Starbucks Tempers Revenue Forecast
January 26 2017 - 05:12PM
Dow Jones News
By Anne Steele
Starbucks Corp. lowered its revenue forecast for the year while
posting revenue for the latest quarter below expectations.
Shares, up 5.3% so far this year through Thursday's close, fell
2.7% after hours to $56.89.
The company now expects revenue growth for 2017 of 8% to 10%,
compared with prior guidance for double-digit growth. Starbucks
backed its guidance for earnings of $2.12 to $2.14 a share and
comparable sales improving in the mid-single digits.
Chief Financial Officer Scott Maw pointed to "a challenging
environment for restaurant retailers overall."
The coffeehouse chain reported that comparable sales, a closely
watched metric that compares sales at locations open at least 13
months, climbed 3% in the latest quarter.
In all for the December quarter, Starbucks earned $751.8
million, or 51 cents a share, up from $687.6 million, or 46 cents,
the year before. Excluding certain items, profit rose to 52 cents a
share from 46 cents a share a year earlier.
Revenue climbed 6.7% to $5.73 billion. Analysts surveyed by
Thomson Reuters had forecast earnings of 52 cents on $5.85 billion
in sales.
Domestic sales, which account for the bulk of business, rose 7%
in the quarter with comparable sales increasing 3%. Company
officials have pledged to return the U.S. business to historical
levels of at least 5% comparable-sales increases.
Comparable sales in Europe, Middle East and Africa shrank 1%
from the year-ago period. China and the Asia Pacific region posted
a 5% comparable-sales increase. China, a key pillar in Starbucks's
international expansion that is expected to overtake the U.S. as
the largest single market, saw a 6% increase in comparable
sales.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
January 26, 2017 16:57 ET (21:57 GMT)
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