Starbucks Revenues Rise But Stocks Fall

Despite posting positive revenue figures, shares in Starbucks slid last week as the market reacted negatively to static projections.

Arguably the most recognisable coffee chain in the world, the company said that its revenue rose by an impressive 12% in its first fiscal quarter to a staggering $5.37 billion.

This was roughly in line with forecasts that had predicted revenue of $5.39 billion.

Profit for this period totalled $687, which although high represented a 30% drop compared to last year.

However, for the current quarter, the company stated that it expects to make around 39c per share – down from 46c per share the Christmas quarter – in adjusted earnings.

Wall Street obviously expected more and as a result, Starbucks’ shares fell 3.5%.

The worldwide coffee chain’s impressive growth this quarter was fuelled by a general increase in customer numbers. Sales in the Americas rose by 9% while sales in the Asia Pacific and Chinese markets rose by 5%.

However, many analysts believed that Starbucks would post better results for its Far East operations. This lead to some speculation about the group’s long-term prospects in the region, as a slowing economy has evidently stunted growth, but CEO Howard Schultz confirmed his commitment to the area: “I’m convinced Starbucks is just getting started. China is here to stay,” he said.

Starbucks aims to have around 2,400 stores in China by 2019.

The festive period certainly helped (Ed: But don’t mention red cups!) as a record $1.9 billion was loaded onto Starbucks Gift Cards in Canada and the United States. According to research, one in six American adults received a mermaid branded card over the holidays.

Another area of impressive growth for the Seattle-based chain is its domestic sales.

The leader in this area was the sale of K-Cups, those single-serve pods made popular by Keurig and other machine manufacturers.