Berjaya Food, which operates 393 Starbucks stores in Malaysia, reported a net loss of 38.2 million ringgit (about $8.1 million) in the second quarter of this year, contrasting with a profit of 17.28 million ringgit in the same period last year. Sales for the quarter dropped by more than half compared to the previous year.
For the fiscal year ending June 2024, the company's net loss reached 91.5 million ringgit, with overall sales decreasing by 35 percent. Berjaya Food's stock price also fell 13 percent, reaching its lowest level since February 2022.
The company attributed the severe decline in sales to "sentiment related to the Middle East conflict." Starbucks, along with other American fast-food chains, faced online criticism and boycotts in the Middle East and Southeast Asia over claims of supporting Israel in the Gaza war.
Starbucks has repeatedly denied allegations of funding the Israeli government or military through lengthy statements.
Malaysia, an Islamic nation, has openly supported Hamas since the October 7, 2023 attack on Israel. The country has held large pro-Palestinian rallies and banned Israeli-flagged ships from docking at its ports.