By Lisa Baertlein
Jan 23 (Reuters) - Starbucks Corp on Thursday reported that sales at established stores in its U.S.-dominated Americas region cooled more than analysts expected in its latest quarter as consumers spent more time holiday shopping online than at physical stores.
Nevertheless, the world’s biggest coffee chain boosted its fiscal 2014 earnings per share forecast to a range of $2.59 to $2.67, from $2.55 to $2.65 previously, sending shares up 0.9 percent to $74.02 in after-hours trade.
Global sales at Starbucks cafes open at least 13 months were up 5 percent, versus analysts’ average estimate for a 5.9 percent rise, according to Consensus Metrix. That figure included a 5 percent increase for the Americas region that contributes the lion’s share of Starbucks revenue. Analysts, on average, expected a 6.4 percent rise from the region.
Last fiscal year, Starbucks’ Americas region sales at restaurants open at least 13 months were up 8 percent in the fourth quarter and up 9 percent in the third quarter.
“It’s hard to really be too critical, especially when you compare what we’ve seen and what we’re about to see in the coming weeks,” Edward Jones analyst Jack Russo said, referring to the recent spate of disappointing earnings reports and profit warnings from restaurants and retailers.
Those included McDonald’s Corp, which earlier on Thursday reported a steeper-than-expected drop in December sales at established restaurants in the United States and put some of the blame on frigid winter weather.
“Growth is hard to find,” Russo said.
Expectations had been muted ahead of the release of Starbucks’ results, in part because the Seattle company has been on a growth tear that many analysts said could not go on forever.
“Holiday 2013 was the first in which many traditional brick and mortar retailers experienced in-store foot traffic give way to online shopping in a major way,” Starbucks President and Chief Executive Howard Schultz said in a statement.
Data firm ShopperTrak last week said U.S. shopper traffic fell 14.6 percent during the holiday season.
Starbucks’ net earnings increased 25 percent to $540.7 million, or 71 cents per share, for the fiscal first quarter ended on Dec. 29.
Excluding a litigation credit of 2 cents a share, Starbucks’ profit matched Wall Street’s average estimate of 69 cents per share, according to Thomson Reuters I/B/E/S.
There has been a growing concern among analysts that the U.S. roll-out of pastries from La Boulange, a San Francisco-area bakery Starbucks bought in 2012, has slowed service because workers are taking the time to warm up baked goods.
La Boulange products are sold in half of Starbucks’ company-operated stores in the United States, which works out to about 3,500 stores.
Chief Financial Officer Troy Alstead told Reuters that Starbucks has added staff and revamped workers’ duties to accommodate the additional labor.
“There may be a perception that there is a slowdown, but when we measure it, there is no change,” Alstead told Reuters.
Starbucks is one of the best-performing companies in the restaurant category and its shares have run up more than 30 percent in 12 months.