Starbucks Corp. (SBUX) said it has regained almost two-thirds of its comparable U.S. store sales from the prior year after the coffee chain operator began reopening a large number of its country stores earlier this month.
The coffee chain said that over the past week, it recouped about 60-65% of prior year comparable U.S. store sales while reopening under modified operations and with reduced hours.
In the second week of May, Starbucks reopened over 85% of its company operated stores across the U.S., and said it expects more than 90% of its stores to be open by early June, under modified operations and hours.
“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 CEO Keith Johnson said in a letter to employees.
In China, Starbucks comparable store sales have reached about 80% of prior year levels, reflecting gradual improvements over the past several weeks, Johnson added.
“We learned in China that when we re-open stores, we begin a recovery process that starts with those safe, familiar and convenient experiences and grows from there,” said Johnson. “Our recovery progresses each week, and we know that it will take time to fully recover and post positive comparable store sales growth.”
Shares in Starbucks have been on a recovery path surging 39% in the past two months to trade around $78.49 on Thursday afternoon. However, year-to-date the stock is still down over 12%.
Commenting on the coffee chain’s business update, four-star analyst James Rutherford was hopeful of an eventual recovery, but tempered near-term expectations in light of high unemployment, new consumer habits, and a need for a vaccine. As such, Rutherfold maintained a Hold rating on the stock with a $72 price target.
Overall, the rest of the Street is cautiously optimistic on the stock. Wall Street analysts’ ratings are divided between 11 Holds and 10 Buys adding up to a Moderate Buy consensus. The $80 average price target reflects limited upside potential of 1.9% in the shares in the next 12 months. (See Starbucks stock analysis on TipRanks).