Starbucks inventory slides CEO Brian Nicole calls revenue “disappointing”
Starbucks (swub) After the coffee giant, stocks fell 5.7% on Wednesday Second Quarter Revenue Report Disappointed Wall Street and Shadows the CEO’s plan to turn the company around.
Comparable US store sales — closely monitored indicators including results for stores that have been open for more than a year — have fallen for the fifth consecutive year, with 2% sinking as consumers sought cheaper alternatives from rivals like Dunkin and McDonald’s.MCD). Wall Street analysts were hoping for a more modest 0.3% decline in Tuesday’s results.
The sale of Starbucks’ slump store is a result of fewer customers visiting the store to buy drinks, but stores still spend more money frequently. Transactions fell 4% from the previous year, but in the US, average ticket size, or the amount of dollars spent on each transaction, rose 3%.
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Investors are also focusing on the company’s outcome in China after a quarter consecutive sales declined with comparable sales as competition intensifies domestically.
In China, more customers visited Starbucks, but they spent less money. Equivalent sales in China were flat in the second quarter as Starbucks’ 4% increase in transactions was offset by a 4% decrease in ticket size. Analysts had expected China sales to fall by more than 2% in the same store.
Other important statistics were also disappointing. The coffee chain reported revenue per share of $0.41 for the quarter ending March 30, according to Bloomberg data. Revenue of $8.76 billion fell short of the expected $8.83 billion.
Over the past year, Strbucks shares have fallen by around 9.5% compared to a 10.6% rise in the S&P 500.
For each Bloomberg, the company reported an adjusted operating margin of less than 8.2% (percent of revenue remaining after operating expenses) that analysts were less than the expected 9.5%.
Coffee chain profits fell more than 50% from the previous year to $384 million in March.
Starbucks CEO Brian Nicole admitted the downbeat outcome, saying “our second quarter results are disappointing,” but added, “behind the scenes, we’ve made a lot of progress and have real momentum with our “back-and-coming Starbucks” plan.”
“My optimism has transformed me into confidence that our BucStarbucks plan is the right strategy to turn our business around and unlock opportunities ahead,” he said.
After joining the company from Chipotle (CMG)Last fall heavy Pay for the package and Controversial advantageNicole Move Starbucks turnaround plan Considering that the coffee giant has had flounder in recent years both in the US and overseas.
