Starbucks' Same-Store Sales Fall Below 4% For First Time Since 2009

Shares of
Starbucks CorporationSBUX
were trading lower by around 4 percent Friday morning after the company's
and outlook failed to impress investors.

Report In Review

Starbucks reported that it earned $0.52 per share in the quarter on revenue of $5.73 billion versus analysts' expectations for an earnings per share of $0.52 on revenue of $5.85 billion.

Jason West
of Credit Suisse highlighted in a research report that beyond Starbucks' headline numbers, margins were "solid," but the company's
reported U.S. comps growth of 3 percent is concerning.

West continued that the weaker U.S. comps not only fell short of the consensus estimate of 4 percent but marks the fourth quarter in a row where the company missed this key metric as the U.S. retail business represents around 62 percent of the company's total profits.

SSS Below 4%

In fact, West noted that Starbucks' report on Thursday marks the first time since the fourth quarter of 2009 that the Americas same-store sales have fallen below the 4 percent mark.

West argued that Starbucks' poor U.S. comps reinforces his concerns that the company's sales and margin guidance will be challenging to achieve in the near term.

"We have also been hesitant to recommend the stock until we see more signs of stabilization in the SSS trajectory, which has yet to occur," West stated.

Other Concerning Areas

West also highlighted two other areas of concerns in the quarter including: 1) customers loaded $2.1 billion on Starbucks Cards, up 15-percent year-over but falling shy of the 19 percent growth over the last 12 months and 2) slowing breakfast sandwich sales.

Shares remain Neutral rated with a $55 price target which implies a 25x next 12 months P/E multiple, which is already a premium to the restaurant industry at approximately 21x.

At last check, shares of Starbucks were down 3.87 percent at $56.20.

Posted In: Jason WestStarbucksStarbucks CompsStarbucks EarningsStarbucks US CompsAnalyst ColorEarningsNewsGuidanceReiterationRestaurantsAnalyst RatingsMoversGeneral

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.