Starbucks’ profit jumps but sales growth slows
NEW YORK (AP) — Starbucks says its quarterly profit rose by 25 percent as it benefited from lower coffee costs and stronger sales around the world.
The Seattle-based coffee company says global sales rose 5 percent 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 last three months of the year was the result of the growing number of people who are choosing to shop online from the convenience of their homes, instead of 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 he 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.
For the quarter, sales at established locations rose 5 percent 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 percent.
The company has about 20,000 locations around the world.
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.
Shares of Starbucks were up 85 cents at $74.24.