Starbucks (SBUX) - Get Free Report shares jumped higher in pre-market trading Tuesday after the world's biggest coffee chain said it expects the vast majority of its company-owned U.S. stores will re-open by the end of the week.
In a letter from CEO Kevin Johnson, published late Monday, Starbucks said 85% of its company-owned stores would be 'responsibly' re-opened this week, with at least 90% opened by early June, albeit under 'modified operations and hours' that are likely to reflect social distancing guidelines. Johnson also noted that nearly all of its stores are back up-and-running in China, it's second largest market.
"The foundation of our approach comes from what we have learned in China, where more than 98% of our stores are now open and operating under revised protocols," Johnson said. "We have adapted these protocols for the U.S. and our goal is to exceed the standards outlined by the Centers for Disease Control and Prevention for a safe experience, including heightened emphasis on cleaning and sanitizing protocols in our stores."
"We are putting immense emphasis on the safest and most convenient way for customers to order their favorites from Starbucks,|" he added. "Nearly 20 million customers are using the Starbucks App as part of their daily routines and as those routines evolve, we’ll be finding ways to tailor the app to customers’ individual needs."
Starbucks shares were marked 3% higher in pre-market trading Tuesday to indicate an opening bell price of $74.05 each, a move that would trim the stock's year-to-date decline to around 15.8%.
Starbucks is also set to benefit from a scandal that continues to plague its main China rival, Luckin Coffee (LK) - Get Free Report, which is facing multiple probes in both its home market and in the United States over the alleged fabrication of more than $300 million in 2019 sales.
Luckin said last month that it's being investigated by market regulators in China and its "actively cooperating" with the State Administration for Market Regulation in Beijing after it reportedly raided the company's headquarters in late April. The Nasdaq, meanwhile, said Monday that shares in the group remain halted, following their first cessation on April 6,
Luckin shares plummeted more than 75.5% on April 2 following news of its internal investigation to close at $6.40 each. They last traded at $6.39 each on April 6, giving it a market value of just over $1.1 billion.
Beijing-based Luckin listed on the Nasdaq in May of last year with a market value of $4.2 billion after pricing its IPO at $17 each. It raised another $1.1 billion in a secondary offering in early January.