wall streets worried chinas draconian covid19 restrictions which have weighed heavily on the worlds second largest economy for nearly three years could drag down earnings at estee lauder el and starbucks sbux when the two us companies report this week at the club weve also tempered our expectations given the heavy exposure of both holdings to china but believe the headwinds are temporary and that the chinese economy will gradually reopen in the quarters ahead estee lauder reports its 2023 fiscal firstquarter and fullyear results wednesday before the opening bell analysts expect earningspershare to plummet by 30 yearonyear to 131 a share while total revenue should fall by 105 to 393 billion according to estimates compiled by refinitiv starbucks reports fiscal fourthquarter and fullyear results after the closing bell on thursday analysts expect earningspershare to slide by 28 yearonyear to 72 cents a share according to refinitiv total revenue is expected to climb by 25 compared with the year prior to 831 billion wall streets take multinationals operating in china have largely seen sales come under pressure due to continued covid lockdowns part of beijings socalled zerocovid policy cosmetics giant estee lauder which relies on china for about 36 of its revenue should see weakness in the region in its fiscal first before ultimately posting positive growth in 2023 according to analysts at the telsey advisory group while the degree of underperformance varies china generally continues to be the weakest region among the companies that have reported results for the quarter ending september given lockdowns supply chain disruptions and depressed store traffic the analysts wrote in a recent research note at the same time analysts at credit suisse wrote in a note while we still think el has the clearest china profit growth story in our coverage over the next decaderecent government comments suggest the covid zero policy is likely to remain an overhang for consumer brands in the near term coffee chain starbucks which relies on china for roughly 13 of sales is another us retailer facing mounting china concerns according to baird analysts at the bank wrote in a recent note that they expected economic restrictions in china to dampen starbucks outlook when it reports this week ongoing covid19 lockdowns in china could lead to weakerthanmodeled international segment comparables and reduce confidence in the recovery scenario that appears needed for sbux to deliver its threeyear growth targets the analysts wrote in a recent note still analysts at credit suisse argued the china should reverse to a tailwind over time for starbucks calling the market one of the most meaningful drivers of upside to numbers the club take we hope that china takes steps to ease covid restrictions which would restimulate business activity and ultimately support future earnings for our holdings we continue to see starbucks as having massive growth potential in international markets particularly china where the coffee retailer plans to open thousands of new stores the shortterm setback from the chinese governments stringent covid policies should be seen as a buying opportunity similarly with estee lauder were convinced that once covid restrictions are lifted chinese demand for its beauty products will improve beyond the china headwind we maintain our thesis that estee lauder is a leader is its industry that can withstand shortterm pressures the club bought up 40 new shares of el last week overall these two club names show that investors can have shortterm concerns based on macroeconomic pressures while still being bullish longterm jim cramers charitable trust is long sbux el see here for a full list of the stocks as a subscriber to the cnbc investing club with jim cramer you will receive a trade alert before jim makes a trade jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trusts portfolio if jim has talked about a stock on cnbc tv he waits 72 hours after issuing the trade alert before executing the trade the above investing club information is subject to our terms and conditions and privacy policy  together with our disclaimer  no fiduciary obligation or duty exists or is created by virtue of your receipt of any information provided in connection with the investing club no specific outcome or profit is guaranteed