Starbucks Corp (SBUX.O) missed quarterly sales estimates on Tuesday, sending shares down 2%, even though the coffee chain raised its annual forecast for revenue and profit on the expectation that more customers will return as they get vaccinated.
Global comparable sales were hurt by weakness at its international business, where the COVID-19 pandemic has forced governments to restrict travel and shut cafes.
Still, the company raised its 2021 revenue forecast to between $28.5 billion and $29.3 billion. It expects adjusted earnings per share between $2.90 and $3.
Analysts have forecast revenue of $28.61 billion and earnings of $2.85 per share.
U.S. sales returned to pre-pandemic levels, Chief Executive Officer Kevin Johnson said during a call with analysts.
“When you look at the progress we’re making on vaccinations, certainly in the U.S., that’s a proxy for what’s going to happen around the world,” he said.
Starbucks, like other restaurant chains, has struggled for over a year as consumers worked from home and made their coffee and breakfast themselves. Recent lockdowns in parts of Asia and Europe have slowed the recovery.
The Seattle-based company said sales in its biggest growth market, China, nearly doubled from the same period a year ago when its stores in the country remained shut due to the health crisis.
The surge, however, was not enough for its markets abroad to beat Wall Street expectations. They rose 35% in the company’s international markets, but missed expectation of 48.25% growth, according to IBES data from Refinitiv.
In the Americas, comparable sales rose 9%, powered by a recovery in the United States, thanks to vaccinated consumers returning to stores or ordering their daily cup of coffee online.
The company grew its active Rewards loyalty program members to 22.9 million, an 18% increase year over year.
“I believe we have an opportunity to double that number,” Johnson said. “I’m not going to give a time frame, it might take a couple of years.”
Revenue rose 11% to $6.67 billion for the second quarter ended March 28, falling short of the estimate of $6.82 billion.
Most analysts believe Starbucks will benefit from reopening as people crave social interactions at cafes and other gathering spots.
“It is still going to be a while before people are both able to and comfortable with doing this again,” said Euromonitor International consultant Matthew Barry.