(Reuters) - Starbucks Corp (O:SBUX) on Wednesday forecast a 47% drop in second-quarter earnings, scrapped its full-year forecast and warned that the financial hit from the coronavirus pandemic would extend into the final quarter of 2020.
The company also said it would temporarily suspend its share buyback program and take steps to cut costs, but would maintain its quarterly dividend.
Starbucks said it now expects to report second-quarter earnings of about 28 cents per share, reflecting the impact of lost sales for the period as well as higher costs. It had reported 53 cents per share in the year-earlier period.
The world's largest coffee chain said same store sales in the United States began to decline on March 12 and have steadily worsened.
The company also said revenue in China faced a shortfall of about $400 million compared with its expectations, with a 50% decline in comparable store sales for the second quarter ended March.
Like most other restaurants, Starbucks had to close its cafe areas and move operations to drive-thru, carry out and delivery only in response to customer concerns and government mandates to help stop the spread of the deadly virus by limiting social contact.
The company expects to report its second-quarter earnings on April 28.