Starbucks misses comparable sales estimates on China COVID curbs
2022.05.03 23:40
FILE PHOTO: The Starbucks logo is seen outside the new Starbucks cafe in Warsaw March 6, 2011. REUTERS/Kacper Pempel
(Reuters) -Starbucks Corp reported quarterly comparable sales below Wall Street expectations on Tuesday, as tough COVID-19 curbs in China dented sales in the country and muddied its strong showing in the U.S. market.
Comparable sales in China, where it has been rapidly expanding in recent years to tap rising coffee consumption, declined 23%, overshadowing a 12% growth in North America.
The country’s strict lockdown measures to meet its zero-COVID policy have upended operations of most global companies that have a significant presence in the Chinese market, including Apple (NASDAQ:AAPL), Gucci-parent Kering (EPA:PRTP) and Taco Bell-owner Yum China.
Global comparable sales at Starbucks (NASDAQ:SBUX), which recently brought back former Chief Executive Officer Howard Schultz to lead the company at a time when workers at many coffee houses are unionizing, rose 7% in the second quarter, while analysts polled by Refinitiv had expected 7.1% growth.
Total net revenue rose to $7.64 billion from $6.67 billion a year earlier, as the company opened 313 net new stores during the quarter. Analysts had expected $7.6 billion in quarterly revenue.
Net earnings attributable to Starbucks rose to $674.5 million, or 58 cents per share, in the latest quarter from $659.4 million, or 56 cents per share, a year earlier.
Shares of the company rose 1.7% in extended trading.
