Starbucks Profit Tops View, But Outlook Weak - Update

(RTTNews) - Starbucks Corp. (SBUX), the world's largest specialty coffee retailer, Thursday reported a drop in profit for the first quarter, as last year's bottom line was buoyed by a hefty gain. Earnings, on an adjusted basis, trumped analysts' estimates by a penny.

Revenue for the quarter increased almost 12 percent from a year ago, but still fell short of Walls Street estimates.

Seattle, Washington-based Starbucks first-quarter profit dropped to $687.6 million or $0.46 per share from $983.1 million or $0.65 per share for the year-ago quarter.

Excluding one-time items, adjusted earnings for the quarter rose to $0.46 per share from $0.40 per share last year. On average, 24 analysts polled by Thomson Reuters expected earnings of $0.45 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter rose 11.9 percent to $5.37 billion from $4.80 billion last year, driven by increased traffic at its established locations as well as revenue from new store openings. Twenty analysts had a consensus revenue estimate of $5.39 billion for the quarter.

Global comparable store sales increased 8 percent, including a 4 percent increase in traffic. Americas comp store sales increased 9, while China/Asia Pacific comp store sales rose 5 percent and EMEA comp store sales increased 1 percent.

Starbucks, which has been expanding its offerings from coffee to include more food. opened 528 net new stores in the quarter globally, including a record 281 stores in China/Asia Pacific and a 79 stores in EMEA.

During the 2015 holiday period, Starbucks said $1.9 billion was loaded onto gift cards in the U.S. and Canada.

Looking forward to the second quarter, the company expects adjusted earnings of $0.38 to $0.39 per share. Analysts currently estimate earnings of $0.40 per share for the quarter.

For the full year 2016, the company continues to expect adjusted earnings of $1.87 to $1.89 per share. Analysts currently estimate earnings of $1.89 per share for 2016.

SBUX closed Thursday's trading at $59.03, up $2.11 or 3.71%, on the Nasdaq. The stock, however, dropped $2.40 or 4.07% in the after-hours trading.