Starbucks brews hot and cold in Q2

Starbucks Corp. reported profit for the second quarter that exceeded expectations, but it disappointed on sales. The chain also offered a third-quarter earnings outlook that was shy of forecasts.



For the quarter ended March 27, Starbucks reported $4.99 billion in sales, up 9% from $4.56 billion in the year-ago period. Although sales set a new record for a non-holiday quarter, they but still fell short of analyst estimates of $5.03 billion.



Net income rose 18% to $575.1 million on strong U.S. sales.



“Starbucks Q2 represented another quarter of solid growth, with the highest revenues of any non-holiday quarter in our history and excellent financial, operating and profit performance,” said Scott Maw, CFO. “The record-setting performance we delivered in the first half of fiscal 2016 ideally positions us to benefit from the investments we are making in our partners, in our stores and in groundbreaking innovation, and to continue delivering world class returns to our shareholders into the future.”



Global same-store-sales increased 6%; U.S. same-store sales rose 7%. Starbucks noted that food now makes up over a fifth of its revenue here at home.



Starbucks reiterated its plans for 1,800 net new store openings in 2016, with some 700 in the Americas region (half licensed), 900 in China/Asia Pacific (two-thirds licensed) and approximately 200 in EMEA, with the majority licensed.



"Starbucks record Q2 financial and operating performance - including a stunning 18% increase in revenues and a 5% increase in transactions in China -- underscores the strength of the Starbucks brand and the resiliency of our global retail and CPG businesses," said Howard Schultz, chairman and CEO. "Loyalty, technology and innovation are continuing to fuel our digital flywheel and propel our business forward all around the world."