Earnings Results: Starbucks stock falls as earnings — weighed down by China sales — miss estimates
Starbucks Corp.’s first-quarter profit and revenue failed to meet Wall Street estimates because of weakness in China, and the company’s stock fell sharply in extended trading Thursday.
shares dropped more than 3.5% after hours, after falling less than 1% in the regular session to close at $109.15.
The company said that while global same-store sales rose 5%, same-store sales in China fell 29%, dragging down international same-store sales, which had an overall drop of 13%. U.S. and North America same-store sales rose 10% year over year, mostly driven by a 9% rise in average ticket, or the amount spent by each customer who visits, while comparable transaction increased 1%.
According to the company, stores in the United States and China made up 61% of its worldwide portfolio in the first quarter, with 15,952 stores in the U.S. and 6,090 stores in China. Starbucks ended the quarter with 36,170 stores after opening 459 net new stores in the quarter.
Starbucks reported first-quarter net income of $855.2 million, or 74 cents a share, compared with $815.9 million, or 69 cents a share, in the year-ago period. Adjusted for restructuring and impairment costs as well as transaction costs related to the sale of the Seattle’s Best Coffee brand, earnings were 75 cents a share. Revenue rose to $8.71 billion from $8.05 billion in the year-ago quarter.
Analysts surveyed by FactSet had forecast adjusted earnings of 77 cents a share on revenue of $8.79 billion.
Starbucks is expected to address its outlook during its earnings call at 2 p.m. Pacific time.
Shares of Starbucks have increased more than 13% in the past 52 weeks, and are up nearly 10% so far this year, while the S&P 500 index
is up nearly 9% year to date.