Why Starbucks Investors Shouldn't Worry About Coronavirus

Starbucks (NASDAQ: SBUX) nailed its first-quarter earnings report Tuesday. But in spite of strong results across the board, investors were spooked by the outbreak of coronavirus in China. Shares were trading down 2.7% in afternoon trading Wednesday as a result.

Starbucks said that currently more than half of its stores in China were closed as it responded to the outbreak. The java giant also said it would have raised its full-year guidance in operating margin and earnings per share, but it was exercising caution, as it said the impact from the store closures would be material to its second-quarter and full-year results.

Though that news is clearly a setback for the coffee chain, investors seemed to be overreacting to it. We'll discuss why, but first let's review a few key facts about the coronavirus.

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Source Fool.com