Starbucks’ Profit Heats Up While Sales Cool Down
Starbucks (NASDAQ:SBUX) released its first-quarter earnings after the bell Thursday, coming off a year that CEO Howard Schultz has described as “by far the best in Starbucks’ 42-year history.” Investors, analysts, and consumers have been anxious to see how the world’s largest coffee chain performed in the first-quarter of 2014, and these first figures are expected to help dictate how Starbucks will perform throughout the rest of the year and whether 2014 will be even more successful for the chain than 2013 turned out to be.
According to its financial release, Starbucks’ first-quarter profit rose 25 percent to $540.7 million, or 71 cents a share, from $432.2 million, or 57 cents a share, from the year-ago quarter. Its revenue for the quarter that ended December 29, 2013 followed that trend, rising 12 percent to $4.24 billion from $3.79 billion last year. In addition, Starbucks’ comparable-store sales — considered a good indicator of a company’s health — grew 5 percent in the Americas and 5 percent globally, driven by a 4-percent increase in traffic.
Though Starbucks’ earnings of 71 cents per share beat analysts’ expectations, its revenue of $4.24 billion missed estimates of $4.29 billion. Wall Street analysts also expected global same-store sales to advance 5.9 percent, while they only rose 5 percent. Starbucks shares initially fell more than 2 percent in after-hours trading following the release, but had bounced back as of 4:30 p.m., sitting down 0.29 percent at $73.39.