Starbucks managed to increase revenue and profit in its second quarter, although the company continued to deal with the impact of coronavirus lockdowns in China and inflation.
Revenue at the coffee chain operator rose 15 per cent to $7.64bn in the three months ended April 3, which it said was a record for the second quarter, and more than $400mn ahead of Wall Street estimates. Net income edged 2.3 per cent higher from a year ago to $675mn, or 58 cents a share, roughly in line with analysts’ expectations.
Global comparable sales rose 7 per cent. That was helped by an increase in transactions and a higher average spend per ticket, but the overall figure fell short of market forecasts. Its North America and US market had a robust performance, but international sales growth declined, propelled by a 23 per cent drop in comparable store sales in China.
Renewed mobility restrictions and lockdowns in China to combat the country’s latest wave of coronavirus weighed on Starbucks’ first-quarter results, as had inflationary pressure. The company acknowledged on Tuesday those challenges continued in its second quarter.
Howard Schultz, the coffee chain’s founder who has returned as interim chief executive, said the company was “single-mindedly focused on enhancing our core US business.”
He said that because of “record demand” and changes in customer behaviour, Starbucks was accelerating its store growth plans, including adding drive-throughs and speeding up renovation programmes.
“The investments we are making in our people and the company will add the capacity we need in our US stores today and position us ahead of the coming growth curve ahead,” he said in a statement on Tuesday.