But the company appears optimistic about the future, raising the outlook for its adjusted earnings for the fiscal fourth quarter.
Executives said that they expect same-store sales to recover more substantially in China and the U.S. by the end of its fiscal first and second quarters, about a year after the crisis began, assuming there are no new sustained waves of infections or major economic disruptions. Margins are expected to follow in the next two quarters.
"We still have a long ways to go to get back to full recovery, but we're optimistic based on the strength of our brand and the strategy and initiatives that we have to drive sales and improve margins," CFO Pat Grismer said.
Shares of the company rose more than 6% in extended trading.
Here's what the company reported for the quarter ended June 28 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
The global coffee chain reported fiscal third-quarter net loss of $678.4 million, or 58 cents per share, down from net income of $1.37 billion, or $1.12 per share, a year earlier. Costs related to the pandemic, like paid leave for baristas and added safety measures, weighed on its profits.
Excluding items, Starbucks lost 46 cents per share, narrower than the loss of 59 cents per share expected by analysts surveyed by Refinitiv.
Net sales dropped 38% to $4.22 billion, topping expectations of $4.07 billion. The company estimates that the pandemic resulted in $3.1 billion in lost revenue.
Global same-store sales plummeted 40% during the quarter. Transactions at locations open at least 13 months plunged 51%, but consumers spent more their orders, sending average check up by 23%.
U.S. same-store sales fell 40% in the quarter. The company temporarily shuttered most of its U.S. cafes between mid-March to mid-April, transitioning to drive-thru and delivery only. Reopened locations often had reduced hours and limited operations.
Its number of active rewards members fell 5% from the year-ago period as fewer loyal customers ordered coffee. The chain recently unveiled new ways for members to pay for their food and beverages, which should encourage enthusiastric coffee drinkers to join the program.
CEO Kevin Johnson said that the chain saw fewer consumers buying drinks on their way to work and school. But some customers just moved their daily coffee run to later in the morning or early afternoon, leading the company to reallocate its baristas' hours.
"All of this indicates that customers are adapting their routines," he said.
In China, Starbucks' second-largest market, same-store declines were less steep, falling only 19%. About 12% of orders were for delivery.
Despite the pandemic, Starbucks opened 130 net new cafes worldwide during the quarter. The company previously announced that it would close up to 400 locations through 2021 and put more emphasis on cafes built for mobile pick-up, drive-thru orders and curbside pick-up.
As the crisis continues to make it challenging for companies to predict future results, Starbucks revised its fourth-quarter forecast. It now expects to earn between 6 cents to 21 cents, down from its prior forecast, released in June, of 11 cents to 36 cents. But its adjusted earnings during that period are now estimated to be in a range of 18 cents to 33 cents, up from 15 cents to 40 cents.
Starbucks also narrowed its outlook for U.S. same-store sales for the remainder of the fiscal year. Its home market's same-store sales are expected to shrink by 12% to 17%. The company previously forecast declines of 10% to 20%.
In China, same-store sales are expected to be roughly flat to down 5% during the fiscal fourth quarter. It previously estimated roughly flat same-store sales.