Starbucks (SBUX) reported mixed results for its fiscal third quarter. Earnings of $1.00 per share topped analyst estimates of $0.95, but revenue of $9.17 billion fell short of the estimates of $9.28 billion. Same-store sales growth of 10% also missed estimates of 11.1%. Sales in China, however, were better than expected. Yahoo Finance Live breaks down the results.

Video Transcript

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- Well, Starbucks just out with its quarterly results. Earnings coming in at $1 a share, beating the Street's estimates of $0.95 revenue. Missing the Street's expectations at $9.17 billion. The estimate was for $9.28 billion.

Same store sales also falling short, rising 10% versus the expectation of 11.1%. For the-- for the US, comp sales rising 7% against the US 7.7% estimate.

Akiko, one bright point here in this earnings results is really what we're seeing in terms of China. We know China was a focus in this result here.

China Comp store sales coming in, increasing 48%-- or 46%, excuse me, on a year over year basis, beating the Street's expectations of 41.8%. So a bit of a recovery playing out in China, but not enough to offset some of the weakness that we're seeing elsewhere with the stock off just about 1%.

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AKIKO FUJITA: Well, in China, you could argue, when you look at the stock moves, sort of investors looking at that growth in China. Yes, that's really good news. But at the end of the day, the broader trend is slowing growth for Starbucks.

When you think about where this company has been, they have really benefited in a big way in the return to office. With those ticket prices going up, they've been able to push those prices higher as well, looking at record sales in the quarter.

But broadly speaking, that is starting to slow down. And I think you see that reflected in the stock as well. You talk about same store sales being a miss.

North America same store sales also a miss, coming in at 7% growth as opposed to roughly 8%, a little more than 8%, that was expected.

The other thing that kind of stood out to me, just looking very quickly at the report that came out here, operating margin of 21.7% contracting from the prior year. Company saying specifically that was driven by previously committed investments in labor.

And that labor story, to me, I continue to watch with Starbucks, it's going to be interesting to hear what kind of commentary we hear from them.

It's not just about the Union moves that we have seen. But also, just about the broader labor market. Starbucks, really, always a pretty good indicator about where those labor costs are. So that'll be interesting to hear what they have to say on the earnings call.