Starbucks shares dropped 4 percent in after-hours trading after itreported sales growth that missed analysts' expectations on Thursday.
The coffee chain said it saw global same-store sales increase by 4 percent during the quarter, below Wall Street expectations of 5.7 percent, according to FactSet. The company saw lackluster sales growth across all regions.
Starbucks saw comparable store sales increase by 4 percent in the Americas region, 3 percent in the China/Asia Pacific region and decrease by 1 percent in the Europe/Middle East/Africa region. Analysts had expected sales growth of 6.2 percent in the Americas, 4.6 percent in China/Asia Pacific, and 2.8 percent in Europe/Middle East/Africa.
CEO Howard Schultz said that the company has a "clear line of sight to returning our U.S. business to historic levels of comp sales growth which had been at or above 5% for the 25 consecutive quarters prior to Q3."
Starbucks posted third-quarter earnings per share of 49 cents on $5.24 billion in revenue. Analysts expected the coffee chain to post earnings of 49 cents a share on $5.33 billion in revenue, according to a consensus estimate from Thomson Reuters.
The Seattle-based company said that its loyalty program grew 18 percent year-over-year to 12.3 million active members in the United States.
The coffee chain said it still sees adjusted full-year earnings of $1.88 to $1.89 a share. For the current quarter, Starbucks said it expects adjusted earnings between 54 cents and 55 cents a share.
Starbucks also slightly lowered its sales forecast and said it now expects full-year sales growth to rise at a mid-single digit percentage rate. Starbucks previously expected full-year sales growth to come in somewhat above the mid-single digits.
Last week, Starbucks said it will raise the wages of workers at its company-operated U.S. locations this fall, following accusations of cutting employee hours. Schultz said that workers can expect at least a 5 percent base pay increase, effective Oct. 3.
The coffee chain recently raised the price of its beverages. Shoppers now drop another 10 cents to 20 cents for each espresso beverage; tea latte prices increased by 10 cents to 30 cents each. The company said it expects the price of an average order to increase by about 1 percent as a result of the price hikes.
By: Christine Wang (CNBC).
Photo: Investopedia.
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