Starbucks
glass
art
on
a
store
in
Tokyo.
Jakub
Porzycki
|
Nurphoto
|
Getty
Images
Starbucks
on
Tuesday
reported
quarterly
revenue
that
missed
analysts’
expectations
as
both
its
U.S.
and
international
cafes
faced
weaker
demand.
Still,
the
results
weren’t
as
bad
as
investors
feared.
Shares
of
the
company
rose
more
than
5%
in
extended
trading.
Here
is
what
the
company
reported
compared
to
what
Wall
Street
was
expecting,
based
on
a
survey
of
analysts
by
LSEG:
-
Earnings
per
share:
93
cents
adjusted
vs.
93
cents
expected -
Revenue:
$9.11
billion
vs.
$9.24
billion
expected
The
coffee
giant
reported
fiscal
third-quarter
net
income
attributable
to
the
company
of
$1.05
billion,
or
93
cents
per
share,
down
from
$1.14
billion,
or
99
cents
per
share,
a
year
earlier.
Excluding
items,
Starbucks
earned
93
cents
per
share.
Net
sales
dropped
1%
to
$9.11
billion.
The
company’s
same-store
sales
fell
3%
in
the
quarter,
fueled
by
a
5%
decline
in
transactions.
Traffic
to
its
U.S.
stores
fell
again
this
quarter,
dropping
6%.
Domestic
same-store
sales
fell
2%,
boosted
by
an
increase
in
average
ticket.
Last
quarter,
executives
discussed
plans
to
revive
the
lagging
U.S.
business
that
included
leaning
on
discounts
and
new
drinks
to
bring
back
customers
who
had
abandoned
the
chain.
CEO
Laxman
Narasimhan
said
on
Tuesday
that
more
shoppers
are
buying
its
packaged
coffee
at
grocery
stores,
but
a
“challenging
consumer
environment”
is
weighing
on
sales
at
its
cafes.
Still,
the
company
sees
green
shoots
in
the
U.S.
business
already,
like
the
success
of
new
products.
Its
Summer-Berry
Refreshers
drinks
with
boba-inspired
pearls
broke
the
company’s
record
for
a
week-one
product
launch.
Next
quarter
will
also
bring
the
return
of
its
Pumpkin
Spice
drinks,
a
perennial
favorite
since
its
launch
more
than
two
decades
ago.
The
company
now
allows
customers
to
order
via
its
mobile
app
and
pay
without
joining
its
rewards
program.
Improvements
to
its
app
also
mean
that
it’s
more
accurate
at
predicting
when
an
order
will
be
ready,
lowering
customer
complaints.
In
a
letter
posted
on
LinkedIn
after
last
quarter’s
gloomy
report,
former
CEO
Howard
Schultz
said
the
company
needed
to
fix
the
mobile
app
experience
to
win
back
customers.
Schultz
isn’t
the
only
investor
upset
with
Starbucks’
performance
lately.
Activist
hedge
fund
Elliott
Management
has
accrued
a
stake
in
Starbucks.
Narasimhan
acknowledged
that
the
firm
is
a
shareholder
in
Starbucks
and
said
conversations
so
far
have
been
constructive.
Outside
of
North
America,
same-store
sales
slid
7%.
In
China,
Starbucks’
second-largest
market,
same-store
sales
tumbled
14%
as
both
average
ticket
and
transactions
shrank.
Starbucks
has
faced
stiffer
competition
in
China
from
local
coffee
shops
that
undercut
the
coffee
giant
on
price.
But
there
are
encouraging
signs
in
the
country,
too.
Average
daily
transactions
and
weekly
sales
in
China
have
improved
sequentially
quarter-over-quarter,
according
to
Narasimhan.
The
company
is
in
the
“early
stages”
of
exploring
strategic
partnerships
to
accelerate
its
growth
in
China,
Narasimhan
said.
It’s
unclear
what
kind
of
shape
that
partnership
could
take.
Starbucks
opened
526
net
new
stores
in
the
fiscal
quarter.
The
company
reiterated
the
outlook
it
provided
last
quarter.
The
company
projects
revenue
growth
of
a
low
single-digit
percentage
and
earnings
per
share
growth
in
a
range
of
flat
to
a
low
single-digit
percentage.
