Starbucks Revenue Tops Estimates, Maintains Outlook

By Aisha Al-Muslim 

Starbucks Corp. reported higher revenue in its latest quarter as the coffee giant accelerated growth in the Americas and Asia.

The company on Thursday also reiterated its outlook for fiscal 2018, but noted that its guidance excludes the impact of the planned closures of more than 8,000 company-owned stores in the U.S. on the afternoon of May 29.

Starbucks is closing the stores during that period to conduct antibias training for its employees after the recent fallout stemming from a Starbucks store manager in Philadelphia calling the police on two black men who were later arrested.

A video of the arrests went viral and Starbucks has been in crisis mode ever since, with executives apologizing publicly and to the men privately. The incident has also raised concerns among some employees about what to do in situations involving guests.

For fiscal 2018, the company continues to expect 3% to 5% comparable-store sales growth globally, compared with analysts' estimates of 2.4%. The company also guided for adjusted per-share earnings of $2.48 to $2.53, compared with analysts' forecasts of $2.49.

Starbucks shares, down 3.5% in the last year, fell 2.3% to $57.99 in post-market trading Thursday.

For the second quarter, the Seattle-based company posted a 2% increase in same-store sales globally, ahead of the 1.8% increase analysts had expected.

Same-store sales in the Americas segment grew by 2%, while growing at a 4% clip in China, the company's fastest-growing market.

Excluding one-time items, Starbucks earned 53 cents a share, in line with analysts' expectations.

Revenue jumped 14% to $6.03 billion, beating estimates of $5.93 billion.

Starbucks reported a second-quarter profit of $660.1 million, or 47 cents a share, up from $652.8 million, or 45 cents a share, in the year-ago period.

The company added 1.6 million active Starbucks Rewards members in the U.S., bringing the total up 12% over the prior year to 14.9 million. Mobile order and pay represented 12% of U.S. company-operated transactions.

The chain has been trying to use its loyalty reward program, mobile ordering and digital marketing to increase the frequency of guests' visits. It has also been focusing on drawing more people in the afternoon, when business is typically slow, with discounted items and a new "Happy Hour" promotion.

Write to Aisha Al-Muslim at [e-mail]

(END) Dow Jones Newswires

April 26, 2018 17:29 ET (21:29 GMT)

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