EUROPE proved to be Starbucks’ achilles heel yesterday with the global coffee chain reporting lower than expected second-quarter global sales after demand in the region fell.
Sales from cafes open at least 13 months fell one per cent in Europe, the Middle East and Africa (EMEA) during the quarter, far short of expectations amid a backdrop chief financial officer Troy Alstead conceded was “challenging”.
Despite the drop, the coffee chain reported a 19 per cent jump in net income to $309.9m, on total revenue up 15 per cent to $3.2bn for the first three months of the year. The profit surge was largely driven by China and Asia where sales rocketed 18 per cent, and the chain’s homeland the US where sales rose eight per cent.
Starbucks also raised its outlook for the year, saying it now expects earnings per share to be in the range of $1.81 and $1.84. It now plans to acclerate new store openings for the year to 1,000 from the 800 originally planned.
Starbucks’ shares fell 4.9 per cent to $57.68 in after-hours trading.