Starbucks Corp (NASDAQ:SBUX) shares tumbled almost 9% after the global coffee chain reaffirmed its full-year guidance despite outperforming expectations on both profit and revenue in the most recent quarter.
For the second quarter of fiscal 2023, ended April 2, 2023, the company posted adjusted earnings per share of $0.74 on revenue of $8.7 billion, above Wall Street’s forecast of EPS of $0.64 on revenue of $8.39 billion.
However, the coffee giant said that it expects its global comparable sales to reach the high end of its existing 7% to 9% target for fiscal 2023, which the market took as a signal of uncertainty.
Also sending the stock lower was management's commentary around the company's performance in China, where same-store comparable sales increased by 3% in 2Q compared to a 23% plunge in the year-ago quarter, as pandemic-related restrictions were eased during the period.
Starbucks CFO Rachel Ruggeri said during an earnings call on Tuesday evening that the company had already begun to see its growth in China moderate, with growth in weekly sales in the second half of the fiscal year expected to be at a more moderate pace than the latest quarter.
"When we take all of that into account when we look at our guidance for the full year, we believe reaffirming our guidance allows us to continue to convey the momentum, but also for the confidence we have while still navigating a rather uncertain environment globally,” Ruggeri said, as reported by Reuters.
Starbucks shares slipped 8.8% to US$104.42 late morning on Wednesday.
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