Starbucks Corp. (NASDAQ: SBUX) reported fiscal third quarter 2017 results after markets closed Thursday. For the quarter, the coffee roaster and restaurant company posted adjusted diluted earnings per share (EPS) of $0.55 on revenues of $5.66 billion. In the same period a year ago, the company reported EPS of $0.49 on revenues of $5.24 billion. Third-quarter results compare to the Thomson Reuters consensus estimates for EPS of $0.55 and $5.75 billion in revenues.
U.S. same-store sales rose 5% and U.S. average ticket rose 4%. China/Asia-Pacific (CAP) same-store sales rose 1%.
Earlier today the company announced that it will pay $1.3 billion to joint-venture partners Uni-President Enterprises and President Chain Store Corp to buy the 50% of the East China Joint Venture that it does not already own. The move was greeted with approval by investors and pushed the shares up about 2.7% in Thursday’s regular session.
In its press release Starbucks said it will close all 379 of its Teavana stores over the coming year with most to be closed by Spring of next year. The closings were foreshadowed by comments on the underperformance of the Teavana mall stores made in the company’s second fiscal quarter press release.The 3,300 or so Teavana employees will have an opportunity to apply for available positions at Starbucks stores.
Company CEO Kevin Johnson said:
Starbucks leveraged food and beverage innovation, an elevated in-store experience and personalized digital connections to our customers to deliver another quarter of record financial and operating performance, despite the softness impacting our principal sectors overall. Continued focus on execution against our strategic priorities enabled us to gain share and positions us well for the future.”
CFO Scott Maw added:
Starbucks once again reported record operating and financial performance in Q3 – reflecting the back-half acceleration we’ve been anticipating. Nonetheless, despite posting record performance in Q3 and further extending our lead compared to the industry overall, the combination of trends in the quarter and ongoing macro pressures impacting the retail and restaurant sectors has us a bit more cautious going into Q4.
The company said it would update fourth-quarter and full-year financial targets on its conference call later this afternoon. Analysts are expecting Starbucks to post fourth-quarter EPS of $0.58 and revenues of $5.91 billion For the full year, analysts are looking for EPS of $2.10 and revenues of $22.71 billion.
Starbucks’ shares traded down about 0.2% in after-hours trading at $59.25 in a 52-week range of $50.84 to $64.87. The 12-month consensus price target on the stock was $66.85 before today’s report.