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Starbucks Is Back in Business in China

By Demitri Kalogeropoulos – Feb 27, 2020 at 12:15PM

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Management is encouraged by a recent slowdown in the spread of coronavirus.

Starbucks (SBUX 3.38%) is resuming its business in China. The coffee giant said on Thursday that it has reopened nearly all of its stores in the country after shuttering them temporarily in response to the coronavirus outbreak and the subsequent drop in customer traffic.

A woman holding a coffee cup.

Image source: Getty Images.

What happened?

CEO Kevin Johnson told investors that Starbucks has reopened 85% of its Chinese locations as the health and economic conditions have improved. "With the number of new cases in China slowing, we are seeing the early signs of a recovery in the region," he said in a press release.

The country is a major source of sales and growth for Starbucks, with over 4,000 locations in operation as of the end of its most recent fiscal year.

What's next?

It's still too early to assess the full impact of the store closures on Starbucks' operating trends, and the situation remains fluid. While new cases have slowed in parts of China, for example, they have spiked in other countries where the company has a major presence. That means investors can expect to hear additional updates as management gets more clarity over the next few weeks.

Demitrios Kalogeropoulos owns shares of Starbucks. The Motley Fool owns shares of and recommends Starbucks. The Motley Fool has a disclosure policy.

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