Starbucks Corp trimmed its profit forecast and posted disappointing quarterly sales on Thursday, squeezed by competitors ranging from boutique coffee sellers like Intelligentsia and lower-price rivals including McDonald’s.

Investors used to Starbucks beating expectations and raising profit outlooks sent shares down 3.4 per cent in extended trading.

Hurricanes Harvey and Irma battered same-store sales at more than 1,100 cafes in the United States, which still accounts for the lion’s share of operating income. Sales at US cafes were down two per cent for the quarter that ended October 1. Excluding the hurricane impacts, they would have been up three per cent � still just short of analysts’ estimate.

During a conference call, executives also pegged the same-store sales weakness to slower service as workers juggled mobile ordering, complex menus and other issues as well as soft restaurant foot traffic.

The Seattle-based coffee chain cut its long-term earnings target to growth of 12 per cent or greater per share from its prior call for growth of 15 per cent to 20 per cent.

Fourth-quarter revenue missed Wall Street’s target after sales at established global cafes gained two per cent, less than analysts’ average target of 3.2 per cent, according to Consensus Metrix.

Starbucks, which is cutting costs, streamlining menus and selling or shuttering some businesses, also announced a deal to sell its Tazo tea brand to Unilever Plc for $384 million. Analysts have warned that the Seattle-based company is being “middled” by rising competition on the value and quality fronts and that it must bolster sales of higher-priced speciality drinks and breakfast sandwiches.

CEO Kevin Johnson told Reuters in an interview that there was no evidence Starbucks was being hit by competition. “We are not going to be squeezed in the middle,” he said.

But during a conference call with analysts, Chief Financial Officer Scott Maw said, “With competitive pressures on the rise, we remain laser-focused on driving profitable share growth as we head into calendar 2018.”

US convenience stores and fast-food chains are improving quality and pricing aggressively.

McDonald’s Corp recently expanded its McCafe menu with new macchiatos and lattes and is selling small McCafe espresso drinks for $2. Elsewhere, Dunkin’ Brands Group Inc is offering special deals on breakfast sandwiches in its bid to win breakfast.

At the same time, upscale craft coffee rivals like Nestle SA’s Blue Bottle and Intelligentsia are opening more shops.

In the last 12 months, Starbucks shares are up about four per cent, while the S&P 500 index is up more 20 per cent. Its stock has been trading at a price-to-earnings ratio of 27.8, slightly above McDonald’s but about half that of Chipotle Mexican Grill Inc according to Thomson Reuters data.

Total net revenue decreased 0.2 per cent to $5.70 billion, compared with analysts’ revenue target of $5.80 billion, according to Thomson Reuters I/B/E/S.

Net income attributable to the company fell 1.6 per cent to $788.5 million. Excluding items, it earned 55 cents per share, in line with Wall Street targets.

Starbucks has been adding working hours at some US stores to ease backups caused by a flood of mobile orders. Meanwhile, cities and states are boosting the minimum wage and a tightening labour market is forcing some chains to increase pay and benefits to recruit and retain workers.

The company said results should get a bump from its pending $1.3 billion purchase of the remaining 50 per cent of its East China business from joint venture partners. That deal will give Starbucks ownership in 1,300 cafes in the area that includes Shanghai. Same-store sales from China were up eight per cent in the latest quarter, but the broader China and Asia Pacific region posted a rise of two per cent, versus expectations of 3.2 per cent.

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