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April 8, 2020, 6:37 p.m. EDT

Starbucks says earnings cut roughly in half due to coronavirus effects

Starbucks Corp. (NAS:SBUX) said Wednesday that fiscal second-quarter earnings will be chopped roughly in half from a year ago due to the spread of COVID-19 in China and then the U.S. Starbucks revealed that it expects adjusted earnings of 28 cents to 32 cents a share for the second quarter, which would be down from 60 cents a share in the second quarter of 2019. "These estimates reflect the impact of lost sales for the period as well as incremental expenses for partner wages and benefits, store operations and other activities related to the COVID-19 outbreak," the company disclosed. "This includes inventory write-offs, honoring supplier obligations, store safety-related items, asset impairments and preliminary estimates of certain government stimulus program benefits." Analysts on average expect earnings of 39 cents a share, down from 66 cents a share at the end of 2019, according to FactSet. The company also rescinded its annual guidance. Starbucks shares fell 1% in after-hours trading immediately following the release of the information. Starbucks expects to report second-quarter earnings in full on April 28.

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