Saturday, December 20th1.0°C
24563
23979

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

24387


Recent Trending




Today's Market
S&P TSX14468.26+121.51
S&P CDNX676.54+11.04
DJIA17804.8026.65
Nasdaq4765.38+16.983
S&P 5002070.65+9.42
CDN Dollar0.8618+0.0001
Gold1197.20+2.50
Oil56.50+2.39
Lumber336.20-0.70
Natural Gas3.446-0.196

 
Okanagan Companies
Pacific Safety0.12-0.01
Knighthawk0.01-0.005
QHR Technologies Inc1.25-0.03
Cantex0.03-0.005
Anavex Life Sciences0.1726+0.0026
Metalex Ventures0.05-0.005
Russel Metals25.58-0.42
Copper Mountain Mining1.55-0.02
Colorado Resources0.120.00
ReliaBrand Inc0.011-0.0089
Sunrise Resources Ltd0.05-0.005
Mission Ready Services0.215-0.01

 
23744


24588

FEATURED Property
2149022103-2205 Louie Drive
2 bedrooms 2 baths
$309,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


My final thoughts on real estate

This will be the last column I write on real estate. Largely because at the end of the year I will be handing in my license. After 20+ years of working in land development, resort development and rea...


Reflecting on the end of the year

The importance of the end of the year and the Christmas holidays is profound. It is a time to reconnect with family and traditions that have made us who we are. But the year-end has always been a time...


Parenthood: Estates, insurance & taxes

It is now even more important to ensure your loved ones are well looked if anything should happen to you. Here are a few topics to consider helping you prepare for some of the unexpected events that c...

_





24476


Member of BC Press Council


23546