Starbucks Corp. posted sales that beat estimates as transactions in the US and China increased. But that wasn’t enough to satisfy investors following a 15% increase in the stock price this year.
Shares fell further after Chief Executive Officer Lakshman Narasimhan, who took over from longtime leader Howard Schultz on March 20, said the coffee chain was reaffirming its guidance for the full year. Wall Street was expecting gains amid a strong quarterly performance.
Comparable sales rose 11% in the quarter ended April 2, according to data compiled by Bloomberg, while analysts had forecast a 7.3% gain. By that measure sales exceeded estimates in both the US and China, key growth markets.
The results underscore consumers’ resilience as they continue to pay higher menu prices for discretionary items like the Oatmilk Latte. They further reinforce that eating out is back: Last week, Chipotle Mexican Grill Inc. and McDonald’s Corp. also posted sales that topped Wall Street’s expectations.
Starbucks said transactions grew 6% in the US and grew in China as well. Traffic in US, company-operated stores also surpassed pre-pandemic levels in the quarter, executives said.
Shares were down 5.2% during late trading in New York at 5:45 p.m. ET. Their year-to-date gains are more than double that of the S&P 500 Index.
Operating margin was 14.3%, beating analysts’ average estimates. In North America, profitability was helped by higher prices and a reduction in pandemic-related wages from a year earlier, among other factors.
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