Starbucks reports record revenue in its first quarter results but share price tumbles
Starbucks share price plummeted 4.55 per cent to $56.28 after markets closed when it revealed its first quarter trading figures for 2016.
Net revenue was a record $5.37bn (£3.78bn), up 12 per cent from 2015.
Net profits fell however, to $687.6m, from $983m the year before.
Profits before tax fell 19.2 per cent to $1bn, from $1.3bn.
Earnings per share were $0.46 a share, down 29 per cent from $0.65 a share.
Analysts on Thomson Reuters were expecting Starbucks to post earnings of 45 cents per share on $5.39bn in revenue
Why it's interesting
The chain's comparable store sales, a key measure of success, increased eight per cent for the quarter, beating estimates of 6.9 per cent.
Like-for-like sales in America rose nine per cent, ahead of expectations of 7.2 per cent.
However, sales in China and Asia disappointed, growing by five per cent, which was less than expected. Revenues in the region were boosted, up 32 per cent to $654m, by the acquisition of Starbucks Japan.
Europe's sales also missed the mark, as revenue fell six per cent to $313m. Starbucks said the decrease was due "to unfavourable foreign currency translation and the shift in the portfolio towards more licensed stores".
What Starbucks said
Scott Maw, Starbucks chief financial officer, said: “We’ve entered fiscal 2016 with another record-breaking quarter and a continuation of the accelerating momentum we saw in our business throughout 2015. The investments we are making in our people and our business are driving record, industry leading operating and financial performance and consistently strong comp growth, and are both paying off today and setting us up for continued strong performance into the future.”
Starbucks stock is still outperforming the market, so this may be a blip.