Starbucks Corp (SBUX.O) reported better-than-expected quarterly revenue on Thursday, as results from the U.S.-dominated Americas region soothed concerns that the world's biggest coffee seller had succumbed to a broader restaurant slump.Starbucks gets the bulk of its sales from the United States, where it and other chains have been battling heady competition, unusually low grocery prices and jitters over the rough and tumble U.S. presidential contest.Same-store sales in the U.S.-led Americas region, which produces the lion's share of Starbucks sales, rose 5 percent to match estimates from Consensus Metrix.Still, some analysts worry that Starbucks' once-robust growth is trending in the wrong direction. "Same-store sales have cooled, due to a shift in its loyalty programme and a prolonged period of raising prices aggressively," Hedgeye Risk Management analyst Howard Penney said. Edward Jones analyst Jack Russo said the company's fiscal 2017 earnings guidance, which was below analysts consensus, showed Starbucks being careful in a tough economic and competitive environment.
"I think they are just playing cautious right now," he said.Chief Operating Officer Kevin Johnson told Reuters that sales at Starbucks cafes open at least 13 months accelerated a bit during the quarter, although traffic numbers were again down due to the company's recent change to its loyalty programme that assigns rewards based on dollars spent rather than transactions.
Net income attributable to shareholders rose to $801 million, or 54 cents per share, in the fourth quarter ended Oct. 2, from $652.5 million, or 43 cents per share, a year ago.Excluding items, the company earned 56 cents per share.Total revenue rose to $5.71 billion from $4.91 billion, topping the average expectation of $5.68 billion, according to Thomson Reuters I/B/E/S.
Starbucks forecast net earnings of 50 cents to 51 cents per share for the fiscal first quarter, which includes major holidays such as Christmas. Analysts had expected a profit of 55 cents per share.Shares of the world's largest coffee chain were up 0.7 percent at $52.15 in after-hours trading. (Reporting by Lisa Baertlein in Los Angeles and Arathy S Nair in Bengaluru; Editing by Saumyadeb Chakrabarty and Bernard Orr)
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First Published On : Nov 4, 2016 04:45 IST