A store of the Starbucks coffee shop chain in Amsterdam city center with people sitting inside, enjoying a coffee after shopping in the cafe, while others walk by.
Nicholas Economo | norphoto Getty Images
Starbucks Lower-than-expected quarterly revenue and earnings were reported on Tuesday, due to a surprise drop in same-store sales.
“In an extremely challenging environment, this quarter’s results do not reflect the strength of our brand, our capabilities or the opportunities ahead,” CEO Laxman Narasimhan said in a statement. “It did not meet our expectations, but we immediately understand the specific challenges and opportunities that lie ahead.”
The company’s shares fell 10 percent in extended trading.
what is here The company reported Compared to Wall Street expectations based on LSEG’s survey of analysts:
- Earnings per share: 68 cents adjusted vs. 79 cents expected
- Revenue: $8.56 billion vs. $9.13 billion expected
The coffee giant reported company-attributable net income of $772.4 million, or 68 cents per share, for the fiscal second quarter, down from $908.3 million, or 79 cents per share, a year earlier.
Net sales It fell nearly 2 percent to $8.56 billion. The company’s same-store sales fell 4% as its cafe traffic fell 6% in the quarter. Wall Street was expecting same-store sales to rise 1 percent, according to StreetAccount estimates.
Across all regions, Starbucks reported lower same-store sales and lower traffic.
In the U.S., same-store sales fell 3 percent as traffic sank 7 percent. This marks the second quarter in which the company’s domestic market has struggled. Last quarter, executives blamed sluggish sales on boycotts targeting the company due to “misunderstandings” of its stance on Israel.
Starbucks’ international segment reported a 6% decline in same-store sales as both average tickets and transactions declined. In China, Starbucks’ second-largest market, same-store sales fell 11 percent, driven by an 8 percent drop in the average ticket.
McDonald’s, To Pepsi And other companies said this quarter that lower-income consumers have scaled back their spending and are looking for deals.
“While it was a challenging quarter, we learned from our underperformance and sharpened our focus with a comprehensive roadmap of well-thought-out initiatives that clearly define the path forward,” said CFO Rachel Ruggeri. said in a statement.
Starbucks said it would discuss its full-year financial outlook during the company’s conference call later Tuesday. Last quarter, it said it expected revenue growth of 7% to 10%, global same-store sales growth in the range of 4% to 6% and earnings per share growth of 15% to 20%. does.
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