By Heather Haddon
Starbucks’s coffee sales are losing some steam.
The world’s largest coffee chain said over the quarter ended Dec. 31 that its global same-store sales grew by 5%, down from the previous quarter and below analysts’ expectations.
The Seattle company said it generated a record $9.4 billion in sales for its fiscal first quarter, up 8% from the prior-year period but missing analysts’ expectations of $9.6 billion. Earnings were 90 cents a share when accounting for one-time items. Analysts polled by FactSet expected 93 cents a share.
Investors’ concerns have grown over Starbucks’s business in recent months, particularly in the U.S. and China where the coffee giant faces increasing competition. Chief executive Laxman Narasimhan said at a December investor conference that the company’s business faced headwinds, including geopolitical conflict and slowing U.S. consumer spending.
Starbucks shares were down 14% over the last 12 months as of Monday’s close. The S&P 500 restaurant subindex gained 5% during the same period.
Narasimhan said Tuesday that the brand remains strong as it faces challenges.
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