Starbucks Corp. (NASDAQ: SBUX) posted earnings after markets closed Thursday, and while the results were not breathtaking, the company did beat both earnings and revenues estimates for its first fiscal quarter. Same-store sales were up, and Starbucks opened 528 new stores.
Friday the company said it plans to close four of its Teavana stores, three in New York and one in Beverly Hills. The New York stores will be converted to Starbucks stores and the Beverly Hills store will be closed because it is adjacent to a Starbucks store.
Starbucks acquired Teavana in 2012 for $620 million in cash when the chain had about 300 North American stores. There are more than 350 retail locations today, and Teavana generated nearly $1 billion in sales in the United States. The company said the tea category is growing by double-digits in North America and that the Teavana business is “well on its way” to becoming a $3 billion business over the next five years.
In a statement Starbucks noted:
These changes to the Teavana specialty retail portfolio of more than 350 stores will allow the company to focus on new product innovation and elevating the Teavana tea experience through its Starbucks stores, reaching more customers with its expansive store footprint. Additionally, Teavana will focus on evolving a customized tea experience throughout specialty retail by bringing exotic blends, great flavors, wellness and innovation to customers globally.
If there was anything downbeat about the company’s Thursday report, it is that earnings per share were forecast just a bit weak, in a range of $0.38 to $0.39 against a consensus estimate of $0.39. Foreign exchange rates are expected to whack per-share earnings growth by 3%.
Starbucks stock traded up about 0.2% in the early afternoon Friday, at $59.16 in a 52-week range of $42.05 to $64.00.