SBUX Starbucks Corporation

By Micah Maidenberg and Heather Haddon 

Starbucks Corp. said customers in the U.S. helped to drive up sales in its latest quarter, but the company has closed more than half of its stores in China because of the coronavirus outbreak.

The coffee chain said Tuesday the closures will be temporary, but are expected to have an effect on the fiscal second-quarter and full-year financial results for its international business due to reduced customer traffic and the disruption of its operations in China.

Shares rose 0.4% in post-market trading.

Starbucks reported $7.1 billion in revenue for its fiscal first quarter, up 7% from a year earlier and in line with estimates from analysts polled by FactSet.

Comparable sales, or those from company stores open for at least 13 months and excluding currency fluctuations, rose 5% globally.

The Seattle-based company said its comparable sales increased 6% in the U.S. and in 3% in China. The domestic market gain matched the company's performance in its previous quarter, but growth in China was 2 percentage points slower than that period.

New-store construction in China fueled Starbucks's performance in its second-largest market. Growth in the company's digital loyalty program and new beverages, particularly cold ones, bolstered sales overall, Starbucks said.

Starbucks reported a quarterly profit of $885.7 million, or 74 cents a share, up from $760.6 million, or 61 cents a share, a year earlier. Its adjusted earnings of 79 cents a share was 3 cents more than analysts expected.

The company was helped in 2019 by in part by its lineup of cold beverages, including nitro-cold brewed coffee drinks.

Fast-food chains such as McDonald's Corp., however, have moved to introduce new cold coffees and step up their offerings at breakfast, an increasingly competitive part of the day.

Meanwhile in China, Starbucks faces intense competition with Luckin Coffee Inc.

Write to Micah Maidenberg at micah.maidenberg@wsj.com and Heather Haddon at heather.haddon@wsj.com

(END) Dow Jones Newswires

January 28, 2020 16:45 ET (21:45 GMT)

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