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Starbucks Predicts a Robust Growth Rebound Over the Next Year

By Demitri Kalogeropoulos – Updated Oct 30, 2020 at 9:42AM

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Sales may increase in the U.S over the next few weeks.

Its coronavirus sales slump isn't done, but the end is in sight. Starbucks (SBUX -4.44%) issued a positive outlook on Thursday for its new fiscal year that began in late September, mainly thanks to improving trends in the U.S. market.

Sales in that division fell 9% in the fiscal fourth quarter, the company announced this week. But that result was far better than the 41% slump Starbucks endured in Q3 when pandemic closures rocked the business. The revenue decline also beat management's forecast calling for a drop of between 12% and 17%. "I am very pleased with our strong finish to fiscal 2020," CEO Kevin Johnson said in a press release.

A young woman holding a to-go coffee cup.

Image source: Getty Images.

Starbucks is calling for a big year ahead, with sales shooting higher by between 18% and 23% globally, compared with fiscal 2020's 14% decline. Profitability should return to pre-coronavirus levels, too.

These predictions assume a steady lessening of the virus' impact on areas like seating capacity and operating hours, as the company has already witnessed in several global markets. The outlook implies Starbucks could reenter positive growth territory in the U.S. fiscal first quarter, just a few months after McDonald's did.

Demitri Kalogeropoulos owns shares of McDonald's and Starbucks. The Motley Fool owns shares of and recommends Starbucks and recommends the following options: short November 2020 $85 calls on Starbucks. The Motley Fool has a disclosure policy.

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