Same-Store Starbucks Sales Slow, But Mobile Pay Sees A Q1 Jump


In the end, things may have been too hot not to cool down, at least in Starbucks stores.

In quarterly results that met the Street on the bottom line, missed on the top and showed slowing same-store sales growth, it was the latter metric that sent Starbucks shares down 3.5 percent after-hours.

All told, earnings were $0.52 a share, meeting expectations, and sales were $5.7 billion, with $5.8 billion expected.

In the quarter that ended in December, the firm posted same-store sales growth of 3 percent, and that was a far cry from analyst projections that this metric would grow by 3.8 percent. Digging deeper into the results, the same-store numbers were mixed by region, with APAC sales up 5 percent and EMEA down 1 percent, where that unit had been expected by analysts to see growth.

And yet, the same-store sales had a bright spot of sorts, at least in the United States. Management noted on the call that, for example, there was 3 percent growth in the Americas on a same-store basis, as mobile pay gained traction. Mobile order and pay was 7 percent of sales in the quarter in the U.S., double that of a year ago, and 27 percent of all transactions.

Incoming Chief Executive Officer Kevin Johnson said that the growth in mobile payments had a residual effect as there had been a crush at the counter where drinks and food are typically given to customers. The crowding at the point of pickup, said the executive, may have dissuaded other customers from waiting in the store to buy items. Current CEO Howard Schultz told analysts that the “nature of [this problem], too much demand, is an operational challenge we have solved before, and I can assure you we will solve again.”

As for the card business, consumers added $2.1 billion to cards across North America. There were 13 million active participants in the Rewards program, which came to 16 percent gains year over year.

Turning toward guidance, the firm is looking for revenue growth of 8–10 percent in the current fiscal year. Longer-term goals include top-line growth of 10 percent.