And then the rest of it was delivery. Our Growth at Scale agenda provides the focus and discipline for us to successfully navigate this challenge. And then can you also give us an update on any initiatives you have on communicating safety protocol as you start to reopen more of the in-room dining? Starbucks Reports Q2 Fiscal 2020 Results Q2 Consolidated Net Revenues of $6.0 Billion, Down 5% from Prior Year Due to Adverse Impact of COVID-19 Q2 … You guys are somewhat insulated from protein challenges and shortages that are starting to surface. Normalizing for the 330 basis point impact of the transition activities I just mentioned, Channel Development's operating margin expanded 30 basis points in Q2. Please proceed with your question. It was very helpful for us. I'll start off by saying that given the scale of our company, combined with the strength of our balance sheet, we are confident that we will be able to maintain appropriate liquidity as we manage through the current crisis. But having this convenient ability, and those three attributes, safe, familiar and convenient, that is something that works around the world following these periods where people have been sheltering at home. The second thing is the in-store experience. And Yum China this afternoon said the same quarter, their comps are down roughly 10% thus far. So as Kevin mentioned in -- when we started off the call, we saw, as we were entering the quarter and actually exiting last year, our rewards members, which are highly routinized customers have really grown with us. And fourth, by honoring our upcoming quarterly dividend declaration, we are supporting our shareholders with a predictable return of capital in an uncertain investment environment. Ms. Doraisamy, you may now begin your conference. Certainly. Are they purchasing different? Yeah. And that is consistent around the world. We estimate International's Q2 revenue decline attributable to COVID-19 to be approximately $465 million. So when we open starting next week, we're going to open with modifications. In all cases, we have estimated these impacts by comparing Q2 actual reported results to our internal forecasts, specific to each operating segment and market. There's same frequency loss across all dayparts. GAAP results in fiscal 2020 include several items related to strategic actions, including restructuring and impairment charges, transaction and integration costs, and other items. We expect to provide our next update in June after we've evaluated the performance of stores we opened in the US and better understand the possible duration of temporary closures in Japan. Today, almost 100% of our stores in China are open, many with limited seating, reduced hours and other safety protocols in place. Starbucks is resilient. Thanks, David. International's Q2 non-GAAP operating margin was 3.9%, down from 19.3% in the prior year. Good afternoon, my name is Hector, and I will be your conference operator today. This was followed by a precipitous YOY earnings drop of 48.0% in Q2 FY 2020 ending in March, when the pandemic began to affect Starbucks. Andrew, a couple of things on our roasting capacity. Moving on to International. GAAP Earnings Per Share of $0.28, down 47% from the prior year primarily due to unfavorable impacts related to the COVID-19 outbreak . Sharon Zackfia -- William Blair -- Analyst. And we do have a marketing plan schedule as we reopen next week. Get this delivered to your inbox, and more info about our products and services. Pat, why don't you take the numbers on the comp, and then we'll hand off to Roz to talk about sort of the trends that she's watching in terms of customer behavior? So what we're doing, David, is managing what we're learning and then opening the stores accordingly and applying our partners and our labor against these new entryway models and also to amplify drive-through. Sign up for free newsletters and get more CNBC delivered to your inbox. Our China business is on the path to recovery. Okay. We are also sharing our store safety protocols with our licensees across the US who continue to responsibly operate their stores, particularly in grocery locations across the country. Starbucks posted a 51% dip in earnings for the second quarter of 2020 as the adverse impact of COVID-19 hurt the top-line by 5%. When normalizing for the 5% favorable impact of Global Coffee Alliance transition-related items, Channel Development's revenue grew 11% in Q2 over the prior year. And if we do that, I think we emerge from this strengthening the brand and strengthening the connection that we have with our customers. We decided when we went into the shelter-at-home to only open drive-throughs, and we did that for partner safety. Creating the best moments with our customers was really a real key change for us. Operator? Finally, at the consolidated level, non-GAAP operating margin of 9.2% in Q2 contracted 660 basis points year-over-year. And so our customers are used to us introducing spring beverage in addition to speaking to them on a one-to-one basis through our digital relationships. We've got to do the right things for our partners and our customers. But also is there some leverage you have potentially with renegotiating rents or leases on some of these stores that if the new normal looks a little bit as far as the recovery period where they might be permanently hamstrung, is there some level of renegotiating or leases where since you've closed these 50%, that's given you a little bit of an entrance into that with the landlords? While current margin performance is obviously highly