Starbucks' quarterly sales decline in China was four times worse than the coffee chain expected and it has no 'line of sight' into when business there will fully recover, the company said on Tuesday, driving shares down 2.2% in extended trading.
Global brands with significant exposure to China are under the microscope as investors worry about the lingering financial impact of the pandemic there.
Seattle, Washington-based Starbucks does not have "clear line of sight into the timing of recovery" and believes negative sales will continue through this quarter, Chief Financial Officer Rachel Ruggeri said during the call. The chain still plans for 9,000 total outlets there by the end of 2025, executives said. Ruggeri reiterated the company's overall guidance for global comparable sales growth of 7% to 9% for its fiscal 2023.Losses in China were offset by North American sales, which jumped 10% as a younger and wealthier coffee-loving crowd shrugged off inflationary pressures and continued to buy customized cold drinks and snacks.
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