Starbucks Corp. on Tuesday reported fiscal first-quarter profit and sales that missed Wall Street’s expectations, amid what management referred to as “headwinds” during the period, but shares rose after hours.
The coffee chain reported as analysts point to concerns about a U.S. consumer still grappling with higher prices for basics when compared to pre-pandemic levels, and worries over fractures in Starbucks’ stores in China.
But Stephens analyst Joshua Long said investors may have found other things to like.
“That said, after-market strength is likely attributed to 1) positive traffic domestically, 2) international (possibly) better than feared, and the shares’ recent pullback,” he said in a brief note published after the results.
Within the U.S. and North America, comparable customer transactions — one gauge of how often consumers are stopping in to buy coffee or food — rose 1% during Starbucks’ fiscal first quarter. International same-store sales rose 7%, helped by a jump in China, whose economy could find itself in deeper trouble following the collapse of property giant Evergrande.
Shares of Starbucks
SBUX,
have fallen 13.7% over the past 12 months. After hours on Tuesday, they were up 3.2%.
Overall during Starbucks’ first quarter, revenue rose 8% to $9.4 billion, below FactSet estimates for $9.6 billion. Its adjusted earnings per share were 90 cents, below FactSet forecasts for 93 cents. Same-store sales rose 5%, compared with FactSet estimates for a 7.1% gain.
Operating margins expanded to 15.8%, helped by “in-store operational efficiencies,” but partially offset by efforts to pay staff more and give them better benefits, and higher costs related to a turnaround plan. Starbucks in November unveiled plans to save $3 billion in three years.
This story originally appeared on Marketwatch
