Starbucks Tempers Revenue Forecast

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 [e-mail]

(END) Dow Jones Newswires

January 26, 2017 16:57 ET (21:57 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.