NEW YORK – Starbucks said its quarterly profit rose 25 percent as it benefited from lower coffee costs and stronger sales around the world.
The Seattle-based coffee company said global sales rose 5 percent at established locations. That was slower than the increase in the previous quarter, however, and total sales were shy of Wall Street expectations.
Troy Alstead, the company's chief financial officer, said in a phone interview that the slower growth for the final three months of the year was the result of the shift toward online shopping during the holiday shopping season, rather than heading out to stores.
"The impact to us is that there are fewer people out and about in the weeks leading up to Christmas," Alstead said.
But in a conference call with analysts, CEO Howard Schultz downplayed the impact that trend would have on sales growth going forward, saying that the advantage of Starbucks is that its offerings can't be replicated online and that its loyalty card business is growing.
Starbucks in the meantime has been employing a variety of strategies to drive up sales at its ubiquitous cafes, such as revamping its sandwiches and baked goods so people are more likely to get something to eat when they come in for a drink.
For the three months ended Dec. 29, Starbucks earned $540.7 million, or 71 cents per share. That was more than the 69 cents per share analysts expected.
Revenue rose to $4.24 billion, shy of the $4.3 billion Wall Street expected.
Shares of Starbucks edged down 21 cents to $73.39.