Middle East economic volatility continues to impact sales
Adverse weather impacts demand in Q2 in the U.S.
Slowerthanexpected recovery persists in China
Shares fall 12 in afterhours trade

Reuters Starbucks on Tuesday cut its annual sales forecast after reporting a fall in samestore sales for the first time in nearly three years, as it struggles with weak demand for its coffees in the United States and China, its two biggest markets.

Shares of the company slumped 12 on Tuesday in extended trading as the coffee chain also missed estimates for quarterly profit and flagged a hit from geopolitical uncertainties in the Middle East.

Starbucks expects comparable sales growth both globally and in the U.S. to be in the range of a low singledigit decline to flat for the full year, down from its previous range of 4 to 6 growth.

The second quarter was challenging, CFO Rachel Ruggeri said on a postearnings call.

…Headwinds consistently persisted throughout the quarter leading us to revamp our actions and response plans to both unlock and attract demand, Ruggeri said.

Western brands such as Starbucks and McDonald39;s MCD.N are also feeling the impact of a boycott campaign in the Middle East and certain other countries over Israel39;s military offensive in the Gaza Strip.

In the U.S., Starbucks faced decelerating demand as cold weather in January and a choppy macro environment weighed on sales of its pricier beverages.

The coffee chain39;s secondquarter global…