(Reuters) -Starbucks Corp missed Wall Street estimates for quarterly comparable sales on Tuesday, as business in China took a hit due to renewed lockdowns, taking the shine off strong demand for its coffees in the United States.
A fresh round of lockdowns in Shanghai and a resurgence of COVID-19 in Beijing and other Chinese cities have forced Starbucks stores to shut seating areas in the quarter, allowing the company to offer only deliveries or mobile orders.
At the stores that remained open in China, recovery of traffic was choppy due to stringent safety protocols established by authorities, while new COVID-19 flare-ups in July added to concerns around recovery in the country – Starbucks’ fastest-growing market.
Starbucks said comparable sales in China slumped 44% in the third quarter, bruising its international business and offsetting 9% growth in U.S. same-store sales.
Global comparable sales at the Seattle-based chain rose 3% in the fiscal third quarter ended July 3, compared to analysts’ average estimate for a 3.76% rise, according to Refinitiv IBES.
Total net revenue, however, rose to $8.15 billion from $7.50 billion a year earlier, edging past analysts’ average estimate of $8.11 billion.
Shares in the company rose 1% in extended trading.
Net earnings attributable to Starbucks fell to $912.9 million, or 79 cents per share, from $1.15 billion, or 97 cents per share, a year earlier.
(Reporting by Deborah Sophia in Bengaluru and Hilary Russ in New York; Editing by Maju Samuel)
