Business Standard

Starbucks reports flat U.S. traffic, shares slip

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Reuters LOS ANGELES
By Lisa Baertlein
LOS ANGELES (Reuters) - Starbucks Corp on Thursday reported flat traffic at established U.S. cafes for the second quarter in a row amid intense competition from upscale coffee houses as well as fast-food chains and convenience stores.
Shares in the world's biggest coffee chain, which repeatedly has said that it is not losing business to rivals, fell 2.4 percent in extended hours as investors worry that growth in the company's most important market is cooling.
Same-store sales for the U.S.-dominated Americas region rose 2 percent for the quarter that ended April 1, more than the 1.8 percent gain analysts expected, according to Consensus Metrix. Increased spending per visit drove the same-store sales rise, however, since customer visits, referred to as traffic, were flat for the quarter.
The United States is Starbucks' largest market with more than 14,000 stores.
Same-store sales in China, the fast-growing market where Starbucks expects to one day have more cafes than in the United States, were up 4 percent for the quarter. Starbucks has 3,200 cafes in mainland China.
Total revenue rose almost 14 percent to $6.0 billion.
Starbucks' quarterly net income was $660.1 million, or 47 cents per share, compared with $652.8 million, or 45 cents per share, a year ago. Excluding items, profit of 53 cents a share matched expectations.
The company said its board authorized buying back 100 million shares, which is worth more than $5 billion at current prices.
The results come as Starbucks is working to limit or avoid reputational damage from the arrests of two black men in a Philadelphia cafe two weeks ago. A bystander video of the incident went viral, fuelling protests and calls to boycott the chain.
Starbucks apologised for the incident, which was set in motion when a manager called police to report the two men who were waiting for a friend and had not made purchases. It plans to close 8,000 company-owned cafes on the afternoon of May 29 for racial tolerance training.
(Reporting by Lisa Baertlein in Los Angeles; Editing by Nick Zieminski)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Apr 27 2018 | 2:43 AM IST

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