distorted by large levels of store closures and interim store partner pay practices, so talking about the value of incremental comp growth or incremental margin improvement is somewhat irrelevant, I would say, at this juncture. But I think as Roz highlighted that in the drive-through, just the number of drive-throughs we've had open without even the cafe open, we were delivering -- roughly 75% of prior-year revenue in those individual stores. Yeah. We estimate that the COVID-19 impact to Americas non-GAAP operating income was approximately $420 million in Q2, consisting of flow-through on lost sales as well as incremental investments, notably catastrophe wages as well as enhanced pay and benefits programs in support of our retail store partners, inventory write-offs and store safety supplies. Starbucks’ shares fell by more than 2% in after-hours trading and have fallen 18% in 2020 as of Wednesday’s close. Our top priority and our near-term goal is to return to cash positive store operations and to improve from there toward full recovery, and we will do that by reopening large numbers of stores and improving their profitability, including normalizing store partner pay practices starting in May. Shares of the company fell less than 1% in extended trading. And relatedly, how much do you think social distancing in these walk-in stores will limit your capacity when they do reopen? Your next question comes from the line of David Tarantino with R.W. So there is some deferral of capital associated with that, and we've taken the opportunity to trim some of our other capital spending programs, including store refurbishments. Starbucks (SBUX) Q2 2020 earnings: Same-store sales fall 10% April 29, 2020 admin Earnings 0 Starbucks on Tuesday said that its fiscal second-quarter global same-store sales fell 10% as the coronavirus hit sales in its two largest markets, the United States and China. And then in terms of delivery, we've been able to accelerate in delivery. With Starbucks in 82 markets, we are committed to supporting our license partners around the world as they too navigate this challenge. Starbucks (SBUX) Q2 2020 earnings: Same-store sales fall 10% April 28, 2020 Sam khawaja 0 Comments Starbucks on Tuesday said that its fiscal second-quarter global same-store sales fell 10% as the coronavirus hit sales in its two largest markets, the United States and China. Starbucks Corp (SBUX) Q2 2020 Earnings Conference Call AlphaStreet. And those stores right now are in some of our highest volume channels, those being the international travel hubs and the airports, the tourist areas as tourism has subsided in China and then obviously some of the entertainment areas in the downtown urban areas and in the neighborhood. Second, by extending more flexible development and financial terms in Q3, we are investing in our international licensees who are our partners in driving long-term growth. We now have it down in Shenzhen as well as in Beijing. John Culver -- Group President, International, Channel Development and Global Coffee & Tea. So we've got a pretty strong reopening plan that kicks off early next week. Now moving on to our outlook for fiscal 2020. We'll also be helping our customers use the app and make sure that they order ahead and pick up in store, either through drive-through or those other channels that I described. And we're on a path where we are going to hit the 500 stores by the end of this year, and we are going to continue to accelerate. And so customers come back to our stores. Please proceed with your question. Q2 is shaping up to be an exceptional quarter for Starbucks driven by strong performance in the US and Channel Development, even while we were simultaneously navigating the impact of COVID-19 in China. We created a decision modeling tool that helped us look at the customer frequency that we saw in those drive-through stores as well as looking at sources from local government guidance, the infection curves by county, customer sentiment and partner sentiment. And so we had done a significant amount of work to actually relieve the partner of a lot of their tactics they were doing in the stores, and they were engaging with our customers in some of the most meaningful ways. Pat? I want to thank you for joining us today, and I hope you and your families are all safe and healthy. Pre-COVID, we had built a tremendous momentum in the business by focusing on three things, the customer experience, beverage innovation and digital customer relationships. SEATTLE – Starbucks Corporation (NASDAQ: SBUX) today reported financial results for its 13-week fiscal second quarter ended March 29, 2020. The response from customers has been great. A Division of NBCUniversal. Or do you need to see these new initiatives like curbside or store reopenings before comps can reaccelerate? We saw a lot of that. I think the big difference for us has been our ability to leverage the relationships that we've been able to build with the government officials, both in the central government, the provincial government and then into the cities, and really taking those relationships and being able to understand how they're thinking about the reopening and working closely with them on staging our reopening based on what their plans were. Any such statements should be considered in conjunction with cautionary statements in our earnings release and risk factor discussions in our filings with the SEC, including our last annual report on Form 10-K and quarterly report on Form 10-Q. However, near the end of the quarter, the pandemic started to materially impact our