Starbucks profits up despite China hit due to Covid-19
Oct 29, 2021 - 10:57 AM
NEW YORK — Starbucks reported a jump in quarterly earnings Thursday following higher sales in the United States and some overseas markets, but China sales were hit by the latest Covid-19 wave.
“It’s just the variability of dealing with the pandemic when things like the Delta variant come up,” Chief Executive Kevin Johnson told analysts, adding that customers “do return” reliably once conditions improve.
The coffee giant reported profits of $1.8 billion in its fiscal fourth quarter, up more than four times from the year-ago level.
Revenues rose 31 percent to $8.1 billion.
But the company’s operations in China took a hit during the quarter ending October 3 as Starbucks there faced local restrictions on movement and required health protocols due to Covid-19.
“I’m confident it is short-term and we’re going to recover,” Starbucks China Chief Executive Leo Tsoi said on the conference call.
Executives defended an announcement Wednesday to boost wages in the United States, the latest announcement by a large company in response to a tight labor market.
US hourly employees will average close to $17 per our following the increases in summer 2022. All employees will earn at least $15 an hour by that time, the company said.
Shares fell 3.7 percent to $109.00 in after-hours trading.