Starbucks profits dip on continued drag from Covid-19

[NEW YORK] Starbucks reported a drop in quarterly profits Tuesday as it staged a partial recovery from the most severe stretch of Covid-19 restrictions.

The coffee giant continued a gradual recovery from an unprofitable quarter in the middle of 2020, as it returned to comparable sales growth in China and suffered a smaller decline in the United States compared with the year-ago period, but revenues nonetheless lagged analyst estimates.

"Our results demonstrate the continued strength and relevance of our brand," said chief executive Kevin Johnson.

"We remain optimistic about our robust operating outlook for fiscal 2021 as well as our ability to unlock the full potential of Starbucks to create value for our stakeholders."

The company reported fiscal first-quarter profits of US$622.2 million for the quarter ending Dec 27, down 29.8 per cent from the year-ago period on a 4.9 per cent drop in revenues to US$6.7 billion.

US comparable sales fell five per cent, better than the nine per cent slide in the prior quarter. China comparable sales rose five per cent, up from a three per cent decline in the prior quarter.

Starbucks lifted its full-year profit forecast, but projected second-quarter profits below Wall Street analyst expectations, placing more of the expected improvement for later in the year.

Shares fell 1.2 percent to US$103.42 in after-hours trading.

AFP