Starbucks Corp. said the higher labor and supply costs are expected to persist for months, adding that he is promoting high-end drinks such as cold coffee and may raise prices in some areas to help to compensate.
Prospects for the Seattle-based company came as it reported quarterly sales above pre-pandemic levels. The company predicted higher profits to come, despite rising costs and some lingering seat restrictions. For its third fiscal quarter ended in June, Starbucks posted revenue of $ 7.5 billion, higher than analysts’ expectations.
Starbucks was one of the first global restaurant companies to feel the impact of Covid-19 last year, as the initial spread of the coronavirus in China forced several chains there to close. Sales resumed as the company was able to reopen the halls and encourage customers to order online. Now, Starbucks and other chains are facing supply shortages and staffing issues, driving up costs as consumers resume dining at restaurants.
Inflation and supply chain disruptions have squeezed Starbucks earnings for its final quarter, the company said, and inflation and wage increases are expected to push costs up further. This could lead Starbucks to raise menu prices in some markets, executives said. It also promotes cold drinks and bespoke drinks, which tend to be more expensive.
“We have pricing power,” Starbucks CFO Rachel Ruggeri told investors on a conference call on Tuesday.