Starbucks announced lower-than-expected quarterly earnings Tuesday but insisted the numbers do not reflect what the US coffee chain giant called progress in a business turnaround plan.
Third quarter revenue fell 3.8 percent to $9.46 billion, it said.
Because of higher operational costs, profits plummeted 47 percent to $558.3 million — far below the $732 million that market analysts had expected.
“While our financial results for the quarter don’t yet reflect all the progress we’ve made, I see meaningful signs from across our US business that we’re on the right path,” Brian Niccol, CEO for the past 10 months, said in a call with analysts.
Starbucks chief financial officer Cathy Smith said the company is making inroads.
“We are making tangible progress in our ‘Back to Starbucks’ strategy,” she said in a statement.
Smith said a tax charge had shaved 11 cents off earnings per share, leaving it at 49 cents.
Same store sales fell two percent in North America.
They were stable worldwide but rose two percent in China due to an increase in the number of store transactions, although the cost of the average customer order fell four percent.
“We are clearly in the early stages of our turnaround in the US, but our work is gaining momentum in our international business,” said Niccol.
New products designed to satisfy consumers over the course of the day and not just at breakfast will be launched this year and next, Niccol said.
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© Agence France-Presse
