By Nivedita Balu and Hilary Russ

(Reuters) – Starbucks Corp on Tuesday reported a larger-than-expected fall in quarterly sales as the renewed surge in coronavirus cases in the United States kept customers at home.

The world’s largest coffee chain’s global same-store sales fell 5% in its first quarter, which ended Dec. 27, more than analysts’ estimates of a 3.4% decline, according to Refinitiv IBES data.

Shares fell slightly in extended trading.

The second wave of COVID-19 infections and accompanying restrictions dented traffic at the coffee chain’s stores, hampering its efforts to boost demand through product launches and new drive-thrus.

Comparable sales declined 6% for the Americas region, compared with a 5.2% fall expected by analysts.

But in China, Starbucks’ biggest growth market, comparable sales rose 5% as the company benefited from the popularity of its rewards program and the return of pre-coronavirus consumer habits.

Customers also spent more money per order, helping to offset fewer transactions.

Starbucks also said Chief Operating Officer Roz Brewer would be leaving the company next month to take a chief executive officer role at another company.

Walgreens Boots Alliance Inc later announced that Brewer would take the helm at the company effective March 15.

For the second quarter, Starbucks said it expects U.S. comparable sales to rise between 5% and 10%, while in China they were forecast to grow nearly two-fold a year after the pandemic hit the region.

The company did not change its guidance of an expected rebound overall this year, with global comparable sales expected to rise 18% to 23% in 2021.

Net revenue fell 5% to $6.7 billion, missing expectations of $6.93 billion.

The Seattle-based company has been closing some stores, adding drive-thrus to others, remaking some with smaller cafes and building a few with no seating at all as it focuses on expanding to-go options.

Overall, the company opened 278 net new stores in the quarter, for 4% year over year growth. It now has 32,938 stores around the world, 51% of which are company-operated.

Starbucks also saw coffee lovers return to its Rewards loyalty program, with its count of 90-day active U.S. members increase 15% year over year to 21.8 million.

(Reporting by Nivedita Balu in Bengaluru; Additional reporting by Hilary Russ in New York and Rama Venkat in Bengaluru; Editing by Aditya Soni and Aurora Ellis)

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