“Looking ahead, however, the International segment may face near-term challenges.”

In context

“regions posted double-digit revenue growth, including our licensed markets. Most of these markets revenues have reached or exceeded pre-COVID levels and have set new record highs in recent quarters, driven by strong innovation and expanded digital capabilities. Strong momentum, combined with the sizable opportunity afforded by new store formats, gives us great confidence in the long runway of growth ahead for our international markets. Operating margin for the International segment was 12.4% in Q3, down 950 basis points from the prior year, mainly driven by the leverage related to COVID impacts in China, sustained inflationary headwinds, lapping higher prior year government subsidies as well as partner investments, partially offset by strong sales leverage across markets outside of China. Looking ahead, however, the International segment may face near-term challenges. Given the prolonged lockdowns in China with limited mobility recovery in Q3, the headwinds now extend into Q4 as the market continues to recover. The current pace of recovery implies that China's operating income contribution as a percent of global operating income may be reduced further than what we had previously anticipated to roughly 1/4 of the contribution realized in a typical fiscal year. Outside of China, the increase in COVID cases around the world may temper the rapid growth we are currently seeing in many markets. Moving on to channel development. The segment's revenue grew 16% to $480 million in Q3, driven by growth in both the Global Coffee Alliance and our ready-to-drink businesses. Channel development continues to play an essential role in amplifying and diversifying the St”