By Alana Wise
NEW YORK (Reuters) - Starbucks Corp
But investors saw bright spots in the results, as Starbucks, the world's biggest coffee retailer, reported revenue rose to a record high in its fiscal third quarter. Shares of Starbucks increased 0.9 percent in after-hours trade.
The Seattle-based company reported same-store sales rose 1 percent globally and in its U.S. cafes in its third quarter ended July 1, while growth in the once-robust China market slipped 2 percent amid fierce competition and stricter regulations on delivery services.
Starbucks said a 3 percent increase in average tickets drove the rise in same-store sales for quarter.
In the year-ago quarter, Starbucks' same-store sales grew by 5 percent in the United States and Americas and 4 percent globally. The sales dip in China is an even steeper departure from the 7 percent growth rate reported in last year's quarter.
Revenue rose to $6.3 billion from $5.7 billion in the year prior. Starbucks' closely monitored digital membership programme grew 14 percent year-over-year to 15.1 million active users.
Wall Street had been braced for a disappointing quarter from the ubiquitous coffee brand. Starbucks last month warned of lower quarterly sales growth and announced plans to close about 150 U.S. cafes in the next fiscal year, triple the typical number of closures, as it seeks to enter under-served markets in the U.S. South and Midwest. [nL4N1TL4PI]
Starbucks' shares down 10.4 percent year to date.
Same-store sales in China, which has been Starbucks' biggest growth driver, declined by 2 percent, versus growth of 4 percent and 6 percent in the prior two periods.
The company said it now expects full-year same-store sales growth to be "just below" its 3 percent to 5 percent targeted range, and sees fourth-quarter growth at the lower end of its 3 percent to 5 percent range.
Starbucks' report comes exactly one month after Howard Schultz, the brand's elder statesman and former chief executive, stepped down as executive chairman, in a move that stoked investor concerns on how the company would evolve after nearly four decades of Schultz's near-constant presence.
(Reporting by Alana Wise; Editing by Leslie Adler)
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Updated Date: Jul 27, 2018 03:05 AM