Starbucks sales falter in China because of Covid restrictions
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In the three months ending on July 3, sales at Starbucks' Chinese locations open at least 13 months dropped 44%. Starbucks' international sales fell 18% in the quarter, dragged down by poor results in China. Discounting the sales drop there, international growth would have been up by double digits, the company said Tuesday. China's zero-Covid policy has made it difficult for individuals and companies to get back to business as usual. That's a problem for Starbucks, which counts China as one of its most important markets. Starbucks has about 5,760 Chinese locations, and points to the region as a growth opportunity for the brand. Covid-19 restrictions dragged down Starbucks' sales in China.During an earnings call in May, Starbucks' interim CEO Howard Schultz said he remained "convinced Starbucks' business in China will be eventually larger than our business in the US." He added at the time that "our aspirations around China have never been greater," but described the lockdowns as "unprecedented." Read MoreThe news follows reports that Starbucks may be rethinking its presence in another overseas market. The UK newspaper the Times said in July that Starbucks was considering whether it could or should sell its business in the United Kingdom. Starbucks said at the time that it was not engaged in a "formal sales process" and reiterated that it wanted to stay in the region.Earlier this year, Starbucks said it was leaving Russia for good due to the war in Ukraine. In the United States, where the company is battling a building unionization effort, sales have been growing. Sales at US stores open at least 13 months jumped 9% in the quarter. Despite the decline in China, investors were pleased with the company's overall results. Starbucks (SBUX) stock jumped nearly 2% after hours on Tuesday. Click Here To Get Funded!