(Reuters) – Starbucks Corp missed market estimates for quarterly same-store sales on Tuesday as rising COVID-19 infections during December and fresh curbs hampered a recovery in its fast-growing China market.
The fast-spreading Omicron variant has delayed office reopenings and worsened a labor crunch, hurting the U.S.-based chain which relies heavily on consumers picking up their coffees en route to work.
Several Chinese cities have closed seating areas and restricted movement to curb COVID-19 ahead of the Winter Olympics, knocking the coffee chain’s revenue. The brand also came under fire in the country after a report said two of its stores used expired ingredients.
Global comparable sales rose 13% in the first quarter ended Jan. 2, Starbucks said, while analysts polled by Refinitiv IBES had expected growth of 13.2%.
Comparable sales in the United States jumped 18%, but the international division declined 3%, reflecting a 14% drop in China.
Higher-than-expected inflation, staffing costs and COVID-related pay also hurt Starbucks, particularly in December.
Total net revenue rose 19% to $8.1 billion, while analysts had expected $7.95 billion. On an adjusted basis, it earned 72 cents per share.
(Reporting by Praveen Paramasivam in Bengaluru and Hilary Russ in New York; Editing by Devika Syamnath)
