Starbucks on Tuesday reported record revenue for the April-June period, despite continuing store closures and reduced hours in China due to COVID-19 lockdown.

Revenue came in at $8.15 billion, beating expectations of $8.11 billion. Same-store sales in China, the second-largest market after the US, fell 44% in the fiscal third quarter. Starbucks said about 2,000 stores in 50 cities were operating under COVID restrictions as of the end of the quarter.

The coffee chain has 15,650 stores in the US and 5,761 in China.

According to Starbucks China, the second quarter was the worst since the outbreak. “For about two-thirds of the quarter, Shanghai, our largest market with more than 940 locations, was closed due to the lockdown. In Beijing, 150 stores, or one-third of the total, have been closed for nearly six weeks.

Data from National Bureau of Statistics of China shows that in the first half of the year, the total retail sales of consumer goods was 21 trillion yuan, a year-on-year decrease of 0.7%. Among them, catering revenue fell by 7.7% to 2 trillion yuan.

Meanwhile, Starbucks faces increasing competition in China as more local coffee brands vie for market share.

However, declining revenue in China was offset by strong demand in the US. During the period, same-store sales rose 9% in the country.

Starbucks said its net income fell 21% to $912.9 million due to higher spending on labor, worker training and supply chain costs. Last fall, the company announced a $1 billion investment in employee wages and benefits to boost wages for US workers.