- Starbucks reported earnings that beat Wall Street's expectations on Thursday, yet the stock slumped nearly 4% after-hours.
- The chain brought in $0.65 per share on revenues of $6.1 billion. Analysts had expected $0.57 per share on revenues of $6.204 billion.
Shares of Starbucks slumped as much as 4% after-hours following the company's first quarter earnings report that beat analysts' earnings-per-share expectations but fell short on revenue.
The coffee giant said it earned an adjusted $0.65 per share — 14% above the expected $0.57 — on revenues of $6.073 billion. Analysts had expected $6.2 billion.
"Starbucks reported another quarter of record financial results in Q1 of fiscal 2018, with consolidated revenues up 6% over last year - up 7% excluding 1% for the impact of streamlining activities in the quarter. China grew revenues 30% in Q1, with the strategic acquisition of East China positioning us to accelerate our growth in the key China market,” said CEO Kevin Johnson in a press release.
"Today, Starbucks has two powerful, independent but complementary engines driving our global growth, the U.S. and China. Our work to streamline the company is sharpening our focus on our core operating priorities."
Same-store sales, a metric that Wall Street is paying careful attention to as the 27,000+ store chain nears maximum expansion in the US, was up 2%. The company had forecast 3-5% growth this year.
“Starbucks beat on earnings per share, which is great, but they missed on topline revenue and on same store sales in the US. and in Europe – a bad sign and that’s why the stock is down right now," TD Ameritrade chief market strategist JJ Kinahan told Business Insider. "Missing on topline revenue and on same store sales overall in this type of healthy economy is very difficult to overcome right now –in this type of growing economy, you cannot miss.”
Starbucks is now looking to other areas outside the US for continued growth, specifically China.
"We are laser-focused on accelerating growth in China and driving improvement across the U.S. business as we move into and through the back half of the year," CFO Scott Maw said in a press release.
Wall Street analysts remain bullish on the stock, and have a consensus price target of $64 — 6% above where shares opened Thursday.
Shares of Starbucks have severely lagged behind the S&P 500 benchmark in the past year, rising just 3.6% compared to the index's 23%.
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