Starbucks Chief Vows to Learn From Philadelphia Arrests -- Update
April 26 2018 - 7:19PM
Dow Jones News
By Julie Jargon and Aisha Al-Muslim
Starbucks Corp.'s chief executive promised to prevent an
incident like the arrest of two black men at one of its coffee
shops in Philadelphia this month from reoccurring.
"I am personally committed to acting on several fronts to make
sure it never happens again," Chief Executive Kevin Johnson told
investors on Thursday as Starbucks reported higher-than-expected
sales but flat traffic to U.S. stores in its fiscal second
quarter.
Shares fell 1.8% to $58.30 in post-market trading. "We need to
move transactions in the right direction," Chief Operating Officer
Rosalind Brewer said in an interview. She added that Starbucks
wants to attract more customers in the afternoon, when business is
slow. The company is planning new advertisements to encourage
afternoon visits.
Starbucks reiterated its outlook for comparable-store sales
growth of between 3% and 5% globally this fiscal year but noted
that excludes the impact of closing 8,000 company-owned shops next
month for a day of antibias training in the wake of the
Philadelphia incident. "We're not seeing an impact on comparable
sales as a result of Philadelphia," Mr. Johnson said.
A Starbucks manager called police after the two men asked to use
the restroom without purchasing anything and allegedly refused to
leave. A video of their arrests in the store went viral and
Starbucks executives traveled to Philadelphia to meet with them and
community leaders.
Mr. Johnson said closing stores next month for antibias training
is just one step in a new effort to treat customers with more
sensitivity.
"All companies make mistakes," Mr. Johnson said. "Great
companies learn from them and improve and that's exactly what we
hope to do."
Starbucks generated sales from less frequent customers after
extending mobile ordering to non-loyalty club members in March, Ms.
Brewer said. Mobile orders made up 12% of U.S. company-operated
transactions in the quarter, the company said.
The Seattle-based company posted a 2% increase in same-store
sales globally in the second quarter, ahead of the 1.8% increase
analysts had expected. Same-store sales grew 4% in China, the
company's fastest-growing market.
Excluding one-time items, Starbucks earned 53 cents a share.
Revenue jumped 14% to $6.03 billion, beating estimates of $5.93
billion. Starbucks reported a second-quarter profit of $660.1
million, or 47 cents a share, up from $652.8 million, or 45 cents a
share, in the year-ago period.
Write to Julie Jargon at julie.jargon@wsj.com and Aisha
Al-Muslim at aisha.al-muslim@wsj.com
(END) Dow Jones Newswires
April 26, 2018 19:04 ET (23:04 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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