Starbucks’ recovery, solid in China, still slow in U.S.

Starbucks’ recovery slowed at the end of last year as U.S. coronavirus cases mounted, but the coffee titan says it’s confident its U.S. business will fully recover by March.

The Seattle-based company said Tuesday that its global sales at stores opened at least a year fell 5% in the October-December period. That was an improvement from the prior quarter, but it was still a bigger decline than the 4% drop Wall Street was expecting, according to analysts polled by FactSet.

Starbucks also fell short of revenue forecasts. The company reported sales of $6.75 billion in its fiscal first quarter, below the $6.9 billion than analysts forecast.

Without one-time items, Starbucks said it earned 61 cents per share in the October-December period. That was ahead of Wall Street’s forecast of 55 cents.

Starbucks shares slipped about 1% in after-hours trading.

Starbucks said its business in China, its second-largest market after the U.S., has fully recovered, with same-store sales up 5% in the first quarter. Starbucks said it’s seeing fewer customers in China, but they’re spending more when they visit.

But in the U.S., same-store sales were down 5% for the quarter despite the holiday drinks that usually draw customers. Store closures and reduced store hours hurt traffic, as did a surge in coronavirus cases.

Still, Starbucks said it’s confident U.S. same-store sales will rise between 5% and 10% in its fiscal second quarter as the pandemic’s impact continues to fade.