Starbucks Earnings Forecast Disappoints
April 21 2016 - 4:48PM
Dow Jones News
By Lisa Beilfuss
Starbucks Corp. said profit in its latest quarter increased 16%
as the coffee chain saw increased domestic demand and drew in more
mobile users.
But the company's earnings forecast for the current quarter came
in short of expectations, helping send shares down 4.2% in
after-hours trading.
Sales at shops open at least a year rose 6% in the latest
period, shy of the 6.7% rise analysts anticipated.
Domestic sales drove results during the quarter, with U.S. sales
rising 7%. That helped to offset slower growth in Europe, where the
company's business has been hurt by terror attacks in Paris and
Brussels and where the strong dollar continues to make its drinks
and snacks more expensive in foreign currencies. Sales in Europe
rose 1% in the quarter.
The company continues to grow internationally, on Thursday
opening its first store in South Africa -- long seen as a gateway
to African markets.
Meanwhile, Starbucks has worked to diversify beyond its coffee
roots and is in the midst of a five-year plan to double its U.S.
food revenue. Digital initiatives such as a new mobile app have
also helped cafes operate more efficiently, in turn boosting
sales.
Starbucks said mobile order and usage doubled year over year,
with the company processing 8 million mobile order and pay
transactions a month. According to analysts at RBC, users of the
mobile app spend three times more than the average customer.
Over all, Starbucks reported a profit of $575.1 million, or 39
cents a share, up from $494.9 million, or 33 cents a share, a year
earlier.
Revenue increased 9.4% to $4.99 billion from $4.56 billion.
Analysts projected 39 cents in earnings per share on $5.03 billion
in revenue according to Thomson Reuters.
Earnings in the current quarter will come in between 47 cents
and 48 cents, the company said, short of the 49 cents analysts are
looking for. For the year, the company pulled up the low-end of its
guidance range, now forecasting $1.88 to $1.89 in adjusted earnings
per share.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
April 21, 2016 16:33 ET (20:33 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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