Starbucks brews up slower growth in Q1, but earnings top estimates
Starbucks’ revenue and same-store sales fell slightly short of Street estimates even amid a strong performance from the China region.
Starbucks earned $2.25 billion, or $1.57 a share, in the period ended December 31, compared with $752 million, or 51 cents a share, in the year-ago period. Adjusted for one-time items, Starbucks earned 65 cents a share, beating the 57 cents per share analysts expected. Profit gains were fueled by the sale of Starbucks’ Tazo tea brand and its takeover of 1,400 stores in China, which were previously part of a joint venture.
Net revenues rose 6% to $6.1 billion from $5.7 billion, just missing Street forecasts. On the chain’s earnings call, president and CEO Kevin Turner said that sales in the U.S. were softer than expected due to weak sales of limited-time holiday beverages, merchandise and gift cards.
Starbucks’ global same-store sales rose 2%, missing Street forecasts of 3%, and below the 3% growth the company posted in the same quarter a year ago. Same-store sales in the U.S. sales increased 2%. In China, where Starbucks is “laser-focused” on accelerating growth, same-store sales rose 6% and revenue grew 30%.
“Today, Starbucks has two powerful, independent but complementary engines driving our global growth, the U.S. and China,” said president and CEO Kevin Turner. “Our work to streamline the company is sharpening our focus on our core operating priorities.”
Citing a lower U.S. tax rate, Starbucks raised its fiscal 2018 earnings forecast to a range of $2.48 to $2.53 per share, excluding items, up from $2.30 to $2.33 per share previously.
Starbucks said that membership in its rewards program in the U.S. grew 11% to 14.2 million, with member-spend representing 37% of U.S. company-operated sales. Mobile order and pay represented 11% of U.S. company-operated transactions.
The coffee giant opened 700 net new stores globally, bringing total store count to 28,039 across 76 markets.
Starbucks earned $2.25 billion, or $1.57 a share, in the period ended December 31, compared with $752 million, or 51 cents a share, in the year-ago period. Adjusted for one-time items, Starbucks earned 65 cents a share, beating the 57 cents per share analysts expected. Profit gains were fueled by the sale of Starbucks’ Tazo tea brand and its takeover of 1,400 stores in China, which were previously part of a joint venture.
Net revenues rose 6% to $6.1 billion from $5.7 billion, just missing Street forecasts. On the chain’s earnings call, president and CEO Kevin Turner said that sales in the U.S. were softer than expected due to weak sales of limited-time holiday beverages, merchandise and gift cards.
Starbucks’ global same-store sales rose 2%, missing Street forecasts of 3%, and below the 3% growth the company posted in the same quarter a year ago. Same-store sales in the U.S. sales increased 2%. In China, where Starbucks is “laser-focused” on accelerating growth, same-store sales rose 6% and revenue grew 30%.
“Today, Starbucks has two powerful, independent but complementary engines driving our global growth, the U.S. and China,” said president and CEO Kevin Turner. “Our work to streamline the company is sharpening our focus on our core operating priorities.”
Citing a lower U.S. tax rate, Starbucks raised its fiscal 2018 earnings forecast to a range of $2.48 to $2.53 per share, excluding items, up from $2.30 to $2.33 per share previously.
Starbucks said that membership in its rewards program in the U.S. grew 11% to 14.2 million, with member-spend representing 37% of U.S. company-operated sales. Mobile order and pay represented 11% of U.S. company-operated transactions.
The coffee giant opened 700 net new stores globally, bringing total store count to 28,039 across 76 markets.