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Starbucks shares fell 3% in the after-hours session after the company lowered its sales growth forecast for China, its second-largest market outside the U.S.
The Seattle-based coffee giant said its revenue soared 78% to $7.5 billion in the April-June period, an all-time high, as the impact of the coronavirus pandemic receded and customers flocked to its stores.
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The results beat Wall Street’s forecast of $7.3 billion, according to analysts polled by FactSet.
Starbucks said its global same-store sales – or sales at locations open at least a year – jumped 73% from the same period last year.
The pandemic hit Starbucks hardest in the April-June period last year, when many stores were closed and same-store sales tumbled 40%.
Same-store sales jumped 83% in the U.S. in the fiscal third quarter.
Sales of higher-priced drinks – like cold brews and alternative milk beverages helped sales, as did higher demand for food items.
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The concern in the report came in results in China, where same-store sales increased at a lower-than-expected pace of 19%. Starbucks also lowered its full-year sales forecast for China, saying it now expects growth of 18% to 20%, down from 27% to 32%.
The company said travel restrictions have had an impact.
Starbucks CEO Kevin Johnson forcefully defended the company's performance, saying Starbucks will continue to see robust growth in China as it opens new stores. The company plans to open 600 stores in China in its 2021 fiscal year.
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"There should be no misunderstanding of how big and robust our business in China is and will be," he said.
Starbucks reported net income of $1.15 billion for its fiscal third quarter. Adjusted for one-time items, the company earned a record $1.01 per share. That was well ahead of analysts’ forecast of 78 cents.
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The company said it now expects global same-store sales growth of 20% to 21%, up from a range of 18% to 23%. It also expects adjusted earnings of $3.20 to $3.25 per share, up from $2.90 to $3.00.
The Associated Press contributed to this report.
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