Starbucks Corp SBUX-Q beat Wall Street estimates on Tuesday for quarterly profits and comparable sales, powered by a sharp recovery in business in China and steady demand for its coffees and cold drinks in North America.
With most of China’s COVID-19 curbs now scrapped, consumer mobility and spending in the region bounced back sharply in March.
Even so, some analysts expected China sales to remain in the red after tumbling 29% the previous quarter.
Instead, the world’s largest coffeehouse chain posted a 3% rise in China comparable sales in its second quarter ended April 2, boosting the company’s international sales 7%, more than double the 2.94% increase of the average analyst’s estimate, according to Refinitiv data.
Globally, the Seattle-based chain’s comparable sales climbed 11%, trouncing analysts’ expectation of a 7.36% rise.
Customers visited more often and spent more per trip, according to the earnings release. Excluding one-time items, Starbucks earned 74 cents per share, beating estimates of 65 cents.
Shares bounced around in after-hours trading and were last down 1%.
Starbucks, whose customers are typically younger, wealthier and relatively unfazed by inflation, has doubled down on its cold and customizable beverages, boosting traffic in the U.S. and driving a 12% jump in comparable store sales in its North American market.
The chain also keeps adding customers to its rewards program, which now has 30.8 million active members in the United States, up 15% over this time last year, according to its earnings release.