Starbucks earnings miss as higher costs weigh on profits, coffee chain cuts earnings outlook

Earnings

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The Starbucks logo is displayed on a cup at a Starbucks store on October 29, 2021 in Marin City, California.
Justin Sullivan | Getty Images

Starbucks on Tuesday reported quarterly earnings that missed analysts’ expectations as higher costs weighed on its profits.

Here’s what the company reported for the quarter ended Jan. 2 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: 72 cents adjusted vs. 80 cents expected
  • Revenue: $8.05 billion vs. $7.95 billion expected

The coffee giant reported fiscal first-quarter net income of $815.9 million, or 69 cents per share, up from $622.2 million, or 53 cents per share, a year earlier.

Excluding items, Starbucks earned 72 cents per share, falling short of the 80 cents per share expected by analysts surveyed by Refinitiv. The company cited higher-than-expected costs throughout its supply chain and more employees using sick leave.

Net sales rose 19% to $8.05 billion, topping expectations of $7.95 billion. Its global same-store sales climbed 13% in the quarter.

Despite staffing issues, the company reported U.S. same-store sales growth of 18% from a year earlier and 12% on a two-year basis. 

The holiday season typically brings consumers back to its cafes for gift cards. During the quarter, shoppers spent more than $3 billion adding or reloading money to gift cards.

Outside the U.S., Starbucks saw weaker demand for its coffee. In China, its second-largest market, same-store sales shrank by 14% in the quarter. The country reimposed travel restrictions on some cities as it faced another wave of Covid cases. 

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