Starbucks' growth cooled in latest quarter

Thu Jan 23, 2014 5:13pm EST
 
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By Lisa Baertlein

(Reuters) - Starbucks Corp (SBUX.O: Quote) on Thursday reported that sales at established stores in its U.S.-dominated Americas region cooled more than analysts expected in its latest quarter as consumers spent more time holiday shopping online than at physical stores.

Nevertheless, the world's biggest coffee chain boosted its fiscal 2014 earnings per share forecast to a range of $2.59 to $2.67, from $2.55 to $2.65 previously, sending shares up 0.9 percent to $74.02 in after-hours trade.

Global sales at Starbucks cafes open at least 13 months were up 5 percent, versus analysts' average estimate for a 5.9 percent rise, according to Consensus Metrix. That figure included a 5 percent increase for the Americas region that contributes the lion's share of Starbucks revenue. Analysts, on average, expected a 6.4 percent rise from the region.

Last fiscal year, Starbucks' Americas region sales at restaurants open at least 13 months were up 8 percent in the fourth quarter and up 9 percent in the third quarter.

"It's hard to really be too critical, especially when you compare what we've seen and what we're about to see in the coming weeks," Edward Jones analyst Jack Russo said, referring to the recent spate of disappointing earnings reports and profit warnings from restaurants and retailers.

Those included McDonald's Corp (MCD.N: Quote), which earlier on Thursday reported a steeper-than-expected drop in December sales at established restaurants in the United States and put some of the blame on frigid winter weather.

"Growth is hard to find," Russo said.

SHIFT TO ONLINE SHOPPING   Continued...

 
Branded packaging is seen in Starbucks' Vigo Street branch in Mayfair, central London January 11, 2013. REUTERS/Stefan Wermuth