Starbucks is even taking a hit in the US from Israel's war in Gaza, its CEO says

• Starbucks said its sales in the Middle East took a hit after Israel's invasion of Gaza.
• And events in the region have also impacted US sales, CEO Laxman Narasimhan said.

Starbucks took a sales hit last quarter in the Middle East after Israel's invasion of Gaza, its CEO said. But the fallout from the conflict isn't just confined to that region — it's also weighed on its home market, he said.

"Events in the Middle East also had an impact in the US," CEO Laxman Narasimhan said during an earnings call late Tuesday. Starbucks' "occasional US customers, who tend to visit in the afternoon, came in less frequently."

Starbucks' first-quarter earnings missed analysts' estimates on Tuesday, and it cut its full-year sales growth forecast to a range between 7% and 10%, down from 10% to 12%.

The coffee retailer is one of many brands based in the US and Europe that some consumers abroad have boycotted since the start of the conflict in Gaza last October. Consumers in some markets, such as Malaysia, were staying away from Domino's pizza due to its American origins, an Australia-based franchisee said last week.

The drop-off in sales to some US customers was driven by "misperceptions about our position," Narasimhan said. The company has previously pushed back against "misrepresentation" of its position on Israel's invasion of Gaza. The CEO has pointed to social media posts and some vandalism at its stores. For instance, at one location in Texas, someone spray-painted "Boycott Starbucks" on an outside wall.

The coffee chain saw "a significant impact on traffic and sales" in the Middle East, the CEO also said on the call. "We are working with our licensees during this time to ensure the safety and well-being of our partners and our customers." Starbucks did not disclose sales figures for the Middle East, and a company spokesperson declined to comment beyond Starbucks' earnings release and call.

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