SCK Company, the South Korean operator of Starbucks, reported a second-quarter operating loss of 18.4 billion won ($13.4 million).
This result reverses a 40.3 billion won profit recorded during the same period last year.
Management attributes the loss to a marketing controversy involving a Tank Day tumbler promotion.
The campaign launched on the anniversary of the 1980 Gwangju Democratic Uprising and used language perceived as mocking pro-democracy demonstrators.
Public backlash forced the cancellation of the campaign and the removal of the unit’s CEO.
The company also implemented nationwide store closures for employee sensitivity training, further impacting regional sales and profitability.