Starbucks beats profit and sales estimates despite lockdowns in China

Starbucks reported better-than-expected quarterly results and revenue on Tuesday, despite lockdowns in China weighing on performance.

Here’s what the company reported for the quarter ended July 3 compared to what Wall Street expected, based on an analyst survey by Refinitiv:

• Earnings per share: 84 cents adjusted versus 75 cents expected
• Revenue: $8.15 Billion vs $8.12 Billion Expected

The coffee giant reported net income attributable to Starbucks for its fiscal third quarter of $912.9 million, or 79 cents per share, down from $1.15 billion, or 97 cents per share, a year earlier.

Net sales rose 9% to $8.15 billion. The coffee giant reported global same-store sales growth of 3%, driven by strong performance in the United States.

In Starbucks’ home market, same-store sales grew 9%, largely driven by higher average order totals. Traffic also increased by 1%, a rarity in the restaurant industry as other chains see lower-income consumers visit less often.

Outside the US, same-store sales fell 18%, weighed down by sharply declining demand in China. The country, which is Starbucks’ second-largest market, spent two-thirds of the quarter under restrictions to contain the spread of Covid. As a result, same-store Chinese sales fell by 44%. The company continues to see periodic short-term shutdowns in China.

Last quarter, Starbucks withdrew its fiscal 2022 outlook, citing uncertainty caused by Covid outbreaks in China. The company has not released a new forecast this quarter.

Starbucks opened 318 net new locations worldwide during the quarter, bringing the global number of restaurants to 34,948.