Starbucks quarterly revenue tops expectations

Markets Reuters

Starbucks Corp reported higher-than-expected quarterly revenue on Thursday as solid results from the U.S.-dominated Americas region bucked a trend of a broader restaurant slump and soothed concerns that intense competition would impact the world's best known coffee store.

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Starbucks gets the bulk of its sales from the United States, where it and other restaurant chains have been battling heady competition, unusually low grocery prices and anxiety over the rough and tumble U.S. presidential contest.

Shares of Starbucks were up 1.6 percent in late trade. Same-store sales in the U.S.-led Americas region, which produces the lion's share of Starbucks sales, rose 5 percent to match estimates from Consensus Metrix.

Edward Jones analyst Jack Russo said that the report was broadly in line with expectations, despite some early fears that the quarter would not match Wall Street targets.

Russo said the fiscal 2017 earnings guidance, which was below analysts consensus, showed Starbucks being careful in a tough economic and competitive environment.

"I think they are just playing cautious right now," he said.

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Chief Operating Officer Kevin Johnson told Reuters that sales at Starbucks cafes open at least 13 months accelerated a bit during the quarter, although traffic numbers were again down due to the company's recent change to its loyalty program that assigns rewards based on dollars spent rather than transactions.

Net income attributable to shareholders rose to $801 million, or 54 cents per share, in the fourth quarter ended Oct. 2, from $652.5 million, or 43 cents per share, a year ago.

Excluding items, the company earned 56 cents per share.

Total revenue rose to $5.71 billion from $4.91 billion, topping the average expectation of $5.68 billion, according to Thomson Reuters I/B/E/S.

Shares of the world's largest coffee chain were up 1.6 percent at $52.59 in after-hours trading.

(Reporting by Lisa Baertlein in Los Angeles and Arathy S Nair in Bengaluru; Editing by Bernard Orr and Saumyadeb Chakrabarty)