Starbucks Posts In-Line Q4 Earnings, But Issues Weak Forecast

Shares of Starbucks Corporation SBUX dropped 3 percent in after-hours trading after the company issued a weak earnings forecast for its first quarter. However, the company reported in-line earnings for its fiscal fourth quarter. For the holiday quarter, the company expects adjusted earnings of $0.44 to $0.45 per share, versus analysts' estimates of $0.47 per share. Starbucks projects FY16 earnings of $1.87 to $1.89 per share, versus analysts' expectations of $1.88 per share. The Seattle, Washington-based company reported a quarterly profit of $652.5 million, or $0.43 per share, versus a year-ago profit of $587.9 million, or $0.39 per share. Its revenue climbed 18 percent to $4.91 billion. However, analysts were expecting earnings of $0.43 per share on revenue of $4.9 billion. The average estimate among 261 Estimize users was for earnings of $0.45 per share on revenue of $4.91 billion. For the quarter, the company's global comparable store sales climbed 8 percent, while same-store customer traffic rose 4 percent. Same-store sales in the company's China and Asia Pacific business surged 6 percent, while Americas comparable sales jumped 8 percent. Its operating income climbed 13 percent to $969.4 million for the quarter, while operating margin shrank 70 basis points to 19.7 percent. Starbucks' board also raised its quarterly dividend by 25 percent to $0.20 per share. "Starbucks performance in Q4 reflected a continuation of the pattern of accelerating momentum we saw with each successive quarter of fiscal 2015," said Scott Maw, Starbucks CFO. "And our Q4 results are particularly gratifying in that they were achieved despite the increase, and acceleration, of the significant partner and digital investments we are making to drive sustained, profitable growth around the world and into the future," Maw added. Starbucks shares fell 3.04 percent to $60.60 in the after-hours trading session.