business outside of China, most significantly in the US. It really depends on those local jurisdictions and where the sheltering-in has been lifted. Prime News Now. So once we get those stores reopened, we feel that we can get back to a path where our comps will continue to accelerate beyond what we're already seeing. We are well positioned to leverage our digital assets and new operating formats like contactless pickup and curbside to expand service to customers. Our innovation in food, notably, our new breakfast wraps, have surpassed expectations to date. Kevin Johnson -- President and Chief Executive Officer. Thank you. We want to hear from you. Importantly, even though new store development activities were suspended for most of the quarter, we opened 59 net new locations in China during Q2, and another seven locations added thus far in April. China is a sit-down market and the US is a grab-and-go market. I would expect that number to be much lower than that in China, but help me clarify that. But I would say that we're optimistic that given the shape of the recovery curve going into next year, that our capital spending programs, which underpin so much of our growth, we would expect to normalize next year. But given the late quarter onset of COVID-19 impacts in the US as well as a materially higher flow-through rate on lost sales in the US, we do expect the negative financial impacts of COVID-19 to be significantly greater in Q3 compared to Q2, and to extend into Q4. We are finding new innovative ways to serve our communities, prioritizing the safety of our customers and partners with the focus on exceeding public health standards and adjusting to new customer expectations. We continue to see digital being a key element of our strategy in China, and really, the adoption of the digital transactions in our stores continues to accelerate. Non-GAAP EPS of $0.32, down 47% from the prior year. This continues to be an important element of our Growth at Scale agenda. Thanks very much for the transparency. GAAP Earnings Per Share of $0.28, down 47% from the prior year primarily due to unfavorable impacts related to the COVID-19 outbreak . The routines may look a little bit different, but they will -- people remain in a work from home position. Thank you, Jeff. © 2020 CNBC LLC. We've heard from some other concepts that higher checks are happening because there's more group ordering. The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. Pat, a question for you in terms of the outlook, at least for the second half. Since we started reopening stores in late February, we have seen meaningful improvements in China comparable store sales in commercial, residential and office locations. Our next dividend is payable on May 22 to shareholders of record on May 8. We also were very well connected into the local health officials as well. And so we're optimistic that the shift will continue to occur. Yeah. Patrick Grismer -- Executive Vice President and Chief Financial Officer. In our update to stakeholders on April 8, we shared that the positive business momentum that drove one of the strongest holiday seasons in the history of our company continued well into our second quarter in the United States. I would like to welcome everyone to Starbucks Coffee Company's Second Quarter of Fiscal Year 2020 Conference Call. Let me provide several examples of how we are thinking about this. So more and more people continue to adopt the digital app and interact with us digitally. The segment's non-GAAP operating margin was 37.8%, an improvement of 360 basis points over the prior year. What do you think is driving the lag in your recovery versus a peer like this just based on your knowledge of the market? Thanks. If it's office, stores near office parks where office workers are not going back to work yet, they'll be a little slower. And really, you're seeing a good split between Mobile Order & Pay making up about 16% of that 29% and delivery making up about 13%. We saw partners just volunteering to come work at stores, very energetic. GAAP results in fiscal 2020 and fiscal 2019 include items which are excluded from non-GAAP results. And that remains the powerful combination for us to continue to engage and drive frequency of customer visits. Non-GAAP EPS of $0.32, down 47% from the prior year. And also to think about what that looks like over a daytime, really, we've not seen much change there. Finally, for your calendar planning purposes, please note that our third quarter fiscal year 2020 earnings conference call has been tentatively scheduled for Tuesday, July 28, 2020. So why don't you go ahead first, Roz? With this program, Starbucks in China introduced Oatly, a plant-based milk alternative. We believe the focused actions we are taking to deliver a contactless customer experience, coupled with continued beverage innovation and expanded digital capabilities, will help to restore the upward momentum in our US business that we were experiencing prior to the onset of COVID-19. We've seen that in China. My question is on how you think about the pace of the US recovery, in addition, obviously, to the pandemic, or in a recession. If we look at the comp numbers in the US business that you've discussed in March and then your guidance for April, overall, it might suggest that there hasn't really been a big sequential or week-on-week improvement in the business. ... which accounted for approximately 65 percent of total consolidated revenues in the first quarter of fiscal 2020… It is clear that our channel strategy is working extremely well. Areas that will be