Starbucks Corp, an American multinational chain of coffeehouses, has posted a 7 percent decline in China comparable sales in its fourth quarter, missing market forecast of flat growth.
The company’s China sales declined over fresh lockdowns to curb the spread of the Delta variant of Covid-19.
However, the coffee chain’s sales jumped 22 percent in the United States.
The company forecast global comparable sales growth in the high single digits in its current fiscal year 2022. Its shares also fell more than 4 percent in aftermarket trading.
Starbucks CEO Kevin Johnson said that higher prices, higher wages, new unit development, automation in stores, speedier cooking equipment and other investments will help it beat rivals and push its operating margin to its ongoing target of 18 percent to 19 percent in next two years.
The company intends to open 2,000 new locations globally next year versus 1,173 in 2021, about 75 percent of them outside of the US.
The coffee chain said it will also invest in equipment – like warming ovens and cold brew systems – to speed up operations and let workers perform other tasks.
This week, Starbucks said it would increase pay for U.S. workers with at least two years of employment and offer $200 referral bonuses, as it grapples with a nationwide labor shortage.
Starbucks Chief Operating Officer John Culver said his company is also closing some locations early in order to redeploy staff to other stores.
The coffee chain also committed to $20 billion of share repurchases and dividends over the next three years.