Starbucks Corporation (NASDAQ:SBUX) issued weak preliminary earnings forecast for the second quarter. Starbucks has withdrawn its outlook for FY 2020. The company had $2.5 billion of cash and cash equivalents on its balance sheet at the end of the second-quarter.
The Seattle-based coffee chain reported preliminary FQ2 EPS of $0.32, below analyst consensus estimate $0.39, as business disruption related to COVID-19 in China hurt results by $0.15-0.18.
The withdrawal of full-year guidance is attributed to the dynamic nature of the crisis, which SBUX says renders it unable to estimate the full financial impacts beyond Q2 with reasonable accuracy, but it expects the negative financial impacts to Q3 will prove "significantly greater" than in Q2 and extend into Q4.
In the U.S., Starbucks says comparable store sales fell ~3% Y/Y in Q2, reflecting the rapid onset of Covid-19 business impacts in the final three weeks of the quarter.
The company says it does not plan to cut its dividend but will temporarily suspend its share buyback program, while taking steps to delay expenditures and reduce costs.
SBUX shares lost 25 cents early Thursday to $71.32.
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