Starbucks beats profit estimate despite getting hit by COVID-19 lockdown in China

Starbucks Corp (NASDAQ: SBUX) on Tuesday reported better-than-expected third-quarter earnings as higher prices and strong demand for its coffees in the United States helped offset the losses it incurred from China due to renewed COVID-19 lockdowns.

Despite record inflation in the US that ate into the coffee chains’ operating margin, Starbucks is “not currently seeing any measurable reduction in customer spending or any evidence of customers trading down,” interim Chief Executive Officer Howard Schultz told investors on a conference call.

The Seattle-based chain earned 84 cents per share on an adjusted basis, beating the Wall Street estimate of 75 cents.

However, global sales rose 3% in the fiscal third quarter ended July 3, compared with analysts’ estimate for a 3.76% rise.