Starbucks misses quarterly sales estimates as demand wavers
A Starbucks sign is shown on one of the company's stores in Los Angeles, California, U.S. October 19, 2018. REUTERS/Mike Blake/File Photomissed market expectations for quarterly comparable sales on Tuesday, with demand for its coffees and cold drinks both in the North American and international markets showing some signs of tapering even as China sales rebounded.
While Starbucks has rushed to cash in on its younger, wealthier customer base by launching new drinks in the United States, including a Chocolate Java Mint Frappuccino and White Chocolate Macadamia Cream Cold Brew this year, its quarterly transactions climbed just 1% in North America, slowing from a 6% increase in the previous quarter.
While the 7% rise in North America comparable sales was "definitely a light number relative to expectations... people are really looking at this rebound that seeing in China... China I think is what's holding the stock up here," said Sante Faustini III, director of product intelligence at research firm M Science.
Global comparable sales at Starbucks rose 10% in the third quarter, compared with analysts' expectations for a 11.8% rise, according to Refinitiv IBES data.Still, the company expanded its operating margin to 17.4% in the quarter ended July 2, from 16.9% in the prior year, as easing costs of commodities helped offset impact from increased investment in wages and worker benefits.
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