Brewing up some good news after the entire restaurant industry took a drubbing from COVID-19, Starbucks (SBUX -0.62%) published an open letter to its partners today describing its recovery following the possible recent decline in the pandemic's severity. The company made the letter public by filing it as an 8-K Current Report with the SEC.
The letter compares the current coronavirus outbreak to previous crises and the extraordinary responses they prompted. It cites the start of the Transcontinental Railway during the American Civil War, and notes how, during the Cold War, "President John F. Kennedy united the country around a quest to the Moon." Starbucks attempts to strike an upbeat note throughout, in addition to providing some more concrete data.
The company says its reopening in China is well under way, with comparable store sales climbing to 80% of last year's level. Turning to the U.S., Starbucks states that in just the past week, it has registered comps reaching 60% to 65% of 2019's sales. The company hopes comps will rise even more as customers respond to today's rollout of its summer menu. It adds, "we began reopening a large number of stores in the U.S. in the second week of May and we are tracking slightly above our forecasted recovery curve."
Starbucks' second-quarter 2020 earnings report, issued yesterday, showed how seriously COVID-19 affected its operation. Comps dropped by 3% in the U.S., 31% internationally, and 50% in China. Consolidated net revenue dropped 5% year over year. The company has also requested a full 12 months of reduced rent from its landlords. Nevertheless, it managed to open a net 255 stores worldwide during the past quarter.