Starbucks Cuts Earnings Outlook For 2022, Following Airport Cafe Closures

Starbucks Cuts Earnings Outlook For 2022, Following Airport Cafe Closures

Starbucks Cuts Earnings Outlook For 2022, Following Airport Cafe Closures
Starbucks Cuts Earnings Outlook For 2022, Following Airport Cafe Closures
Retail Bum

Retail Bum

Retail Bum

Retail Bum

Share
Reduced foot traffic to office buildings and international travel are impacting Starbucks’ same-store sales in China, the company’s second-largest market outside the U.S.

“Our stores that are in airports in the international travel terminals are closed, so clearly that’s weighing on comps,” CEO Kevin Johnson said Wednesday.

“Stores that are in office districts are much slower than they used to be.”

While store locations in residential and commercial zones are continuing to see same-store sales growth, it is not enough to offset the lack of demand at other store locations. Overall, same-store sales in the country were down by 14% in Q1.

Additionally, the company continues to anticipate challenges with supply chain and inflation, prompting it to raise its prices for a third time after raising them in October and January.

The coffee giant’s net sales rose by 19% to $8.05 billion, topping analysts expectations of $7.95 billion. Meanwhile, global same-store sales climbed by 13% in Q1.

Although Starbucks has seen an increase in sales in the U.S. market, it seemingly has a longer road to recovery in China, where the Omicron surge is just starting. To make matters worse, the Chinese government is imposing strict measures to curb the spread ahead of the Winter Olympics, forcing closures when cases spike.

“There’s constant waves of store closures and constraints created by that [policy],” Johnson said.

This has led Starbucks to cut its earnings outlook for fiscal 2022. The company’s stock was down 3% following its earnings announcement.

MUST READS
British Skincare Brand ELEMIS Becomes B Certified

British Skincare Brand ELEMIS Gets B Corp. Certification

After two years of implementing changes to processes and practices and launching new initiatives across the business, skincare brand ELEMIS has obtained its B Corp certification. “If the last few years have taught us anything, it’s to be kind, not just to ourselves or to

Saks Looks To Strengthen Mens Category Both Online and In-Store

Saks Looks To Strengthen Menswear Business In-Store and Online

Luxury retailer Saks has unveiled a new men’s shopping experience on the seventh floor of its New York flagship location and has expanded its menswear assortment online. The move marks the retailer’s effort to strengthen its in-store and online menswear business following increased demand. “Our

LVMH, L’Oréal Eye Stake in Aesop

LVMH, L’Oréal Eye Stake in Aesop

LVMH, L’Oréal, and Shiseido are some of the top contenders that are vying to buy a stake in Aesop, a deal that may value the brand at $2 billion or more. The interest comes nearly three months after Brazilian cosmetics giant Natura & Co. announced plans to

No more posts to show, explore other topics: