Starbucks reported better-than-expected quarterly earnings and revenue on Tuesday, despite the impact of the lockdown in China on its bottom line.
Here’s what the company reported for the quarter ended July 3, compared to what Wall Street expected based on a Refinitiv poll of analysts:
- Earnings per share: 84 cents adjusted vs. 75 cents expected.
- Revenue: $8.15 billion vs. $8.12 billion expected
The coffee giant reported Starbucks’ fiscal third-quarter net income of $912.9 million, or 79 cents per share, up from $1.15 billion, or 97 cents per share, a year earlier.
net sales rose 9% to $8.15 billion. The coffee giant reported a 3% increase in global same-store sales, helped by strong performance in the US.
In the domestic Starbucks market, same-store sales increased by 9%, driven primarily by an increase in the average number of orders. Traffic also increased by 1%, a rarity in the restaurant industry as other chains see low-income consumers visiting less often.
Outside the US, same-store sales fell 18% due to falling demand in China. The country, which is Starbucks’ second largest market, spent two-thirds of the quarter under lockdown to contain the spread of Covid. As a result, sales in Chinese stores fell by 44%. The company is still facing occasional short-term closures in China.
Last quarter, Starbucks changed its forecast for fiscal 2022, citing the uncertainty caused by the Covid outbreaks in China. The company did not release a new guidance this quarter.
During the quarter, Starbucks opened 318 new locations worldwide, bringing the total number of locations to 34,948.