Starbucks Gives Soft Profit Outlook
January 21 2016 - 4:57PM
Dow Jones News
By Chelsey Dulaney
Starbucks Corp. on Thursday offered a soft earnings outlook for
its current quarter, despite posting strong core sales growth and
better-than-expected profit for the fiscal first quarter.
For the second quarter, Starbucks forecast adjusted earnings of
38 cents to 39 cents a share, below Wall Street's consensus
forecast of 40 cents, according to Thomson Reuters.
Shares fell 4.4% to 56.45 in after-hours trading.
The disappointing forecast came as Starbucks reported an 8%
increase in same-store sales for the quarter ended Dec. 27, topping
analysts' forecast for 7.3% growth.
Starbucks cited strong gift card sales during the holiday period
and higher traffic, which grew 4% on a same-store basis in the
quarter.
But growth disappointed in its China and Asia Pacific division,
where same-store sales rose 5%. That was below the 6.1% growth
analysts had forecast.
Starbucks has set a torrid pace of growth in Asia in recent
quarters, but concerns are mounting over a slowdown in China's
economy.
Starbucks has also been working to expand its offerings beyond
coffee with more food items and alcohol. It has been focusing on
digital efforts and launched a mobile ordering and pay app in
September. Altogether, the efforts have helped drive strong
momentum at its Americas business, which includes the U.S., Canada
and Latin America.
In the latest quarter, same-store sales in the that division
rose 9%. Analysts had forecast 7.7% growth.
Overall, Starbucks reported earnings of $687.6 million, or 46
cents a share, down from $983.1 billion, or 65 cents a share, a
year earlier. The prior-year period was boosted by a $391 million
gain related to a joint venture.
Starbucks had forecast earnings of 44 cents to 45 cents a share
for the quarter.
Revenue rose 12% to $5.37 billion. Analysts had forecast $5.39
billion in revenue.
Starbucks backed its forecast for full-year adjusted earnings of
$1.87 to $1.89 a share and same-store sales growth just above the
mid-single digits.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
(END) Dow Jones Newswires
January 21, 2016 16:42 ET (21:42 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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