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Why Shares of Starbucks Are Down Again Today

By John Rosevear - Mar 17, 2020 at 11:14AM

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How will its stores fare with takeout only? It's not clear yet.

What happened

Shares of coffee giant Starbucks (SBUX 3.87%) were down again on Tuesday, as investors continued to digest the company's response to the coronavirus pandemic after COVID-19 spread to the U.S. and Europe. 

As of 11:30 a.m. EDT, Starbucks stock was down about 5% from Monday's closing price. 

So what

Over the weekend, Starbucks announced that it is temporarily shifting its stores in the U.S. and Canada to a "to-go" operating model, meaning that seating in and outside of stores will be removed for the time being. 

The company will continue to serve customers that walk in, or that use drive-through lanes, but they won't be allowed to linger, it said. 

3 cold-drink cups with Starbucks logos.

Image source: Starbucks.

Retail foot traffic in the U.S. and Canada has fallen sharply since the beginning of March, as consumers heed advice to practice "social distancing" measures and avoid shopping in stores for non-essential items, in an effort to slow the spread of COVID-19. 

Now what

For investors in Starbucks -- and many other companies -- there's a lot of uncertainty right now: When will the pandemic fade, and what will the economy be like after it does?

Nobody knows, of course. But Starbucks' leadership is doing the best it can to keep some level of revenue coming in (and to keep paying its employees) while meeting its public-health obligations in the communities it serves. That's a good thing, but how much it'll matter to the bottom line remains to be seen.

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