Starbucks Corp forecast 2021 earnings largely above estimates on Thursday, helped by strong online orders and a recovery in demand following the initial hit from the COVID-19 pandemic.
The coffee chain was forced to close many stores and limit operations to takeout and delivery at the height of the COVID-19 pandemic, but sales have since improved as consumers used the company’s app to order and collect at stores.
For the fourth quarter, comparable sales fell 9%, against Wall Street estimates of a 12.1% decline, as consumers gradually returned to their morning routines or shifted habits to other times of day.
Starbucks shares fell more than 1% in after-hours trading.
Chief Executive Officer Kevin Johnson said Starbucks’ recovery in the United States and China, its biggest growth markets, was faster-than-expected.
The coffee chain now expects adjusted profit for fiscal 2021 between $2.70 per share and $2.90 per share. Analysts had forecast $2.74, according to IBES data from Refinitiv.
It believes 2021 global comparable sales will rise 18% to 23%, including growth in China of 27% to 32%.
Starbucks’ recovery could be seen as lagging other restaurant chains, including Chipotle Mexican Grill Inc and large pizza companies, whose sales either remained elevated during the pandemic or have turned positive in recent weeks.
Rival coffee chain Dunkin’ Brands earlier on Thursday reported U.S. comparable store sales growth of 0.9% for the quarter.
“Most of Wall Street figured that [Starbucks] would trail other restaurant companies until things return to normal and people started going back to work at the office,” Edward Jones analyst Brian Yarbrough said.
The chain will open 1,100 net new locations globally in 2021, down from 1,400 this year, due to increased store closings.
Excluding one-time time items, Starbucks reported 51 cents per share, 20 cents more than expectations.
It also reported a 17% rise in the average ticket price during the quarter.
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