Starbucks reaffirms commitment to China amidst virus fears

Starbucks has finished Q1 strong in China despite indicating that the coronavirus would impact its business throughout the rest of 2020. 

The coffee chain has temporarily closed more than half of its stores in China due to the outbreak of the coronavirus which has sparked fears of a pandemic on a potentially global scale. 

"As we begin our fiscal second quarter, I want to acknowledge the dynamic situation our partners in China are navigating as health officials respond to the coronavirus," said Kevin Johnson, president and CEO. 

The company’s Q1 results read: "The duration of business disruption, reduced customer traffic and related financial impact cannot be reasonably estimated at this time but are expected to materially affect our International segment and consolidated results for the second quarter and full year of fiscal 2020." 

Seeing as China and the U.S. are the company’s biggest growth markets, Johnson reaffirmed Starbuck’s intentions in the region.

"We remain optimistic and committed to the long-term opportunity in China, building on our brand heritage and 20-year legacy of profitable growth," he said. 

Overall net revenue for the quarter totaled $7.1 billion, growth of 7 percent over the prior year. 

Revenues for the company’s Chinese stores totalled $745 million for the quarter ended December 2019, compared with $657.7 million for the same period in 2018.

Total store count in the region was also up to 4,292 from 3,685 during the same period.