Friday, July 28, 2017
Starbucks tempers expectations, says it's closing all of its Teavana stores
(Reuters) - Starbucks Corp on Thursday reported quarterly profit that matched analysts' estimates, but tempered expectations for the current quarter amid softness in the U.S. retail and restaurant industries, and said it would close all 379 of its Teavana stores.
The company's shares rose slightly in late trade to $59.60.
The results landed just hours after Starbucks announced plans to buy the remaining 50 percent share of its East China business from its joint venture partners for about $1.3 billion, in its biggest ever acquisition.
Net income fell to $691.6 million, or 47 cents per share, for the third quarter ended July 2. That was down from $754.1 million, or 51 cents per share, a year ago.
Starbucks had a profit of 55 cents per share, excluding items, which matched analysts' average estimate as complied by Thomson Reuters I/B/E/S.
U.S. restaurants are locked in a bitter fight for market share, battling new competition from non-traditional rivals such as meal kit sellers and convenience stores.
Sales at its mainstay U.S. cafes open at least 13 months rose 5 percent in the latest quarter. Traffic turned slightly positive, reversing three straight quarters of declines that the company attributed in part to changing its loyalty program to focus on dollars spent rather than the number of purchases they make.
Same-store sales from China were up a robust 7 percent in the latest quarter.
(Reporting by Lisa Baertlein in Los Angeles; Editing by Bernard Orr)