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Fresh lockdowns to curb the spread of the Delta variant in Starbucks (NASDAQ:SBUX)’ largest growth market of China have also hit businesses of several other restaurant chain operators, including Yum China Holdings (NYSE:YUMC) Inc. The coffee chain posted a 7% decline in China comparable sales in the fourth quarter, missing its forecast of roughly flat growth and offsetting a 22% jump in the United States.
But analysts say the pressure in China should be temporary as restrictions ease and Seattle-based Starbucks opens more stores in the world’s second-largest economy to boost growth.
Global comparable sales rose 17% in the quarter ended Oct. 3, compared with analysts’ average estimate of 18.5% growth, according to Refinitiv IBES data.
Revenue came in at $8.15 billion to miss Wall Street expectations of $8.21 billion. Starbucks earned $1 per share, compared with 51 cents a year earlier.
The company said on Wednesday it would give pay raises to workers in the United States with at least two years of employment and offer $200 referral bonuses, as it grapples with a labor crunch in the country.
The worker shortage has weighed on earnings of major U.S. restaurant chains such as Burger King-parent Restaurant Brands International (NYSE:QSR) Inc and Domino’s Pizza (NYSE:DPZ) Inc.
