The virus will likely affect Starbucks’ financial performance in the first quarter.
China is Starbucks’ second largest market outside of the US with almost 4,300 locations. As the coronavirus death toll rises and the virus spreads, global car and tech companies have been pulling their foreign workers out of the country and extending their Lunar New Year closures. Now, there are over 213 confirmed deaths and at least 9,000 confirmed cases of the novel coronavirus in China as of Friday afternoon, Beijing time.
Starbucks reported to the Wall Street Journal that it had planned to increase its profit forecasts for 2020 due to better-than expected first quarter performance. The company went on to explain that the virus has affected their projections and they’ve decided against raising their forecasts. China accounts for 10% of Starbucks’ global revenue, and these closures will certainly affect their revenues significantly. Starbucks’ suppliers have also been slowed down as supply chains are bogged down due to closures and other preventative measures.
Among the other measures global companies have taken, hundreds of foreign workers have been evacuated from Wuhan, ground zero for the new virus. Companies in China have advised workers to stay home to try to slow the virus’s spread.