Friday, April 22, 2016

Starbucks cafe sales growth falls short, shares fall


Starbucks Corp, the world's largest coffee chain, said on Thursday quarterly cafe sales grew less than expected in every region where it operates and issued a disappointing full-year forecast, sending its shares down about 4%.

Seattle-based Starbucks said global sales at cafes open at least 13 months rose 6% in the fiscal second quarter ended March 27, compared with the year-ago period. Analysts had expected an overall same-cafe sales gain of 6.7%, according to research firm Consensus Metrix.

Sales in the dominant Americas region grew 7%, after rising 9% in the first quarter. The China/Asia Pacific region (CAP) posted 3% growth.

Starbucks' China business remains strong, and the regional gain was reduced after sales from slower-growing Japan were included, company executives said on a conference call after earnings were released.

Europe, the Middle East and Africa (EMEA) had sales growth of one per cent, Starbucks said.

Analysts had expected gains of 4.6% from CAP and 3.4% from EMEA.

Starbucks narrowed its full-year profit forecast to US$1.88 to US$1.89 per share, from a previous range of US$1.87 to US$1.89. Analysts' estimates were at the top end of that range, according to Thomson Reuters I/B/E/S.

Second-quarter net income was US$575.1 million, or 39 US cents per share, matching the average of analysts' profit estimates complied by Thomson Reuters I/B/E/S.

Starbucks shares fell to US$58.15 in extended trading, off their all-time high of US$62.57 on Oct 1.

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