NEW YORK (AFP) – Starbucks reported higher quarterly profits on Thursday, fuelled by solid North American growth that compensated for continued weakness in China due to COVID-19 restrictions.
The big coffee chain’s results were a study in contrast between its two main markets, with North American comparable sales jumping 10 per cent and China comparable sales slumping 29 per cent.
The results in the United States (US) reflected a lift from “strategic” price increases that helped offset the impact of increased spending on wages and employee benefits.
Acting Chief Executive Howard Schultz described the results as strong in light of “challenging global consumer and inflationary environments, a soft quarter for retail overall and the unprecedented, COVID-related headwinds that unfolded in China in the first quarter.”
Overall, profits rose 4.8 per cent from the year-ago period to USD855.2 million in the fiscal first quarter ending January 1. Revenues increased 8.2 per cent to USD8.7 billion. The profits translated into earnings per share of 75 cents, a bit below analyst estimates.
Shares fell 2.4 per cent to USD106.57 in after-hours trading.