Starbucks reported quarterly profits that topped expectations, but the company's outlook failed to impress investors.
Shares fell about 6% in extended trading after the company did not lift its 2023 guidance.
Business in China rebounded with spending increasing as most of the country's COVID-19 curbs have been scrapped.
The world's largest coffeehouse chain posted a 3% rise in China comparable sales.
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That helped add to a 7% increase in international sales, more than double the 2.94% increase of the average analyst's estimate, according to Refinitiv data.
While the China recovery was better than the company expected, growth in average weekly sales there will be at a more moderate pace in the second half, Chief Financial Officer Rachel Ruggeri said during an earnings call.
On a global basis, Starbucks' comparable sales climbed 11%, trouncing analysts' expectation of a 7.36% rise.
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Excluding one-time items, Starbucks earned 74 cents per share, beating estimates of 65 cents.
The North American market saw a 12% jump in comparable store sales.
Tuesday’s earnings report was the first presided over by CEO Laxman Narasimhan.
He reaffirmed the company’s guidance for its fiscal year, but said the business environment remains challenging.
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The chain has added customers to its rewards program, which now has 30.8 million active members in the United States, up 15% over this time last year, according to its earnings release.
They are also building more cafes, adding 100 net new stores in North America and more than 360 internationally.
Reuters contributed to this report.
