(Bloomberg) -- Starbucks Corp.'s quarterly sales fell short of analysts' estimates as traffic growth slowed in the US. Higher prices and add-ons to beverages helped bolster profit.
The chain's comparable sales, a key gauge of how existing stores are performing, rose 10% in three months through July 2 from the prior year, trailing the average estimate of analysts polled by Bloomberg. Sales by that metric rose 7% in North America as transactions advanced 1%, slower than last quarter.
Revenue in the company's fiscal third quarter was a record $9.2 billion, Starbucks said, but that still fell just short of expectations. Meanwhile, adjusted earnings per share of $1 beat the 95-cent average analyst estimate. The company said improved productivity and higher prices helped to boost operating margin to 17.3%, above market estimates.
Starbucks on Tuesday said it expects earnings per share to expand by 16% to 17% in its fiscal 2023 year, while it had previously forecast growth on the low end of its 15% to 20% long-term goal. It maintained its outlook for revenue-growth and same-store sales.
The company said it still expects China comparable-sales growth in the low- to mid-single digits. Chief Financial Officer Rachel Ruggeri said on a call with analysts that Starbucks is “pleased with the consistency of demand” in that market, fueled by new products, more stores and other factors.
Starbucks stock slipped in late trading after the release of results. The shares have risen 2.1% in 2023 through Tuesday's market close in New York, trailing the S&P 500 Index's 19% advance.
International same-store sales grew 24% in the quarter, in line with estimates, powered by higher traffic. That included higher-than-anticipated growth in China, which is still recovering after extended Covid-19 restrictions.
(Updates shares and adds outlook, China comments)
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