Starbucks Corp (NASDAQ: SBUX) reported Q2 EPS of $0.32, $0.02 worse than the analyst estimate of $0.34. Revenue for the quarter came in at $6 billion versus the consensus estimate of $5.89 billion.

• Global comparable store sales declined 10%, driven by a 13% decrease in comparable transactions, partially offset by a 4% increase in average ticket

Fiscal 2020 Guidance:

To protect the health and well-being of our partners and customers—and in support of efforts to control the spread of the COVID-19 outbreak—currently, we have temporarily closed approximately 50% of our company-operated stores in the U.S., as well as more than 75% in Canada, Japan and the United Kingdom. In China, where our stores are company-operated, 98% are open but operating under modified schedules and enhanced safety-related protocols, including limited cafe seating. We expect China's sales to substantially recover with comparable store sales roughly flat to prior year levels at the end of fiscal year 2020. Currently, approximately 50% of our global licensed store portfolio is also closed, with higher levels of closure in Europe, the Middle East and Africa, and lower levels of closure in Asia Pacific.

While this disruption to Starbucks business is expected to be temporary, given the dynamic nature of the COVID-19 outbreak and how it is affecting our business globally, including our largest market, the U.S., we are currently unable to estimate full company financial impacts with reasonable accuracy. Additionally, given the late-quarter onset of COVID-19 impacts in the U.S.—as well as a materially higher flow-through rate on lost sales in the U.S.—we expect the negative financial impacts of COVID-19 to be significantly greater in Q3 FY20 compared to Q2 FY20, and to extend into Q4 FY20 but at a more moderate level. Therefore, until we have greater visibility into the impact, in the U.S. in particular, and except for the selected metrics noted below, total company guidance for fiscal 2020 will remain suspended as communicated in our April 8 letter to Starbucks stakeholders.

All guidance for the metrics noted below is for fiscal year 2020 and growth metrics are relative to fiscal year 2019. Please note, the guidance provided below is dependent on our current expectations which may be impacted by prevailing, external conditions and local safety guidelines.

China comparable store sales growth:

• Q3 FY20: -25% to -35%
• Q4 FY20: -10% to flat
• Full year FY20: -15% to -25%
• At least 500 net new stores in China
• Channel Development GAAP revenue decline of 6% to 8% with modest operating margin improvement
• Capital expenditures of approximately $1.5 billion

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