Starbucks warned of uncertainty around its outlook for China over the next six months, sending shares lower in after-hours trading as chief executive Laxman Narasimhan presented the coffee chain’s results for the first time since taking over from Howard Schultz.

Average weekly sales in China, Starbucks’ largest market after the US, had started to moderate after a “faster than expected recovery” during the first three months of 2023, the company said on Tuesday. Although the chain reaffirmed its overall outlook for the year, the uncertainties around the Chinese economy’s post-pandemic path could result in uneven earnings growth in the months ahead.

That unnerved investors and sent shares 5.5 per cent lower in after-hours trading on Tuesday following the earnings call. If the move holds into Wednesday’s session, it would put the company’s shares on course for one of their biggest daily drops of the past two years.