Electronics

Starbucks misses sales expectations as Americas locations disappoint

Starbucks misses sales expectations as Americas locations disappoint”

"Now when customers come into the store, they look at the [crowd of people waiting] and see that now we have congestion there".

"We struggle with this explanation", said Buckingham Research Group in a Friday note, emphasizing an "increased conviction in our earlier view that there was downside risk to guidance". McDonald's (mcd) earlier this week also reported softer US sales than analysts had anticipated-and the fast-food operator promised it would focus on improving traffic in 2017. Investors may have been displeased by the company's lowest same-store sales growth rate in eight years. Adjusting for that change, Starbucks said traffic was flat. The U.S. comparable store sales increase of 3% was comprised of a 5% increase in average ticket and a 2% decrease in transactions. And tune in next week for more Market Challenge! The company's 50 day moving average is $57.64 and its 200 day moving average is $55.85. And mobile order and pay represented 7% of transactions at that store, up sharply from 3% in the prior year. The company had revenue of $5.70 billion for the quarter, compared to analyst estimates of $5.85 billion. On top of congestion solutions, we believe Starbucks Reward Card loads (which increased 15% to $2.1 billion in the quarter, or nearly 10% of our expected revenue outlook for the year), personalized marketing, and other tech innovations like "My Starbucks Barista" voice-recognition technology will help Starbucks reach its full-year target-including mid-single-digit comps and 8%-10% revenue growth for the year, despite a likely uneven USA retail traffic landscape.

In the first quarter, transactions on Starbucks Cards accounted for 40% of company-operated transactions in the U.S. More interesting news about Starbucks Corporation (NASDAQ:SBUX) were released by: Nasdaq.com and their article: "Earnings Reaction History: Starbucks Corporation, 30.0% Follow-Through ..." published on January 26, 2017 as well as Seekingalpha.com's news article titled: "Starbucks: Struggle In 2017" with publication date: January 27, 2017. The company's last traded volume of 7.12 million shares as compared to it's an average volume of 8.85 million shares. These new employees will be focused exclusively on mobile orders during peak hours.

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The announcement comes a month after former Microsoft executive Kevin Johnson was named Starbucks CEO to replace co-founder Howard Schultz. His next effort? Building the company's new venture: very-high-end coffee shops.

In his research note to clients, the analyst told that "Adjusted EBIT margins were essentially flat".

"Without more quantification from management, it's hard to gauge exactly how the mobile preorder "congestion" materially impacted comps in the quarter", Credit Suisse said in a Friday note. They now have a $65.00 target price on the coffee company's stock.

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Still, Johnson and Schultz pointed to brick-and-mortar rivals and its success in online ordering as a problem most would love to have, as well why Starbucks is immune from other issues plaguing physical brands.

Starbucks expected revenue growth of more than 10% for fiscal year 2017.

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