Starbucks Corp. shares rose in late trading as a strong US performance and higher prices helped to offset lower traffic and sluggishness in China, where COVID-19 measures have sharply suppressed demand. 

The results reinforce the message found in recent reports from McDonald’s Corp. and Chipotle Mexican Grill Inc.: Americans are still opening up their wallets to eat out -- even if inflation is starting to erode purchasing power.

Sales of US$8.15 billion came in slightly above expectations in the fiscal third quarter ended July 3, Starbucks said Tuesday in a statement. The average ticket -- or cost per order -- rose 6 per cent, but comparable transactions fell 3 per cent. This shows that higher prices are making up for a lower volume of sales.

The results “demonstrate the early progress we have made in just four short months,” founder and interim Chief Executive Officer Howard Schultz said. Since taking over in April, Schultz has moved to shake up management, halt share buybacks and blunt a growing union drive in the US.

China, which is a key market for Starbucks along with the US, remains a source of uncertainty amid on-and-off pandemic rules that have restricted mobility in major cities. Comparable sales in the country fell 44 per cent during the quarter, while analysts estimated a 39 per cent drop. The chain recently began reopening dining rooms across Shanghai.

“It was definitely a mixed report,” said Bloomberg Intelligence analyst Michael Halen. “Good news here in the US, and bad news overseas.”

Starbucks said its financial guidance remains suspended “for the balance of this fiscal year” amid unpredictability in China’s pandemic restrictions. 

Inflation also remains a concern. Operating margin in the quarter was 15.9 per cent in the quarter, above analysts’ projection but still a 400 basis-point decline from a year earlier. The company said the drop was due to inflation, higher wages for workers and anti-COVID measures in China. 

Higher prices in North America and sales in Europe helped to offset the pressure. While overall transactions fell in the quarter, they rose 1 per cent in North America. 

“It was nice that they didn’t see any loss of transactions in the US with price being up,” Halen said. 

The company has seen a recent reduction in worker turnover, a spokesperson said. In April, Schultz told employees that 80 per cent of baristas had been with the company less than a year, a figure he called “shocking.” The company is trying to convince its workers that they will be better off if they don’t unionize.

The shares rose 1.4 per cent at 5:12 p.m. in late trading in New York. The stock has dropped 28 per cent so far this year through Tuesday’s close -- double the decline of the S&P 500 Index over the same period.