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Starbucks stock falls more than 7% as sales growth fails to meet expectations

DowjonesNews MarketWatch ·  Oct 29, 2021 14:07  · Movers

$Starbucks(SBUX.US)$ shares dip more than 7%.

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The specialty retailer's sales growth slowed in the fiscal fourth quarter and came in below the company's and Wall Street expectations.

$Starbucks(SBUX.US)$ said it earned $1.76 billion, or $1.49 a share, in the quarter, compared with $393 million, or 33 cents a share, in the year-ago period. Adjusted for one-time items, the company earned $1 a share.

Sales rose 31% to a record $8.1 billion, from $6.2 billion a year ago.

Analysts polled by FactSet expected Starbucks to report adjusted earnings of 99 cents a share on sales of $8.2 billion.

We anticipate that our strong business momentum, increased operating efficiency and continued global store expansion will fund these unprecedented investments while delivering yet another year of significant growth," 

- Chief Executive Kevin Johnson said in a statement.

Comparable-store sales globally rose 17%, which the company pinned on a 15% rise in comparable transactions and a 2% rise in average tickets. Same-store sales increases by 22% for North America.

That increase in global same-store sales, however, was below growth between 18% and 22% that the company guided in July, when it reported fiscal third-quarter earnings. FactSet consensus called for a rise of 18%.

For the full fiscal 2021, Starbucks said its global comparable-store sales increased 20%, mostly thanks to a 10% increase in average ticket and a 9% increase in comparable transactions. In July, the company said full fiscal 2021's same-store sales would grow between 20% and 21%.

Starbucks said Wednesday it was raising U.S. employees' wages to at least $15 and up to $23 per hour and making other changes to improve working conditions in its stores.

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