An employee hands a bag to a customer at a Starbucks coffee shop in Hercules, California, on Thursday, July 28, 2022.
David Paul Morris | Bloomberg | beautiful pictures
Starbucks Tuesday reported better-than-expected quarterly earnings and revenue, although the shutdowns in China are hurting its performance.
Shares of the company rose more than 1% in extended trading.
Here’s what the company reported for the July 3 quarter versus what Wall Street expected, based on a survey of analysts by Refinitiv:
- Earnings per share: adjusted 84 cents vs 75 cents expected
- Revenue: $8.15 billion vs. $8.11 billion expected
The coffee giant reported fiscal third-quarter net income belonging to Starbucks of $912.9 million, or 79 cents per share, down from $1.15 billion, or 97 cents per share, a year before. The company said inflation and higher wages for bartenders affected its profit margins this quarter.
Sales network increased 9% to 8.15 billion USD. The company reported global same-store sales growth of 3%, driven by strong US business.
In Starbucks’ home market, same-store sales increased 9%, largely due to higher average total orders. Traffic also increased 1%, even as some chains said lower-income consumers visited less often.
Outside of the US, sales at similar stores fell 18% due to a sharp drop in demand in China. The country, which is Starbucks’ second-largest market, spent two-thirds of the quarter trying to limit the spread of Covid. As a result, sales at similar Chinese stores fell 44%. The company is still having to close periodically in the short term in China.
Last quarter, Starbucks withdrew its outlook for fiscal 2022, citing uncertainty due to the Covid outbreak in China. The company did not issue a new forecast for the quarter.
Starbucks opened 318 new locations worldwide during the quarter, bringing its global total to 34,948.
Read the full earnings report here.
Correction: An earlier version of this story was misleading Refinitiv estimates Starbucks’ quarterly revenue.
