Starbucks Corp.’s quarterly sales fell short of analysts’ estimates, a sign that momentum may be slowing for the coffee giant amid higher prices and tighter pocketbooks. The shares fell in late trading.

The chain’s comparable sales, a key gauge of how existing stores are performing, rose 10% in three months through July 2 from the prior year, trailing the average estimate of analysts polled by Bloomberg. Sales by that metric rose 7% in North America as transactions advanced 1%, marking slower traffic growth than last quarter.

The results contrast with those of McDonald’s Corp., which topped estimates despite warnings of slowing growth. Starbucks’ earnings show that US consumers may be starting to cut back on discretionary services such as dining out.

International same-store sales grew 24% in the quarter, in line with estimates, powered by higher traffic. That included higher-than-anticipated growth in China, which is still recovering after extended Covid-19 restrictions.

Total revenue in the company’s fiscal third quarter was a record $9.2 billion, Starbucks said, but that still fell just short of the $9.3 billion analysts expected. Meanwhile, adjusted earnings per share of $1 beat the 95-cent average analyst estimate — a sign that higher prices are bolstering the company’s profitability.

Starbucks stock fell 2.6% at 4:06 p.m. in late trading after the release of results. The shares have risen 2.1% in 2023 through Tuesday’s market close in New York, trailing the S&P 500 Index’s 19% advance.

Author: Daniela Sirtori-Cortina