an upswing as China loosens lockdown restrictions.
The stock was down 3.31% to $69.20 in premarket trading Thursday.