Starbucks Quarterly Sales comparable sales below forecasts on Tuesday. China strengthened as North America and other nations slowed. The world’s largest cafe chain launched fresh beverages and cuisine to encourage younger, wealthier U.S. customers to spend more. North American sales rose 1% in the third quarter, down from 6% in the second.
Starbucks’ third-quarter China sales rose 46%. In a call, the company assured investors of a steady return. M Science’s director of product intelligence, Sante Faustini III, said, “I think China is what’s keeping the stock up here.”
Starbucks‘ shares fell after the market closed despite beating Wall Street’s quarterly earnings projections and raising its full-year outlook. M Science’s Faustini III called North America’s 7% comparable sales increase “light,” but he emphasized China’s rapid development. Starbucks expected its regular weekly sales in China to climb in the low to mid-single digits in the current quarter, resulting in comparable sales growth.
China is its largest non-US market. It has 31.4 million reward users and a record 20 million customer loyalty members. BofA Global Research reports that Chinese rail ridership rose 128% in the quarter and returned to pre-pandemic levels. Starbucks and train sales patterns often match.
The company now predicts 16% to 17% annual profit growth, up from 15% to 20%.It forecasts full-year comparable sales growth of 7% to 9%, higher than the 8.7% expected by 14 Wall Street Refinitiv analysts.
Starbucks executives warned investors that at-home coffee would remain to pressure sales in the fourth quarter and that price rises would eventually slow down.
Starbucks’ worldwide comparable sales climbed 10%, according to Refinitiv IBES, instead of 11.8% as projected. Foreign same-store sales rose 24% instead of 25.7%. Due to lower material costs and higher pay and bonuses, the company’s adjusted operating income rose from 16.9% to 17.4% in the quarter ending July 2.
Starbucks earned $1 per share, above the average analyst’s estimate of 95 cents.