slower, similar in China. We feel confident that we've got the inventory there, and have been in close contact with all of our suppliers in that area. We anticipate the 80% of where we were pre-COVID will come back. Sara, when I think about the trend in both ticket and traffic, I think about the exit of fourth quarter into first quarter, where we were seeing great pickup in terms of our beverage innovation, most predominantly in Nitro Cold Brew and all cold coffee selling extremely well. Starbucks (SBUX) delivered earnings and revenue surprises of 3.23% and 4.52%, respectively, for the quarter ended March 2020. But I think there'll be a little bit of a difference in terms of -- in the US deciding -- we'll open them faster, but we'll decide geography by geography what's the appropriate format. And just in general, do you expect a similar lag in your recovery in the US? Yes. Q1 2020 Earnings Conference Call. So we're encouraged by that. In fact, you were very specific on the China path. And I think that's a fair assumption. Our channels business has demonstrated resilience through all of this. So really making sure that we created a safe environment and that we continue to build on the trust that our brand has with our customers and obviously with our partners. I know you gave the update on rewards for the second quarter. We've increased to over 19 million of those customers in the US, up 15% a year ago. And then as we get it here to the states, having the transportation set up to do so. So you'll see those reignited with a lot more energy than in past. Since the crisis started, we have seen an average ticket growth increase throughout the quarter, a result of group ordering as customers through this pandemic are making Starbucks runs for their homes, local essential businesses and for front-line response teams. Just what that might mean for customer demand, for your traffic trends and also site selection and longer-term unit development potentially? Hi, thank you. But given the amount of coffee that is imported, and Latin America is a little bit earlier stages with COVID-19 relative to the US. So we feel good about the green coffee. As you can imagine, in Amsterdam and different areas, we shut down for a period of time. Thanks. Thanks, Roz. Just trying to figure out as you open stores what the sort of systemwide sales will look like? I would like to welcome everyone to Starbucks Coffee Company's Second Quarter of Fiscal Year 2020 Conference Call. Your first question comes from the line of David Palmer with Evercore ISI. Thank you very much. To date, in April, comparable sales growth for US company-operated stores that are open is averaging approximately minus 25% or indexing at 75% of prior-year levels. Could you talk about how your digital trends have kind of ramped as you've gone through April? Got a confidential news tip? Selling Starbucks products through multiple channels amplifies the brand and extends our ability to meet customers where they are, even when they are unable to visit our retail stores. Contents: Prepared Remarks; Questions and Answers; Call Participants; Prepared Remarks: Operator. And as Pat mentioned, we had comparable sales growth in those US company-operated stores averaging down by about 25% or indexing right at about 75% of prior levels. Our monitoring capability provides the input necessary for decisions that enable us to turn the dial up or down depending on the situation in a specific community or a specific store. April 28, 2020. Should we just think about doubling the number of stores that are open and doubling the sales volume? And when you've had to be sheltering in place for several weeks, just to get out for a nice uplifting experience at Starbucks, it's familiar and it's rewarding. And based on our current store reopening plans, we expect that our cash needs are going to peak this quarter. And then I think we anticipate that the mall stores will also be slower and that mall stores are less than -- fewer than 8%, I think, of the total store fleet in the US. I … Are they more price-sensitive in China? And it's surprising to us in some areas, people are not aware if we're open or not, and we've actually had different hours in different regions. Your next question comes from John Ivankoe with JP Morgan. China has demonstrated a clear path to recovery. Sure. We all understand the power of the Starbucks brand is strong. And as you reopen stores in the US, do you have any sense of how much of those volumes in the stores that remained open might have represented sales transfer from closed stores? By early June, Starbucks expects to have 90% of company-operated U.S. locations reopened, with modified operations and hours. You'd suggested that 50% of the stores that we closed were hampered for some reason. Thank you. In China, you're expecting same-store sales down 25% to 35% in your third quarter. Please proceed with your question. But the real credit goes to Starbucks partners. Q2 2020 Starbucks Corp Earnings Call 04/28/2020 05:00 PM (EDT) SBUX. Through the first 10 weeks of the quarter, the US delivered 8% comparable store sales growth, building on strong momentum from the past few quarters. Additionally, modifications to increase throughput in drive-through, delivery and MOP channels in our existing stores are already under way, along with a new Entryway Handoff solution, which incorporates best-in-class safety protocols. And our focus on the customer experience, beverage innovation and digital differentiate Starbucks and will enable us to regain the momentum we had prior to COVID-19. But you