Berjaya Food, which operates the Starbucks coffee chain in Malaysia, posted a loss in the fourth quarter as consumer sentiment on the Middle East conflict hurt sales.
The company, part of conglomerate Berjaya Corporation, reported a net loss of 38.2 million ringgit ($11.42 million) for the three months that ended in June, a reversal from a profit of 17.28 million ringgit a year ago, it said in a financial report. Sales fell by more than half.
“The significantly lower revenue and pre-tax loss incurred in the current quarter under review were mainly due to the current sentiment in relation to the conflict in the Middle East,” Berjaya Food said in the report published Tuesday.
Fast food brands from the US have been facing challenges in Asia, the Middle East and some parts of Europe amid calls to boycott the brands due to their perceived links to Israel.
McDonald’s, for instance, became a target of boycotts after photos and videos on social media showed its stores in Israel giving meals to the nation’s soldiers following the Oct 7, 2023 attack.
Berjaya Food reported a net loss of 91.5 million ringgit and a 35% drop in revenue for its full-year period that ended in June. In addition to the Middle East conflict, it also attributed the poor performance to a one-off loss from the disposal of its entire equity interest in Jollibean Foods in November.
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Berjaya had 393 Starbucks stores across Malaysia as of June 2023, its latest available annual report shows. It runs restaurants under the Kenny Rogers Roasters brand as well as cafes under the Paris Baguette brand.
The company’s shares declined 13% on Wednesday and were set for the lowest level since February 2022.
