Sunday, November 23rd1.1°C
24188
23988

Starbucks reports higher profit but growth slows; lower coffee costs boost results

NEW YORK, N.Y. - Starbucks says its quarterly profit rose by 25 per cent as it benefited from lower coffee costs and stronger sales around the world.

The Seattle-based coffee company says global sales rose 5 per cent at established locations. That was slower than the increase in the previous quarter, however, and total sales were shy of Wall Street expectations.

Troy Alstead, the company's chief financial officer, said in a phone interview that the slower growth for the final three months of the year was the result of the shift toward online shopping during the holiday shopping season, rather than heading out to stores.

"The impact to us is that there are fewer people out and about in the weeks leading up to Christmas," Alstead said.

But in a conference call with analysts, CEO Howard Schultz downplayed the impact that trend would have on sales growth going forward, saying that the advantage of Starbucks is that its offerings can't be replicated online and that its loyalty card business is growing.

Starbucks in the meantime has been employing a variety of strategies to drive up sales at its ubiquitous cafes, such as revamping its sandwiches and baked goods so people are more likely to get something to eat when they come in for a drink. Alstead said during the call that croissant sales doubled at locations where new recipes were rolled out.

New options such as boxed salads are intended to get people to visit throughout the day, not just during the morning rush hour.

Starbucks, which has about 20,000 locations around the world, is also eyeing a new front: tea. The company last year opened its first tea cafe in New York City, saying it plans to popularize tea culture in the U.S. the way it did with coffee culture.

For the quarter, sales at established locations rose 5 per cent in both the U.S. and the region encompassing Europe, where Starbucks had been struggling.

In the China and Asia Pacific region, the figure rose 8 per cent.

For the three months ended Dec. 29, it earned $540.7 million, or 71 cents per share. That was more than the 69 cents per share analysts expected.

A year ago, it earned $432.2 million, or 57 cents per share.

Revenue rose to $4.24 billion, shy of the $4.3 billion Wall Street expected.

The company stood by its guidance of for sales at established locations to grow in the mid-single digits globally in the year ahead. Earnings per share are expected to be in the range of $2.59 to $2.67, up from the previous $2.55 to $2.65.

Shares of Starbucks edged up 38 cents to $73.77.

The Canadian Press


Read more Business News

23872


Recent Trending




Today's Market
S&P TSX15111.13+35.95
S&P CDNX789.135.56
DJIA17810.0691.06
Nasdaq4712.97+11.102
S&P 5002063.50+10.75
CDN Dollar0.8903+0.0006
Gold1197.70+10.60
Oil76.51+0.87
Lumber331.00+4.50
Natural Gas4.266-0.253

 
Okanagan Companies
Pacific Safety0.155-0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.30+0.03
Cantex0.04+0.005
Anavex Life Sciences0.178+0.008
Metalex Ventures0.03+0.005
Russel Metals31.62+0.82
Copper Mountain Mining2.24+0.06
Colorado Resources0.125-0.015
ReliaBrand Inc0.013-0.002
Sunrise Resources Ltd0.050.00
Mission Ready Services0.35+0.015

 
24130


22970

FEATURED Property
21305633472 Camelback Drive
3 bedrooms 3 baths
$475,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


What I learned in China: Part 2

As per my previous article on my visit to China, we have much to learn about and from their people. It is potentially the largest market on earth with 1.3 billion people in one country but much will d...


Retirement: Health Issues

Our health is really our greatest asset and maintaining our health is of tremendous importance. You want to do what you can to ensure that health issues will not jeopardize the enjoyment of your retir...


Be quiet already!

No, you’re not crazy. There really are voices in your head. Voices that keep you from doing what you need to do during your customer care calls. It can be the voice of your teachers, your parent...

_



24156

24207


Member of BC Press Council


22707