Starbucks says key sales figure grew only modestly in US

Associated Press

SEATTLE — Starbucks says a key sales figure rose only modestly in the U.S. during the latest quarter, as it struggles to find drinks other than the Frappuccino to attract customers.

The coffee chain says sales grew 1 percent at established U.S. locations. That reflected people spending more per visit, which offset a decline in the number of transactions. Starbucks has blamed health concerns for slipping Frappuccino sales, though analysts have cited increased competition for the decline. The company has said it’s working on attracting customers in the afternoon with teas and other drinks that don’t have as much sugar.

Starbucks also said temporary store closures for anti-bias training in May weighed on its sales performance, depressing comparable-store sales by less than half a percent. The training was organized after a Starbucks employee at a Philadelphia store called police on two black men who came into the store, resulting in their arrest.

In China, Starbucks said the key sales figure declined 2 percent in the quarter. Starbucks cited competition in the country.

The company said it expects its full-year sales growth to be “just below” its previous target of 3 to 5 percent.

For the quarter, the company reported a net income on Thursday of $852.5 million. On a per-share basis, the Seattle-based company said it had profit of 61 cents. Earnings, adjusted for non-recurring costs, came to 62 cents per share.

The results topped Wall Street expectations. The average estimate of 12 analysts surveyed by Zacks Investment Research was for earnings of 60 cents per share.

The coffee chain posted revenue of $6.31 billion in the period, also exceeding Street forecasts. Eight analysts surveyed by Zacks expected $6.26 billion.

Starbucks expects full-year earnings in the range of $2.40 to $2.42 per share.

Starbucks shares have declined 10 percent since the beginning of the year, while the Standard & Poor’s 500 index has increased 6 percent. After the results were released Thursday, the shares rose 0.6 percent to $51.76.