Starbucks sales and profit forecast disappoint

NEW YORK: Starbucks Corp cut its profit forecast and posted disappointing quarterly results, amid a bitter battle with competitors ranging from boutique coffee seller Intelligentsia to lower-price rivals like McDonald’s. Investors, long used to Starbucks exceeding investor expectations, sent shares down 7.3 per cent to $50.85 in after-hours trade.
The Seattle-based coffee chain said it now sees long-term earnings per share growth of 12 per cent or greater, versus its prior call for growth of 15 per cent to 20 per cent.
Fourth-quarter revenue missed Wall Street’s target after sales at established global cafes gained 2 per cent, less than analysts’ average target of 3.2 per cent, according to Consensus Metrix. Hurricanes Harvey and Irma battered same-store sales at more than 1,100 US cafes. Sales at mainstay US cafes were down 2 per cent for the quarter that ended October 1, excluding the hurricane impacts, they would have been up 3 per cent — still just short of analysts’ estimate. — Reuters