Starbucks profits increase despite a decline in China

Yesterday, Starbucks announced greater quarterly profitability, driven by strong North American growth that more than made up for China's ongoing downturn as a result of Covid-19 restrictions.

The huge coffee chain's results were a study in contrast between its two key areas, with comparable sales in North America increasing by 10% and those in China declining by 29%.

Starbucks profits increase despite a decline in China

The outcomes in the US showed a boost from "strategic" pricing increases that helped lessen the effects of rising wages and employee benefits spending.

In face of "difficult global consumer and inflationary situations, a soft quarter for retail overall, and the unprecedented, Covid-related headwinds which unfolded in China in Q1," acting CEO Howard Schultz characterized the performance as strong.

Overall, profits increased 4.8% from the same period last year to US$855.2 million (RM3.64 billion) during the first quarter of the current fiscal year that ended January 1. 8.2% more was made, bringing in $8.7 billion in US dollars.

Earnings per share of 75 cents, somewhat below analyst expectations, were generated by the profits.

In after-hours trade, shares decreased 2.4% to US$106.57.

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