Starbucks shares which were down during the early hours trading on Thursday’s session after American coffee chain company delivered a growth in its global sales along with an adjusted earnings for the third fiscal quarter that were higher than most analyst estimates.
For its quarterly earnings report, the company posted earnings of 55 cents per share. While it met most analysts estimates of 55 cents EPC, the company’s revenue missed on most forecasts reporting only $5.66 billion missing estimates of $5.75 billion.
The company also cut its forecast for its full year earnings. Starbucks initially forecasted that its earnings per share would go from around $2.08 per share to $2.12 to now at a range of $2.05 to $2.06 per share. Starbucks also announced that its revenue growth forecast remains at a range of 8% to 10%.
Along with the weak revenue and a lower forecast for its full year earnings, Starbucks shares lost around 6% following the release of the quarter earnings report.
However, Starbucks was able to record their highest same-store sales in the United States for the quarter which rose by 5% due to the company’s recent move to come up with so called “instagrammable drinks” one of which was called the Unicorn Frappuccino which received an overwhelming response. This is the fifth consecutive quarter that the company posted upbeat same store sales in the U.S. However, Scott Maw who stands as Starbucks chief financial officer stated that the company remains more conscious regarding the ongoing quarter following ongoing concerns regarding the weaning retail sector.
Global same-store sales for the company was at around 4% during the quarter slightly missing most analyst estimates of a 4.9% growth. According to the company, the decline in their sales despite the reception of their new colorful available for a limited time only drinks were offset by the lower than expected sales in Starbucks core beverages.
However, it was the performance of its Teavana stores that impacted and resulted into most of the company’s losses. The company announced on Thursday that all 379 of its Teavana stores will be closed due to its underperformance. This will cut more than 3,000 jobs and will take place starting 2018.
Starbucks also announced that it has ongoing plans to expand and increase its overall presence in Asia following the failure of more than 300 Teavana stores in the United States. The company announced that it would be buying around fifty percent worth of stakes in more than 1,000 Starbucks stores all over China. The deal which would setback the company for about $1.3 billion would give the company full ownership of all Starbucks branches in the country.