Starbucks suspends its outlook as Covid lockdowns hammer sales in China


In this article

A pedestrian carries a Starbucks branded cup in San Francisco, California, U.S., on Thursday, April 28, 2022. Starbucks Corp.
David Paul Morris | Bloomberg | Getty Images

Starbucks on Tuesday reported quarterly revenue that topped analysts’ expectations as U.S. sales growth offset sharp declines in China.

Shares rose less than 1% on the report in extended trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: 59 cents adjusted, meeting expectations
  • Revenue: $7.64 billion vs. $7.6 billion expected

The coffee giant reported fiscal second-quarter net income attributable to Starbucks of $674.5 million, or 58 cents per share, up from $659.4 million, or 56 cents per share, a year earlier.

Excluding items, Starbucks earned 59 cents per share, in line with estimates from analysts surveyed by Refinitiv.

Net sales rose 14.5% to $7.64 billion, topping expectations of $7.6 billion.Global same-store sales increased 7% in the quarter, fueled by strong growth in the United States.

U.S. same-store sales climbed 12%, as customers spent more per order and visited more often. Active membership of Starbucks’ loyalty program jumped 17% to 26.7 million customers.

Outside the U.S., it was a grim quarter for Starbucks. International same-store sales shrank 8%, dragged down by sharp declines in China, the company’s second-largest market. Chinese same-store sales sank 23% in the quarter as the country reimposed lockdowns after Covid outbreaks.

The company also said in the earnings release that it would announce investments in its employees, stores and brand and share its fiscal 2022 financial targets during the conference call with analysts. Last quarter, it said it expects GAAP earnings per share to fall by a range of 4% to 6% and adjusted earnings per share to rise by 8% to 10% during the fiscal year.

Starbucks opened 313 net new locations in the quarter.

Read the full earnings report here.

Products You May Like

Articles You May Like

Self-made millionaire Bethenny Frankel: The most successful people have an ‘unstoppable nature’ that separates them from others
Here’s where the jobs are for July 2022 — in one chart
On rare days, the market rises 5% — or even 10%, Wells Fargo finds. How to make sure you’re there for it
These 30 companies will help employees pay off their student loans
Nearly half of Singaporeans want to travel to one place – and it’s not Malaysia

Leave a Reply

Your email address will not be published.