American coffee house chain Starbucks is set to make a long-term investment in China, which is its fastest-growing market outside the United States, after the Seattle-based company posted quarterly profit that just matched analysts' estimates on Friday.
The company also announced that would close all 379 of its Teavana stores, which it acquired in 2012, according to a report in Reuters.
The report about Starbucks’ financial health is the first under new chief executive officer Kevin Johnson, who took over the role from co-founder Howard Schultz in April.
Sales in its US cafes that open at least more than year, rose five percent in the latest quarter and reversed three consecutive quarters of declines that the company attributed in part to changing its loyalty program to focus on dollars spent.
In contrast, sales 2,800 from stores in 130 cities in China were up a high seven percent in the latest quarter.
The 16,302 cafes in Starbucks' US-dominated Americas region contributed $974.8 million in operating income in the quarter, while the 7,183 cafes from the China/Asia Pacific region posted $223.8 million.
The deal in China will give Starbucks ownership of about 1,300 stores in Shanghai, Jiangsu and Zhejiang.