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 16:35 ET (20:35 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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