Starbucks on Thursday reported quarterly profit that matched analysts’ estimates, but tempered expectations for the current quarter amid softness in the US retail and restaurant industries, and said it would close all 379 of its Teavana stores.
The company’s shares rose slightly in late trade to $59.60 (€51). The results landed just hours after Starbucks announced plans to buy the remaining 50 per cent share of its East China business from its joint venture partners for about $1.3 billion, in its biggest ever acquisition. Net income fell to $691.6 million, or 47 cents per share, for the third quarter ended July 2nd. That was down from $754.1 million, or 51 cents per share, a year ago.
Starbucks had a profit of 55 cents per share, excluding items, which matched analysts’ average estimate.
US restaurants are locked in a bitter fight for market share, battling new competition from non-traditional rivals such as meal kit sellers and convenience stores.
Sales at its mainstay US cafes open at least 13 months rose 5 per cent in the latest quarter.
Traffic turned slightly positive, reversing three straight quarters of declines that the company attributed in part to changing its loyalty programme to focus on dollars spent rather than the number of purchases made. Same-store sales from China were up a robust 7 per cent in the latest quarter. – Reuters
