Starbucks Gives Soft Profit Outlook--Update
January 21 2016 - 5:28PM
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 at
its U.S. cafes 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, up 45% in the past year, fell 4% to $56.70 a share 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, according to Consensus
Metrix.
Starbucks cited strong gift card sales during the holiday
period, a 4% increase in traffic, and strong results in its
Americas business, which includes the U.S., Canada and Latin
America.
Starbucks said its U.S. same-store sales were up 9% in the
quarter. The Seattle-based company is benefiting from efforts to
expand its offerings with more food items and alcohol. It has been
focusing on digital efforts and launched a mobile ordering and pay
app in September.
Altogether at the Americas division, same-store sales were up
9%. Analysts had forecast 7.7% growth.
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.
Same-store sales growth of 1% in the Europe, Middle East and
Africa division fell below the 4.5% increase analysts had been
expecting.
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.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
(END) Dow Jones Newswires
January 21, 2016 17:13 ET (22:13 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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