Even the coffee giant, that purveyor of caffeinated craving, is not immune to the vagaries of macroeconomics.
Starbucks, as noted by Forbes Magazine, said Thursday that it has seen underperformance to the effect that it has decided to close its Teavana chain of stores. That announcement came amid Starbucks earnings news, which saw a miss, as evidenced by the top line, where $5.66 billion in revenues is a bit less than the $5.75 billion Wall Street had expected. Net income slipped 8.9 percent in the latest quarter from last year, and yet managed at $0.55 a share to hit expectations.
Starbucks faces some of the same economic pressures that peers in other retail industries face, with same-store sales up 4 percent, which was below the 4.8 percent that had been projected by Wall Street. Within that number, said the company, the flagship eponymous stores were up 5 percent, and Reuters said that number reversed about three-quarters of declines. That positive performance came as Starbucks had revamped its loyalty program to take into account the dollars spent on purchases rather than the number of purchases they made.
One upshot: shuttering the 379 Teavana retail stores extant in the company’s portfolio. The locations are primarily within malls, with continued trends likely to last that are underwhelming. The closures of the Teavana locations are slated for the spring of next year, and employees will have the option to re-apply for positions at Starbucks locations. There are 3,300 employees at the Teavana stores. The company is still hewing to its guidance of creating 65,000 stores through the next five years.
Separately, Reuters said that the company is cutting SBUX earnings per share forecasts from $1.96 to $1.97, which is, in turn, down from $2.06 to $2.10.