have given us some April color. In any event, based on our substantial experience in China today, we continue to believe that these impacts are temporary, that our brand is resilient and that our business will fully recover over time. The good news is that we continue to see transactions gain momentum in the market, number one. Our performance was interrupted mid-March when a national emergency was declared to mitigate COVID-19. Thank you. And we decided to close over 50% of our company-operated stores and limit service to drive-through and delivery for those that remained open. The state of the art Coffee Innovation Park, that we will be opening outside Shanghai in 2022, will serve as a key component of Starbucks worldwide coffee roasting network for customers in China, and is a testament to the growth opportunity we see for specialty coffee in the market. This will position us well to continue to capture the growth opportunity we see in China in fiscal '21 and beyond. But one of the things we're doing, and it's primary to us, is partner safety. Starbucks had $2.57 billion in cash and cash equivalents on hand as of March 29. Great. These items are excluded from our non-GAAP results. For the quarter, International's revenue declined by $395 million or 26% versus the prior year to $1.1 billion primarily driven by a 31% decrease in comparable store sales, partially offset by 11% net new store growth over the past 12 months. I'll also mention, too, we have extensive work going on with our delivery partner. We continue to play the long game in China as we invest in our future. Earnings per share: 32 cents, adjusted; Revenue: $6 billion The coffee chain reported fiscal second-quarter net income of $328.4 million, or 28 cents per share, down from $663.2 million, or 53 cents per share, a year earlier. And I do think it is fair to believe that occupancy -- lease rates are going to go down post-COVID just given the situation. The company estimates that it lost $915 million in sales during the quarter due to store closures, reduced operating hours and lower customer traffic resulting from the pandemic. First, through salary and wage continuation and through premium pay for those working on the front lines of our business, both as communicated through the end of May, we are investing in our partners who are critical to the Starbucks Experience and instrumental to our long-term success. Is it about coffee in general? But even as local mandates get relaxed, we feel like we can monitor and adapt accordingly. Starbucks stores that remain closed in China are primarily located in cinemas and enclosed entertainment venues, along with the international travel hubs and certain tourist zones where restrictions are still in effect. We'll have TV. However, due to the rapid sales decline and significant investments in response to the COVID-19 outbreak that started to materialize in the US in mid-March, Americas Q2 non-GAAP operating margin landed at 14.4%, down from 20.3% in the prior year. These impacts first started in China in late January and materialized in other markets later in the quarter. And so I think our competitive position is very strong. For the second quarter, Starbucks produced consolidated revenue of $6 billion, down 5% from the prior year. To summarize, the financial impacts of COVID-19 are very material and will weigh on our Q3 performance in particular. And so you'll see some marketing in the delivery space as well. We just decided rather than have any location that has a cafe opened during the period where the nation was sheltering at home and social distancing, we thought that was the safest way for us to ensure both our partners' safety as well as out of our customers. And that's, again, largely due to an extended duration of impact in the third quarter. And so local municipalities can make a decision on openings and closings, and shelter-ins and not, and the mobility of the customer. Thank you. Before I hand over to Pat to walk you through the details of the quarter and balance-of-year perspective, I want to reinforce one key point. Hi, good afternoon. We've been able to keep our roasting facilities open and running. So right now, we feel pretty good about our position. Through the month of February, Americas non-GAAP operating margin improved meaningfully versus the prior year, reflecting strong sales leverage and continued supply chain efficiencies. Now coming out of the gate, we're doing a lot of new things with marketing. Thanks very much. Your next question comes from the line of Brian Bittner with Oppenheimer. We estimate the COVID-19 impact to non-GAAP operating income to be approximately $700 million, inclusive of the amounts I cited for the Americas and International. We actually saw that partner engagement carry over to when we began to slow down stores due to COVID. I'd say both in the US and China, we're in the strongest competitive position that we've been in, in the history of the company. But this was more than offset by a sharp decline in the final three weeks of the quarter due to the COVID-19 impact that I mentioned earlier, ultimately resulting in a 3% decline for the quarter. Earlier this month, the company withdrew its fiscal 2020 forecast, citing the "dynamic nature" of the coronavirus crisis. In essence, we are investing in relationships with key constituents, not only to preserve those relationships but to strengthen them for the future. And then, Roz, why don't you take rest of the supply chain, the roasting network as well as the food sourcing? 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