Starbucks shares lag because sales in China were slow in last quarter
reported strong fourth quarter earnings as consumer demand and spending continues to rise, but sales in China have been weak due to Covid-19.
The findings are the latest example of how the pandemic continues to affect global businesses such as
(ticker: SBUX). Outbreaks of the Covid-19 virus over the summer triggered lockdowns in China, leading to a slowdown in consumer spending.
The company’s stock (ticker: SBUX) fell 2.8% to $ 110 in after-hours trading.
The company reported adjusted earnings of $ 1 per share, while the consensus expectation among analysts tracked by FactSet was 99 cents. Revenue was $ 8.15 billion, below the consensus estimate of $ 8.21 billion.
Same-store sales increased 22% from the same period last year and 11% from pre-pandemic levels. But same-store sales in China’s key market fell 7% in the quarter compared to the period last year.
Net income totaled $ 1.76 billion, or $ 1.49 per share, from $ 392.6 million, or 33 cents per share, a year earlier.
Starbucks has updated its store footprint, closing some cafes and opening new ones designed for mobile and takeout orders. It added 538 net locations worldwide during the quarter.
The company said Wednesday that it plans to raise wages for all U.S. personnel to at least $ 15 an hour, from $ 12 by the summer of 2022. Competition for workers is soaring.
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