Starbucks Falls Short in its Holiday Quarter

Holiday drinks couldn’t help reel in a good holiday quarter for coffee giant Starbucks.

The company reported first quarter 2018 revenue and same store sales which both missed the mark when it came to what analysts had been expecting.

Growth in the country of China however was tremendous as same-store sales rose 6% there.

The stock fell 5% in after hours trading on Thursday after the company reported.

It was another quarter of disappointing sales growth that had traders concerned.

The company’s president and CEO Kevin Johnson remarked optimistically over China however and said, “China grew revenues 30 percent in Q1, with the strategic acquisition of East China positioning us to accelerate our growth in the key China market.”

The company reported adjusted EPS of 58 cents versus the 57 cents that analysts had expected. Revenue of $6.07 billion however trailed behind the $6.18 billion that analysts were waiting for.

Overall same-store sales were up 2% versus the 3% that was expected.

“Holiday [limited time offers] and merchandise did not resonate with out customers as planned,” said the company’s CEO on an earnings conference call Thursday. “To be more specific, in Q1, our food comp was 2 percent. Our core beverage comp, excluding holiday limited time offers was 1 percent. And together our holiday LTO and lobby items had a negative impact of over 1 point of comp.”

Disclaimer: We have no position in Starbucks Corporation (NASDAQ: SBUX) and have not been compensated for this article.