Starbucks Corp.'s investments in mobile technology and strong sales of Christmas merchandise helped the coffee giant post better-than-expected first-quarter earnings. But its outlook for the current quarter disappointed investors, pushing its shares lower.

The company forecast adjusted earnings of 38 cents to 39 cents a share for its fiscal second quarter, below Wall Street's forecast of 40 cents, according to Thomson Reuters.

Starbucks shares fell 4.1% to $56.60 in after-hours trading.

The disappointing outlook came as the retailer reported an 8% increase in global same-store sales for the quarter ended Dec. 27, topping analysts' forecast for 7.3% growth.

Starbucks' mobile investments, which have made it easier for customers to order and buy coffee, and robust Christmas sales helped insulate the company from the challenges other bricks-and-mortar retailers faced over the holidays.

Nearly 22% of the company's U.S. transactions in the quarter were conducted using the company's mobile payment app. Starbucks hasn't broken out transactions made specifically from the mobile order part of the app, which was rolled out nationally in September. But Starbucks posted the strongest growth during its critical morning business in the U.S. in more than five years and the mobile order and pay app was the single biggest contributor to that growth, Chief Financial Officer Scott Maw said in an interview.

Strong gift card sales during the holidays also bolstered Starbucks' results. Despite an online brouhaha in which critics claimed the chain's unadorned red holiday cups meant Starbucks was anti-Christmas, the chain sold a record number of Starbucks cards for the Christmas quarter.

The amount of money downloaded on Starbucks cards in the U.S. and Canada rose 18% to $1.9 billion in the company's fiscal first quarter, which means one out of every six Americans received a Starbucks card over the holidays, up from one in seven in the year-ago period, Chief Executive Howard Schultz said in an interview.

Starbucks cafes also for the first time sold out of packaged Christmas blend coffee.

Mr. Schultz doesn't credit the red-cup controversy for the strong gift card and Christmas coffee sales, but said the attention didn't hurt. "Clearly it elevated Starbucks in the zeitgeist of culture," he said.

In the latest quarter, same-store sales in the Americas division, which includes the U.S., Canada and Latin America, rose 9%. Analysts had forecast 7.7% growth.

But growth trailed expectations in the company's China and Asia Pacific division. Same-store sales rose 5%, 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. Still, Starbucks opened more than 150 cafes in China in the first quarter.

The Seattle company's division that includes Europe also disappointed investors, posting 1% same-store sales growth against analyst estimates for a 4.5% gain. The company blamed the weakness in its European business on declining customer visits in the aftermath of the Paris terrorist attacks in November.

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.

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 in percentage terms.

Chelsey Dulaney contributed to this article.

Write to Julie Jargon at julie.jargon@wsj.com

 

(END) Dow Jones Newswires

January 21, 2016 18:35 ET (23:35 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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