by JOSEPH PISANI AP Retail Writer
FILE – This Tuesday, March 14, 2017, file photograph present the Starbucks emblem on a store in downtown Pittsburgh. Starbucks Corp. reviews earnings, Thursday, July 27, 2017. (AP Photo/Gene J. Puskar, File)
NEW YORK (AP) – Starbucks reported disappointing gross sales development at its espresso retailers around the globe Thursday, and introduced that it’s going to promote its Tazo tea model to Unilever for $384 million.
Shares of Starbucks Corp. tumbled practically 7 p.c in after-hours buying and selling Thursday.
Starbucks, which purchased Tazo about 18 years in the past for $eight.1 million, stated it can now concentrate on its Teavana line. Unilever, which owns Lipton, PG Tips and different tea manufacturers, known as the deal a “perfect strategic fit.” Both firms anticipate the deal to shut within the subsequent 12 months. Although Starbucks has been shutting down standalone Teavana shops, it nonetheless sells the model’s teas in Starbucks.
“Teavana is the brand we want to focus on exclusively,” stated Starbucks CEO Kevin Johnson.
The espresso chain additionally stated Thursday that fourth-quarter gross sales rose 2 p.c at its established areas worldwide. Analysts had anticipated an increase of three.three p.c, in keeping with FactSet.
Overall, the corporate reported internet earnings of $788.5 million, or 54 cents per share, within the three months ending Oct. 1. Adjusted earnings got here to 55 cents per share, matching what badysts anticipated.
In the identical interval a 12 months in the past, it reported internet earnings of $801 million, or 54 cents per share.
The Seattle-based firm stated income slipped barely to $5.7 billion, falling wanting the $5.eight billion badysts anticipated.
Shares of Starbucks Corp. fell $three.68 to $51.19 after the inventory market closed Thursday.