Starbucks shares rise after earnings beat
Despite beating analysts' earnings expectations for the fiscal fourth-quarter, Starbucks (SBUX) still faces a same-store sales growth issue.
The company reported adjusted earnings of 56 cents a share on $5.71 billion in revenue. Wall Street had expected Starbucks to report earnings of about 55 cents a share on $5.68 billion in revenue, according to a consensus estimate from Thomson Reuters.
In the year-ago period, Starbucks earned 43 cents a share on revenue of $4.92 billion revenue.
But the coffee chain posted global same-store-sales growth of 4 percent, falling short of forecasts of 4.9 percent, according to StreetAccount.
Same-store sales in the Americas and China beat expectations, rising 5 percent and 6 percent respectively. Analysts had anticipated growth of 4.9 percent in the Americas and 5.5 percent in China.
U.S. same-store sales, however, were the key metric for Starbucks this quarter. The company reported same-store-sales growth of exactly 4 percent in the U.S.
The company cited a 1 percent decrease in traffic for the lower-than-expected same-store-sales growth in the U.S. However, average ticket price increased by 6 percent, buoying sales.
Shares initially rose during aftermarket trading on Thursday, jumping as much as 6 percent, before trading just under 1 percent higher.
Mark Kalinowski, a Nomura analyst, said that buy-side analysts expected that if Starbucks reported only 4 percent growth in U.S. same-store sales it could send the stock plummeting by $3 or $4.
The company's stock has been battered by poor earnings and an industry-wide slowdown in sales in recent quarters, sending shares down more than 13 percent year to date. On Thursday, the stock traded at a new 52-week low of $51.77.
"Starbucks record Q4 and fiscal 2016 financial and operating results in the face of ongoing economic, consumer and geopolitical headwinds, and the significant investments we continue to make in our people and our business, once again demonstrate the power, relevance and resilience of the Starbucks business and brand," Howard Schultz, Starbucks chairman and CEO, said in a statement.
The board also approved a quarterly dividend of 25 cents per share, a 25 percent increase.
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